Real Estate
Sponsored by

Question for agents

1,722 Views | 9 Replies | Last: 5 yr ago by E
Ed Carter
How long do you want to ignore this user?
AG
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?
Martin Q. Blank
How long do you want to ignore this user?
1% goes to their savings account. 1% goes to advertising their brand. 1% goes to hookers and blow.
Ed Carter
How long do you want to ignore this user?
AG
While I respect and appreciate a good hookers and blow comment, could anyone provide a serious answer as to what the agent gets to usually keep in the scenario? Ie. how much goes to the broker etc
malenurse
How long do you want to ignore this user?
AG
Full disclosure - I am not a realtor but am married to one.

There is no standard breakdown. Different brokerage houses charge different amounts. You may also be part of a team where money is pooled to pay for office space and assistants.

You may also pay your brokerage for office supplies etc. Some brokerages pay profit sharing every quarter.

My wife gets about 70-75% of her commission. edit (most of which goes to my coke habit)
The last thing I want to do is hurt you. But, it's still on the list.
Ed Carter
How long do you want to ignore this user?
AG
Thanks, and just to be clear you are talking specifically about when she is representing the buyer correct?
malenurse
How long do you want to ignore this user?
AG
Correct
The last thing I want to do is hurt you. But, it's still on the list.
mazag08
How long do you want to ignore this user?
AG
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?
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.

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.

Red Pear Realty
How long do you want to ignore this user?
Sponsor
AG
I keep 1% and refund 2% to my buyers at closing if the seller pays 3%. Buyers can use that 2% for closing costs, points on their loan, or a deduction to the gross purchase price of the home. We operate in all major Texas MSAs.
Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
DallasAggie0
How long do you want to ignore this user?
mazag08 said:

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?
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.

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.
mazag08
How long do you want to ignore this user?
AG
DallasAggie0 said:

mazag08 said:

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?
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.

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.
It definitely can be for agent securing lower amounts of deals and working at a big box name brand company.

But at a certain higher number of deals, a lot of those costs become fixed, and other than moving up into a new tax bracket and incurring additional client related expenses, the profit is greater.
E
How long do you want to ignore this user?
AG
Martin Q. Blank said:

1% goes to their savings account. 1% goes to advertising their brand. 1% goes to hookers and blow.


I do RE part time for friends and family. It's more like 2% hookers and blow, 1% new golf clubs. Not setting aside for taxes, screw the IRS.
Refresh
Page 1 of 1
 
×
subscribe Verify your student status
See Subscription Benefits
Trial only available to users who have never subscribed or participated in a previous trial.