Posted 17 September 2021 - 06:55 AM
The average real-estate agent in this region earns just over $50,000 gross, from which they have to deduct monthly expenses to remain licensed and in good standing with their brokerage, and of course, income tax (or if they’re in a PREC, corporate tax, then income tax).
There are approximately 1,500 agents in this region, and 80% of deals go to 20% of those agents.
On a million dollar deal the commission is roughly $25,000-$30,000 depending on the agent, and rates are negotiable. From that sale, half or more goes to the agent who brings the buyer, and they pay fees to their brokerage on the deal. The listing agent also has other fees related to listing and the promotion.
Meanwhile, of the 900-odd sales per month now, about 350 are houses averaged at $1.1-$1.2 million, 350 are condos averaged at $550k, 100 are townhomes averaged at about $700k, and the rest are trailers (ultra low priced) land ($200-$1M typically), and commercial properties (wide gamut of pricing but a different industry altogether).
On a $550k condo, you can see the split between the agents is closer to $7,000, from which they pay their fees. If you can sell or buy ten homes a year you’re doing exceptionally well (relatively speaking), but most agents are selling just a handful, to where their gross wage is on par with a mid level government employee, but they still have to deduct fees. If they clear $40,000 post fee, but pre-tax, it’s an average year for an agent. Now imagine how much driving they’ve had to do, how many weekends they dedicated to showings with their clients, how many deals collapsed, and how much it cost them just to earn that commission.
Most agents filter through the system and walk away wondering what happened. It’s a difficult business, even in good times, and savvy buyers or sellers can smell a newbie from a mile away, so most newcomers rely on family and friends for their first few years in the industry (and most will only last that long).
Matt R. and m3m like this
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