Most people think Real Estate is an easy, cushy job where we get to put signs out, talk on the phone and collect a fat check. If that's what this job offers, then point it out!
I thought I would break it down for the sake of a post to see, REALLY what do Realtors get paid.
According to NAR (National Association of Realtors) the average Realtor sells 6 homes a year. So in Atlanta, with an average price of $200K, at 3% average commission, that would be $36,000. Most teachers bring home more than that and they only work 9 months out of the year, I don't see anyone shouting about how they need to reduce their fees. I digress....
So let's assume, you are a career Realtor and you want to make a career out of it. They say on average, successful realtors (the ones that make over $100K a year), work an average of 60-80 hours a week.
So at $100K a year, you'd think you'd be making a nice $50/hr, but at 60 hours a week you're down to $32/hr. At 80 hours (aside from losing your family) you're down to $25/hr. That's not too shabby if you don't have a family.
Working like this will cause burnout and defection. So how do successful agents do it? They hire a team. Straight out of the Millionaire Real Estate Agent, comes the plan. Your first hire should be an assistant. With her salary being in the neighborhood of $30-40K, she (or he) will be taking the paperwork portion of the job off your hands.
It's only through leverage that you'll get an ultimately higher wage. As one agent put it, "if you don't have an assistant, YOU ARE the assistant."
That's another post entirely, but back to wages. The average client gets the Realtor $6,000 but it doesn't just go to their pocket. 30% goes to the Broker in most cases ($1,800), another 25% or so goes to taxes, then there are expenses which can be up to %50 in some cases.... If you did the math, you'll get a negative number. It's sad but true in some cases.
So where do these, "I made $400/hr" ads come from. This is from Leverage pure and simple. The other 80% is just grinding away (if they are full time) or just doing this for a hobby.
Sorry to ramble on like that - I just kind of went with it. Feel free to ask questions.
2 comments:
Hi there - I am almost done with my pre-licensure class in NJ and have been perusing the web for realtor-type information. I came across your site, which I've found to be informative. I read your post regarding salaries of realtors and that the great realtors have an assistant. Well, I'm a little perplexed by that statement. In NJ, a desk-clerk worker in a realty office is not allowed to answer any questions about a property or a listing (is this the case where you live?) Only licensed realtors are allowed to answer those questions. A clerk, or secretary, can only "forward the call or take a message." What, then, is an assistant? Is she/he a realtor who just didn't want to do any selling?
Thanks for your information, I find your site very interesting!
In some states, a licensed assistant (has real estate license but may not practice) is needed, in others a regular admin is ok.
Think of some of the tasks that you would do in a transaction and think about how your presence effects the overall outcome. Most of time, your presence does nothing for the outcome.
Updating MLS listings, calling agents for feedback on the showings, e-mailing information to clients, handling basic client questions, closing coordination between attorney/title and client, coordinating inspection period, making sure everyone gets their copy of what they need, having the final signatures or initials on random documents, following up with the loan officer and client on a weekly basis to make sure they are "on point".... the list could go on and on.
In some states, you could have a "showing assistant," a person who shows the homes but then the client comes to you to discuss.
Thanks for you comment. If you plan on joining a company, I'd be happy to talk with you about them.
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