The primary consideration that most people make when choosing their line of profession is the expected income derived from it. A person will research the potential income that he can receive from a particular job before he continues to join the profession. 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. What is the approximate income of a real estate agent? Unlike other professions where people have a single source of income which is 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. This article looks at three 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. Different places have varying rates of properties, and this directly affects the income of an agent because the real estate agent depends on commission on the sale or purchase of homes in that area. A property which is situated in a highly valued area will fetch a lot of money, and thus, the commission of the agent will be high. Likewise, a property that is located in an area that is not considered as prime does not fetch a lot of money and that means that the real estate agent does not get a substantial income from it.
Commission percentage – Even though real estate agent can have different sources of income, the commission from sales remains a significant source of their earnings, and it is not a constant figure. 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. Commission rates tend to vary depending on the agreement between the agent and the investor. The method of determining the commission might vary depending on the nature of the sales. For many transactions, real estate agents receive a commission of 6%, but it is negotiable depend on the unique circumstances of every transaction.
Properties sold – If a realtor sells several properties with a given period, he stands a chance of getting a high 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.