Even if you’re not a real estate agent or in the process of becoming one, you probably know that receiving payment can be a complicated process. In fact, many of the people taking courses do not even understand how it works initially. Buyers, 88 percent of whom work with a real estate agent, often don’t understand either.
Real Estate Wages
Some professional real estate workers bill hourly for their work, but the vast majority are paid at the end of a transaction. According to the Bureau of Labor Statistics, the mean wage for real estate sales agents is nearly $46,000 annually as of 2015. Of course, this figure differs each year and for each agent. The number of transactions an agent completes as well as the type of commission the sales agent receives will all come into play.
Real Estate Commission
The commission a real estate agent receives is negotiable and based on the project. Brokerages tend to offer a commission that is about six percent of the total price of the sale. Of course, when the salesperson works as part of a larger brokerage team, this percentage will decrease. The brokerage firm typically breaks up the payment into commission based on who helped with the sale of the home. This means that the take-home pay for the real estate agent is a bit less than this percentage.
When the broker receives a percentage of the final sale price, the sales agent can expect to receive between 30 and 40 percent if they are new to the firm. Advertising and marketing materials plus office expenses are taken out of the broker’s commission, generally.
So, what happens when the buyer and seller are using different agents? The split between the real estate agent used by the buyer and the one used by the seller is not always even. This negotiation is often uneven, with the listing agent receiving slightly less than the buyer’s agent. And of course, there is also the issue of splitting this commission between brokers and others who worked on the transaction.
Who Pays the Commission?
Generally, the commission is paid by the seller. The price of the commission is taken from the money owed to the seller for the home. Of course, this cost is also factored into the price the buyer is given.
Finances are just one of many fundamentals that real estate agents learn in the process of becoming a professional in the industry. Want to learn more? Contact us for more information about becoming a real estate agent.