Case Study: My Experience With Homes
Today, when people are choosing professions, earning is one of the motivating factors. There might be other factors that people look into, but income remains one of the most significant factors. 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? This particular question does not have a precision answer because the income of a real estate agent is flexible and depends on a couple of factors. Below is a highlight of some of the crucial factors that determine the income of a real estate agent.
Property location – The place where the property that the real estate agent intends to sell has an influence on the income he is likely to get from it. If the rates of properties vary with locations, it means that the incomes of real estate agents are also affected because they receive commissions on the sale of the properties. 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. However, he will not fetch a lot of money suppose the property he sells in a place where buyers do not have interest, and they are not willing to pay a lot of money to purchase the property.
Commission percentage – Even though real estate agent can have different sources of income, the commission from sales remains a significant source of their earnings, and it is not a constant figure. 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 method of determining the commission might vary depending on the nature of the sales. In most cases, agents get a commission rate of 6% on the deals that go through them.
Sales rates – For real estate agents, the more you sell, the higher your income. Therefore, a real estate agent must have a target of homes to sell in a particular period so that he can earn a modest income. Therefore, real estate agents must work hard to achieve their sales targets.