When you are representing the buyer, and you are getting your standard 3% commission from the seller, what is the breakdown of that 3% in regards to how much you actually keep?
Every agent who isn't a broker has to pay a broker a percentage. That usually ranges from 50%-85% and can be static or fluid depending on deal volume. What's left is the take home before taxes.Ed Carter said:
When you are representing the buyer, and you are getting your standard 3% commission from the seller, what is the breakdown of that 3% in regards to how much you actually keep?
mazag08 said:Every agent who isn't a broker has to pay a broker a percentage. That usually ranges from 50%-85% and can be static or fluid depending on deal volume. What's left is the take home before taxes.Ed Carter said:
When you are representing the buyer, and you are getting your standard 3% commission from the seller, what is the breakdown of that 3% in regards to how much you actually keep?
Then you likely have to assume 20%-30% of that for income taxes (depending on agent and total income level) since agents are 1099 self employed.
Subtract out any marketing or client associated fees or expenses (even though some are tax deductible) associated with that deal.
Then subtract out whatever portion of dues, continuing education, MLS, desk fees, and other Realtor related industry expenses you might have (this will be fluid as you do more deals), which can also sometimes be tax deductible.
I'd day the average agent is netting around 35-45% of that 3%. And once again, that number will be a lot lower for agents with only a couple sales a year and higher for agents who do a high deal volume.
My first year with RE/MAX in 2013, I netted 45% of an average commission rate of 2.92% on 13 deals. Last year I only had one sale (only do it part time now), so I netted barely 25% of the 3% due to the fees and costs of being a Realtor. It really isn't worth it if you can't secure multiple deals a year.
It definitely can be for agent securing lower amounts of deals and working at a big box name brand company.DallasAggie0 said:mazag08 said:Every agent who isn't a broker has to pay a broker a percentage. That usually ranges from 50%-85% and can be static or fluid depending on deal volume. What's left is the take home before taxes.Ed Carter said:
When you are representing the buyer, and you are getting your standard 3% commission from the seller, what is the breakdown of that 3% in regards to how much you actually keep?
Then you likely have to assume 20%-30% of that for income taxes (depending on agent and total income level) since agents are 1099 self employed.
Subtract out any marketing or client associated fees or expenses (even though some are tax deductible) associated with that deal.
Then subtract out whatever portion of dues, continuing education, MLS, desk fees, and other Realtor related industry expenses you might have (this will be fluid as you do more deals), which can also sometimes be tax deductible.
I'd day the average agent is netting around 35-45% of that 3%. And once again, that number will be a lot lower for agents with only a couple sales a year and higher for agents who do a high deal volume.
My first year with RE/MAX in 2013, I netted 45% of an average commission rate of 2.92% on 13 deals. Last year I only had one sale (only do it part time now), so I netted barely 25% of the 3% due to the fees and costs of being a Realtor. It really isn't worth it if you can't secure multiple deals a year.
So 1099 and from what I know most agencies don't even provide benefits either. That's sounds like a really lousy deal.
Martin Q. Blank said:
1% goes to their savings account. 1% goes to advertising their brand. 1% goes to hookers and blow.