Realtors® love their work because they enjoy helping people find their dream homes. However, most of us don’t understand what Realtors® do and how they get paid. Lately, there’s been a lot of talk in the news about real estate agent commissions. Let’s clear up some of the misconceptions about Realtor® earnings.
The Basics of Realtor® Earnings
The Reality of a Full-Time Realtor’s Earnings
Micheal Kruszynski, a Realtor® from Florida, wrote that an average full-time Realtor® earned $31,900 last year, working 40+ weekly hours. Realtors® don’t earn an hourly wage or salary. They only get paid when they sell a home, and the sale closes. Payment comes from broker to broker. That means agents can work with clients for weeks, months, or even years without a guarantee of making a sale. It’s like going to work every day without knowing if you’ll receive a paycheck.
The Daily Grind
Technically, Realtors® wake up unemployed every day, continuously going on job interviews and facing rejection. They spend time away from their families, using their time, gas, and money for babysitters, often missing dinners and weekends.
Agents are essentially on call 24/7, always needing to be ready for any opportunity. When they close a deal, the agents divide the commission. Half goes to the other agent involved in the sale. The agent must also use a significant portion of their half to cover various expenses.
The Hidden Costs
Realtors® face a multitude of upfront expenses that need to be covered before they see any income. The following are some of the costs real estate agents cover:
- Broker splits and fees
- Office rent and utilities
- MLS fees
- NAR fees
- Local association fees
- E&O business insurance
- Extended auto insurance
- Self-employment tax
- State licensing fees
- Advertising fees
- Showing service fees
- Website fees
- Assistant’s salaries
- Showing partners
- Transaction coordinators
- Yard signs
- Photographers and videographers
- Office supplies
- Business cards
- Property flyers
- Electronic lockboxes
- Continued real estate education
- Legal fees
- Gas
- Income taxes (25-30% set aside)
- Health insurance (if not provided by a spouse)
More Than Just Selling Homes
As listing agents, Realtors® handle a variety of tasks beyond simply selling a home. Their work is intricate and rigorous, demanding diverse skills and a substantial commitment of both time and finances.
The Bottom Line
Realtors® dedicate their lives to helping people find homes, facing many challenges and expenses along the way. Understanding their role and the financial realities they face helps us appreciate their hard work. Without them, buying and selling a home would be much more difficult.
For more information or help with real estate services, contact Emily Hawkins at 206-669-6902. Follow us on Facebook for more updates!
