The potential income likely to be earned in a particular profession is a primary consideration whenever one is choosing a career path. There might be other factors that people look into, but income remains one of the most significant factors. For a long time, real estate industry has been thriving. In the recent times, some people have been disgruntled by the income of real estate agents because it reduced significantly but that is due to the economic recession that adversely affected the industry. As the economy is gradually picking up, is there a fixed income derived from real estate agency? Real estate agents do not have a fixed salary like most of the other professions, and therefore, no definite amount of money can be associated with real estate agent income because it depends on several factors. Below is a highlight of some of the crucial factors that determine the income of a real estate agent.
Location of the property – The area where a real estate agent works play a significant role in determining what the agent earns. Different places have varying rates of properties, and this directly affects the income of an agent because the real estate agent depends on commission on the sale or purchase of homes in that area. For that matter, if the realtor is based in a place where house prices are high, then he is likely to get a considerable amount of commission on any transaction that he facilitates. On the other hand, in the location where property demand is low, the property prices are also low, and thus, the real estate agent will get little money on commission.
Percentage of commission – Real estate agent receive commissions on every transaction that they facilitate but they are in the form of percentages, and thus, they commissions are not fixed. Property investors that might want to sell or buy properties with the help of real estate agents agree to pay them on commission rates. You will seldom find agreements where an agent commission is stated as a base figure. Commission rates tend to vary depending on the agreement between the agent and the investor. The factors that are likely to influence the commission rate of a real estate agent are experience, nature of the transaction and the image of the agent in the industry. For many transactions, real estate agents receive a commission of 6%, but it is negotiable depend on the unique circumstances of every transaction.
Properties sold – If a realtor sells several properties with a given period, he stands a chance of getting a high income. Therefore, the higher the number of properties sold, the higher the income of a real estate agent. Professional real estate agents are likely to get high income because they have the skills to make lots of sales.