The potential income likely to be earned in a particular profession is a primary consideration whenever one is choosing a career path. A person will research the potential income that he can receive from a particular job before he continues to join the profession. Being a real estate agent is a desire for many people because they perceive real estate industry to be lucrative. It is not until recently that the income from real estate business started dwindling due to poor economic conditions which have unfavorable effects on almost all professions. 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. This article looks at three 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. A property which is situated in a highly valued area will fetch a lot of money, and thus, the commission of the agent will be high. 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.
Commission rates – Real estate agents to do not have fixed salaries that they receive at the end of a particular period but they depend on the commissions that they receive from transactions. 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. 6% is usually the commission rate in most transactions, but it can vary depending on the circumstance prevailing.
Properties sold – If a realtor sells several properties with a given period, he stands a chance of getting a high income. On the other hand, the income will be low if he does not perform exemplary in his job. Professional real estate agents are likely to get high income because they have the skills to make lots of sales.