Income for Real Estate Agents

October 1, 2009 | Posted by admin

     Real Estate Agents Dealing in Residential Properties: The price of real estate is affected by both local and economic factors. When the market for real estate is booming, a real estate agent can make oodles of money. A seller’s agent makes money through commissions which are determined as a percentage of the sales price. So when the prices of real estate appreciate, the seller’s agent stands to gain in the form of huge commissions. Since the current market is not a sellers market, it would behoove us to take a look at the payment structure for a buyer’s agent.

     A buyer’s agent is entrusted with the task of scouting for suitable properties, either residential or commercial, and getting a good deal for the buyer. A good deal for the buyer, would mean a low purchase price. The current market is a buyers market, since property prices are at an all time low. A buyer’s agent is generally paid a percentage of the purchase price or listed price as commission. Sometimes in addition to receiving a percentage of the purchase price, he is also entitled to a percentage of the difference between the listed price and the purchase price. In addition to this, he is paid an hourly fee and promotional expenses. It’s evident that a seller’s agent earns much more than a buyer’s agent, since the latter will stand to lose in the event of the buyer getting a good deal.

     Commercial Real Estate Agents: Commercial real estate agents earn commission on the sales and purchase of land and commercial real estate. The commissions, for both residential and commercial real estate, are negotiated in a similar manner. In case of rental apartments, the agent is paid a rental commission by the real estate company responsible for renting out homes and apartments.

     Broker Price Opinion (BPO): Real estate agents can also earn money by offering their opinion on the worth of the property to lending institutions. A fixed fee is paid for Broker Price Opinion.

     Other Ways of Earning: Some states allow real estate agents to appraise properties. In this case, the agent earns an appraisal fee. Experienced real estate agents can also earn money by conducting seminars and training sessions.

     When times are good, average real estate agent salaries can be as high as $65,270. In fact, a really good agent can earn more than $100,000 a year. On an average, in 2006, an agent could earn around $6,500 on selling a house worth $500,000. This brings us to the question of how much does a real estate agent make today.

     How Much Does a Real Estate Agent Make Today

      The answer to this question would depend entirely on whether the agent deals in commercial or residential properties. In case of residential properties, an oversupply has resulted in pulling down the price of homes. Many people are preferring renting to owning, since they are unable to afford the mortgage payments. In this situation, commercial real estate agents can earn commissions by bringing together landlords and tenants. It is a good time for business owners to invest in commercial properties since they can acquire property at a really cheap price. However, buying a commercial property is much more complicated than investing in a residential real estate property. This is because, unlike residential real estate deals, commercial real estate deals do not require mandatory disclosures. Hence, a commercial real estate agent’s services are indispensable. Thus, a commercial real estate agent can hope to earn much more than a real estate agent specializing in residential properties. However, the deals are generally complicated and time consuming and involve huge sums of money. Consequently, a commercial real estate agent is paid more, but at less frequent intervals.

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