Today, when people are choosing professions, earning is one of the motivating factors. There might be other factors that people look into, but income remains one of the most significant factors. Being a real estate agent is a desire for many people because they perceive real estate industry to be lucrative. In the recent times, some people have been disgruntled by the income of real estate agents because it reduced significantly but that is due to the economic recession that adversely affected the industry. So, what determines the income of a real estate agent? Unlike other professions where people have a single source of income which is real estate agent salary at the end of the month, real estate agents have several income sources such as property management fees, commission on sales and purchases and completing broker price options. Below is a highlight of some of the crucial factors that determine the income of a real estate agent.
Location of the property – The area where a real estate agent works play a significant role in determining what the agent earns. If the rates of properties vary with locations, it means that the incomes of real estate agents are also affected because they receive commissions on the sale of the properties. Since a real estate agent depends on commission, he is likely to reap big if he sells a property in a prime location. On the other hand, in the location where property demand is low, the property prices are also low, and thus, the real estate agent will get little money on commission. How much money do real estate agents make?
Percentage of commission – Real estate agent receive commissions on every transaction that they facilitate but they are in the form of percentages, and thus, they commissions are not fixed. Property investors that might want to sell or buy properties with the help of real estate agents agree to pay them on commission rates. You will seldom find agreements where an agent commission is stated as a base figure. As the property investor agrees with a real estate agent, they must clear elaborate the method of payment. Usually, lots of things determine the commission rate of a real estate agent and they might include the experience of the agent, the urgency of the transaction and the reputation of the real estate agent. For many transactions, real estate agents receive a commission of 6%, but it is negotiable depend on the unique circumstances of every transaction.
Sales rates – For real estate agents, the more you sell, the higher your income. Therefore, a real estate agent must have a target of homes to sell in a particular period so that he can earn a modest income. Professional real estate agents are likely to get high income because they have the skills to make lots of sales. You can get additional details by checking out this link; https://en.wikipedia.org/wiki/Real_estate.