How Much Money do Real Estate Agents Make

Monetary Earning

Agents Dealing in Residential Properties

The price of real estate is affected by both local and economic factors. When the market is booming,an agent can make oodles of money. A seller's agent makes money through commissions, which aredetermined as a percentage of the sales price. So when the prices appreciate, the seller's agentstands to gain in the form of huge commissions. Since the current market is not a sellers market, itwould behoove us to take a look at the payment structure for a buyer's agent.

A buyer's agent is entrusted with the task of scouting for suitable properties, either residential orcommercial, and getting a good deal for the buyer. A good deal would mean a low purchase price.The current market is a buyers market, since property prices are at an all time low. A buyer's agentis generally paid a percentage of the purchase price or listed price as commission. Sometimes inaddition to receiving a percentage of the purchase price, he is also entitled to a percentage of thedifference between the listed price and the purchase price. In addition to this, he is paid an hourlyfee and promotional expenses. It's evident that a seller's agent earns much more than a buyer'sagent, since the latter will stand to lose in the event of the buyer getting a good deal.

Agents Dealing in Commercial Properties

These agents earn commission on the sale and purchase of land and commercial real estate. Thecommissions, for both residential and commercial real estate, are negotiated in a similar manner. Incase of rental apartments, the agent is paid a rental commission by the real estate companyresponsible for renting out homes and apartments.

Broker Price Opinion (BPO)

Agents can also earn money by offering their opinion on the worth of the property to lendinginstitutions. A fixed fee is paid for it.

Other Ways of Earning

Some states allow agents to appraise properties. In this case, they earn an appraisal fee.Experienced professionals can also earn by conducting seminars and training sessions.

When times are good, average salaries can be as high as $65,270. In fact, a really good agent canearn more than $100,000 a year. However, the median pay for these professionals in 2012 was$41,990 only.

Basis on Which They Make Money

In case of residential properties, an oversupply has resulted in pulling down the prices of homes.Many people are preferring renting to owning, since they are unable to afford the mortgagepayments. In this situation, commercial real estate agents can earn commissions by bringingtogether landlords and tenants. It is a good time for business owners to invest in commercialproperties, since panorama condo they can acquire property at a really cheaper price. However,

buying a commercial property is much more complicated than investing in a residential property.This is because, unlike residential deals, commercial ones do not require mandatory disclosures.Hence, a commercial real estate agent's services are indispensable. Thus, a commercial type agentcan hope to earn much more than an agent specializing in residential properties. However, the dealsare generally complicated and time-consuming and involve huge sums of money. Consequently, acommercial type agent is paid more, but at less frequent intervals.