How do real estate agents get paid?
Real estate agents or brokers are generally paid through the sales commission paid by the seller when a transaction closes. Agents have expenses and financial obligations just like you, so it will be to your mutual benefit if you choose a real estate agent and stick with that person. The agent will respect your loyalty and respond with a sincere commitment to you.
Provided by Jay Burnham Home sales have been hot around the country during the past few years. So many people believe that real estate agents are getting rich. But, statistics tell a different tale. According to the National Association of Realtors, a typical Realtor earned $10,000 in 1948. In 1996, the median gross income for a Realtor was $33,500. Granted, these are national statistics, and nationally, there’s a wide variation in home values. An agent working in rural Tennessee, where sale prices are relatively low would have to sell a lot of homes to keep pace with a successful real estate agent working in the costly Silicon Valley. There’s usually a direct correlation between price range and an agent’s income: the higher the price, the higher the income. Guaranteed salaries are rare in the residential resale business. Most real estate agents work for a commission, most often a percentage of the sale price of the home being sold. Agents usually don’t receive any up-front compensatio
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I’m an agent in Florida and I get paid by my brokerage firm. When I rent or sell a property the money goes first to my firm. They take out a percentage and then they cut a check for the remainder to me. Some firms pay within a day and others within a week or so. It’s always by check and I am responsible for the taxes on what I get paid. I get a 1099 at the end of the year.
There is a common myth that all real estate associates are rich! Some are rich, but it may not necessarily because of their real estate career! All real estate associates are self-employed and receive no salary. Yes, that’s right. They get no weekly pay check and have no expense accounts. They don’t get paid until after a successful closing. So be nice to your Associate. Be loyal to them so they can get paid for their work for you. Every real estate commission gets divided between the listing and selling companies and their associates. Because all of these people are self-employed, all the expenses of running the company and the agent’s personal business are paid by these commissions. Some of these expenses are: Company Expenses • Rent • Utilities • Phone Systems • Phone Service • Office Furnishings • Office Supplies • Internet Access • Web Sites • Printing • Yard Signs • Marketing Materials • Insurance • Computers and Printers • Digital Cameras • Copiers • Fax Machine • MLS Fees • Cha