I couldn't agree more with Kristin's post. Most non-Realtors have no idea how much money (not to mention our time) we put out. Though this year, I have made a vow to myself not to waste time... will be very selective. Just sayin'
GREAT POST Kristin!
Realtor Expenses Take a Big Chunk of our Commission Checks
The NAR fees, the State Fees, Errors and Omissions Insurance, Supra Fees, MLS fees, Desk Fees, Office Printing fees and Training fees all add up to a lot of expenses for any agent and especially for new agents.
Other expenses too like clothes, nails, shoes, gasoline, car repairs, car signs, advertising of listings and sometimes a nicer car. Plus we need equipment like cameras, signs, sign riders, open house gifts, advertising materials, web sites, computers, cell phones, iPads, ink, paper, stamps, colored flyers and a lot of office supplies. All these expenses come out of our commission checks too.
Then there are the non real estate monthly expenses; rent or house payment, insurance, food, credit cards, tuition, day-care, and many other expenses for the family household.
And don’t forget State and Federal taxes; either quarterly or one big chunk in April. We are all self-employed so we typically get the full amount (3% of the selling price) less the broker fees and then we must pay for all the above mentioned items.
On short sales, we spend numerous hours calling on the phone/computer dealing with the banks while working on the files. If we broke down our hourly rate based on these phone hours, would it look good? No, if we kept track of all our hours, we might not even make minimum wages.
Don’t forget the contracts, the counters, the numerous disclosures we prepare, and the reports we must order and sent out. This takes experience, time, and money. But we do not do billable hours so it comes out of our final commission check also.
Buyers and Sellers want to hire educated agents so we must do the continual training, drive nice cars and dress appropriately. If we don’t, we look like we have no business and then we are not hired. “Dressing for Success” is a true concept for most professionals and Real Estate is not any exception to that premise.
Most agents need to plan for the new year so they do not run into financial problems during the year. Financial planning seminars are important and usually professional will come to the agent’s offices and give free classes. Take advantage of these classes as they will help you have more money in your bank accounts and less stress in your daily lives.
Yes, we make a nice income but we pay out a lot too. Real Estate is fun and rewarding and most of us love it but we need to make good business decisions to make a living. Keep your receipts and plan for the future and you will be a successful Realtor.
Happy New Year 2012 and may your business flourish this year!
Call Kristin Hamilton at 909-557-6966 to list your home.
Inland Empire Homeowners, please call me for a Comprehensive Market Analysis to assist you with marketing your home for sale and getting the best price possible. Buyers, if you are planning to purchase real estate, let me assist you in finding the right home. Google me at Kristin Hamilton, Keller Williams Realty, Redlands, CA
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Kristin Hamilton
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909.557.6966
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I couldn't agree with you more. I have had a lot of people tell me that they don't want to use a realtor because all realtors are rich and charge way too much. They have no idea what we pay out just to stay in business. thanks for posting
Well put, thank you for rebloging this. People just assume we get to keep the whole check everytime, no expenses just life styles of the rich and not so famous
Rose Mary; Really! They have no idea. Plus, they don't consider if we don't sell a home, we DON'T eat.
Kim: People assume is exactly right.
Hi Kat - Kristin wrote an excellent post. There are so many expenses to be a real estate agent not to mention the non-business expenses as well.
great reblog. I think that some people do understand this, but most don't. That said...wouldn't do anything else for a living. :)
Karen; Agreed. But sometimes I do wonder about another career. ;-)
Marc; I hadn't thought about that, but good point. One way of another, we put out a lot of $$$.
Hi Kat,
Thanks for re-blogging this post. This is a subject we all feel strongly about. Real Estate is a great career but we must budget accordingly and not spend wildly.
I do often give my clients a breakdown on what happens to that "huge" commission I allegedly get paid. THey are always surprised.