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Fundamental Determinants of the Income of Real Estate Agents

The primary consideration that most people make when choosing their line of profession is the expected income derived from it. There might be other factors that people look into, but income remains one of the most significant factors. Real estate is a lucrative business which employees several real estate agents. 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. So, what determines the income of a real estate agent? 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.

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. As you know, some locations are prime, and thus, they have high value and other places are not prime, and they will not attract a lot of interest and money. 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.

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. In determining the commission of a real estate agent, several factors are brought into consideration, and they might include the knowledge of the agent in the industry, the urgency of the transaction, amount of money realizable and reputation of the realtor. 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, a real estate agent must have a target of homes to sell in a particular period so that he can earn a modest income. It purely depends on hard work and skills to do the job if you want to make several sales.

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