hi, I recently completed my agent rep course and has been offered by an agent for $30k + commission. That $30k is a retainer, means if I sold a property and has commission, has to pay back until I offset that amount, only able to pocket extra income after pay off retainer.
Any one know how much an average agent rep make a year, $80k? I just want to make sure I am not making less than what I am making now, am willing to work 7 days a week and expect long hour and a lot of hardwork. I have to confirm acceptance of offer or not by tuesday, will appreciate if someone able to share some opinion.
this was exactly what i was thinking about this morning! ive decided to go back into the workforce in a year and a half after being a stay at home mum for 4 years. i am waaay out of my old field so was writing a list of careers i want to research. REA was one of them … although im turned off by how much everyone seems to hate REAs haha. was curious about income though.
As a (licensed) agent you should be making 50% of the agent's commission ie if they are getting say 5%+ gst on the sale, you should be getting your 2.5% of the sale. In saying that, that applies to a co-agency/conjunctional agreement, although I have seen less. Speak to the body representing agents in your state REI?
If you only have $80k aspirations, don't even bother. (They don't drive flash cars for nothing). It may take you a little time to crack that barrier but you will get there quite quickly depending upon the pricepoint of the properties that you deal with – it will either be quantity (of cheaper places with higher % commission) or less higher priced properties (with low commission).
The thing to be wary of initially is working for commisson only – you don't get paid anything until after settlement ie 42 days + after sale contract is signed. Alternative is not much better, getting $X per week + commission. This method you run a ledger with costs being your wages, phone, car, advertising etc which is then offset against your commissions earned. Although you will be earning an income, it will need to be paid back to the Agency when you make sales.
You will also need to know what your share of the commission is ie do you get 50% for a sale or is it 30% for the listing and 20% for the sale and 50% to the agency? That is, what cut do you get for listing a property and what do you get for selling it? This creates competition within an agency as some licensees like to list all properties hence cutting you out of a % or between the listing agent and the selling agent.
hi Scott, thanks for your info. I am not a licensed agent, I only have agent rept cert. And the agency told me I only get 15% for selling property, did not mentioned about listing thou. Which means if I can't get any listing, I will have to sell at least 5-6 property with average $400k per month. is that something hard to achieve? ei
ATM sub $500k is FHB territory, shouldn't be too hard to achieve however stock is extremely tight (well at least our way). Spring usually sees a rise in the number of listings so supply should pick up then. It would be worth asking how many properties that they would be expecting you to sell ie what are your KPI's. How effective is this agency in converting queries into listings? What is their conversion rate for sales? Days on market etc?
That's very helpful, thanks Scott..
Interesting,
Hi Scott the agents fee works out to be about 2.75% including GST and today there is a fight to get listings so most agents are dropping down to 2% to get the business – not 5% as you state.
Marketing companies some licensed and some not charge $30 – $50,000.00 selling property which is coming under investigation by TDFT.
The normal split is 60/40% depending on how good you are as an agent and a sales person.
A good agent has HIGH selling and negotiating skills and it's a 7 day a week job … you have to smell deals, walks the streets, lots of due diligence …
Go and talk to 20 agents who are various stages in the business to see if it's what you really want, it's bl..dy hard work and lots of sales fall over.
D … Oh for all the information you need ring TDFT in yr state.
Calvinci and Karen,
The rule of thumb is the old 80/20 rule. 20% of the agents ,make 80% of the money. It's not easy, you quite possibly wont see any income for the first three months, and then when you do you have to pay back the retainer. Realistically most agents would struggle to make the 30k a year (not that they would admit it, business is always great.lol) and that is why a lot don't last more than a year. You need to be prepared to give up weekends and also evenings during the week.
Getting listings is what you should be aiming for, because what people don't realise, getting an exclusive agency is as important as making a sale in an estate office, and if you don't produce listings then it will be "so long, thanks for your time" in very short order. You could do alright just being a "listing agent"and rely on other agents selling your listings. Do not think for one minute, as do the majority of people who knock agents, that stitching a deal together is easy – it ain't. There are at least two personalities involved and 99% of the time each one thinks their considerations are right and the other – be it vendor or buyer – is being unreasonable. Deals can fallover because of a thousand dollars difference.
If you want to achieve 80k that's great, but unless you are ready to put in 100% effort, forget about it. A lot more can and is made by agents, you just have to work your way into that 20%.
Karen, most people don't really hate agents, it's just one of those things that people like to do. Jump on the agent bashing bandwagon. Possibly back in the day, there were a few more dubious acts happening , but not for a long time now. There are of course exceptions, but in this day and age, no more than any trade. Honestly how many people have had a really bad incident with an agent, and i don't mean someone who is put out because they thought they could act how they liked and ended up losing a deal or something a friend has told them, , because it is generally hearsay and exaggerations. I know, because when ever I go somewhere and meet new people , you tell them your an agent and some will want to talk your ear off about real estate and get your opinions. I have never had anyone tell me i am a horrible person because of my job.
Don't work for an overstaffed agency and don't get pushed around by the old hands. Make sure you have a clearly defined area and don't let other agents do the old chestnuts "oh this one is an old referral or it's a friend of mines cousins auntie, who has asked for me especially" trick.
Have fun.
I'd buy from you Karenday.
But I don't know how may bargains would slip through your fingers.
hmm… in fact I have had a chat with few agent from different company, looks like most of them is selling 4-5 property a week.. probably making about A$50k a year then.. Is that the amount average agent is making?
mate if they are selling four to five a week they would be making a lot more than fifty Kay. I doubt whether there are too many agents selling that many at anytime of the market.. I think some exaggerating is at hand here. Of course i only know my market, maybe interstate it could be different , but four to five a week, every week, I would doubt it. Project marketing on a hot development possibly, but you don't walk into a P.M. job with no experience.
Average amount, I don't know i haven't worked for anyone for a long time now to know what it would be, and because of how i operate, i really don't have much to do with other agents. However, if you are good a lot of money can be made and if you are not, then you won't make any, pretty easy really.
The one thing I love about it is that the lifestyle it can offer is great. I take my kids to school, pick them up from school, can go do what ever i want with them as long as i have planned my day around it, play golf, ride my bikes, I make the dinners, which I enjoy and makes for a very happy wife who works at her own career. It took ten years to get to that stage and I am no longer in general real estate but I had to start somewhere, There have been plenty of lean times but now it works well for me. Don't be too worried about the money, be more concerned about are you capable of putting in the effort, the money will follow.
sorry typo… not a week, it's 4-5 a month.
Hi Calvinci,
I recently left a real estate position in Western Australia so my numbers may not be applicable to you. But I was in for two years and started on a five hundred dollar a week retainer that was paid back through my commissions. My split went like this eg
Property 400k
Commission 3.5% 14,000
GST 10%= 12727.72727
Of that if i listed and sold the house myself i would get fifty percent (6363.636)
I i only did one side just listed or just sold i would get 25% (3181)And if it was a conjunction with another agents property i would go half with my agency. Over here good reps do about four a month, and i know several companies that have different commission structures each with there own pitfalls. If you sell one property (both sides) a month you could expect around 45k a year, which is pretty easy once you get the hang of it.
In my opinion i wouldn’t worry about the commission at the start and focus on hooking up with a good agency with a good licensee that can teach you. I went to a smaller botique firm who had a good licensee but no training. Looking back i would have joined a larger company with better training and a little more competition in the office. I am single with no kids so i really didnt have to worry about money too much, but you will probably be different.
Hope it helps
hi, thanks for your info, this is very helpful. Unfortunately I have turn down the offer because here most agent only charge 2-2.5%, so 400k only get about A$8k commission. And if you are selling, you get 15% of that, about $1200. But listing get more commission, around 30% as it's hard to get a listing. I was told I have to knock all door in this suburb to get listing, this really set me off…
Lockymac wrote:Hi Calvinci, I recently left a real estate position in Western Australia so my numbers may not be applicable to you. But I was in for two years and started on a five hundred dollar a week retainer that was paid back through my commissions. My split went like this eg Property 400k Commission 3.5% 14,000 GST 10%= 12727.72727 Of that if i listed and sold the house myself i would get fifty percent (6363.636) I i only did one side just listed or just sold i would get 25% (3181) And if it was a conjunction with another agents property i would go half with my agency. Over here good reps do about four a month, and i know several companies that have different commission structures each with there own pitfalls. If you sell one property (both sides) a month you could expect around 45k a year, which is pretty easy once you get the hang of it. In my opinion i wouldn't worry about the commission at the start and focus on hooking up with a good agency with a good licensee that can teach you. I went to a smaller botique firm who had a good licensee but no training. Looking back i would have joined a larger company with better training and a little more competition in the office. I am single with no kids so i really didnt have to worry about money too much, but you will probably be different. Hope it helpsCal, comms of 2.2% are very common esp in Sydney, more expensive properties pay even less %. I personally would be looking for an agency which had a better commission split when you have gained the experience. As you are just entering the field, look towards the training that an organisation can give you as you still have a lot to learn – prospecting (ie finding people who are interested in listing), marketing (how to raise the profile of your agency), negotiation skills (both for closing deals but firstly getting the listing), market research (analysis of sales data to assist in listing), creating proposals (to get the listing) etc. There are many skills to be learned before you even speak to the first buyer. Don't necessarily set your aspirations in the clouds until you have a good understanding of the skill-set required to make a good selling agent. Many agents start off in property management however if you don't go down that path then follow the other.
Sounds like you should move to western australia:)
Quick summary- I would not only be focussing on the commission- you must also look at an agencies training, support facilities, access to the principal for help when you need it, what are the other sales agents like, reputation of the agency in the community, use of technology.
I started as an agent when I was 20- worked in residential, project marketing, commercial, industrial, then I left a 150k approx commission per annum in Sydney to work for a construction company for 45k per annum, so I could learn about development, building and have had my own business for nearly 10 years now.
So often many people use residential as a stepping stone to gather experience, learn about deals, meet good contacts, and if you are a dedicated agent, truthful, honest, return calls, and follow up follow up follow up- Number 1 rule to do- you will succeed.
You must also learn to walk away from sellers that are unreasonsable, priced incorrectly, wont listen to your research/ advice and concentrate on saleable stock- stock you can sell now and build up your $$$ commission kitty. Do not waste time with people or listings that are unsaleable within 30 days or opne listings with every tom, dick and harry.Good luck- I have found real estate an amazing, fun, interesting journey and when I started I was a manager with Mc'D at 20, and decided I did not want to be standing up 12- 15 hrs per day and putting up with people throwing gherkins, shakes, being unreasonable and got sick of smelling Mcs food 12 hrs a day- my goal was to maek money, have fun, learn daily, meet people daily, and build things. I think you have to get your goals and reasosn very clear and use this as a stepping stone and learning curve. The principal is also taking risk on you by taking you on- as you may waste 3- 4 months of their time in training, costs, desk space, overheads- so it is a 2 way street really. Kylie
Business Global you make a good point about using residential selling as a stepping stone not only for the real estate experience but also getting used to working on commission which is an art in itself, i have also looked to move into the development industry recently and was wondering how you have gone with building things a share your love of learning.
I agree with a few of the comments above – namely that 20% of agents make 80% of the money!
My advice would be to work for the biggest, flashest agency for your first 12 – 24 months, you will have a level of training that will be unsurpassed.
My initial training was with a company called Foxtons in London – the pay was fairly rubbish as an agent, but the experience was extraordinary. After 2 years, I came back to Australia and set up my own real estate agency in Canberra – my gross commission currently exceeds $30,000 per month, with a property management division sitting at over $520,000 a year turnover.
This is one of those industries that require an infinite amount of patience, social interaction skills, time management and, above all, an affinity with people. If you have exceptional people skills, then you stand a chance at making it big.
It's also about the local market (will your agency give you a small patch, and expect you to compete with agents who have been working that patch for years?).
It takes initiative, and "out of the box" thinking to make a sudden impact in an area and secure listings – but it can definitely be done.
I'm more than happy to answer any specific questions.
Erik Tyler – Managing Director, LIVEin Real Estate, http://www.livein.net.au
That is another point, look a data from your local Real Estate Board and see how many properties have been sold in your “farm” area some of the areas available when i started were only selling one to two properties per month with several active agents in the area.
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