How Much Do You Pay Realtor To Sell Your Home – If you’ve ever watched HGTV, you already know that there are many shows featuring California real estate professionals. With home prices on the rise, it’s easy to imagine that California real estate agents can make a good living.
The Flip or Flop duo may have helped thousands renovate their homes over the 10 years of their TV series, but how does the average California real estate agent compare?
How Much Do You Pay Realtor To Sell Your Home
Learn about all the fees and costs you must pay to obtain a California real estate license.
How Much Money Do Real Estate Agents Make?
If you’re looking for an average, Indeed.com has calculated it for you. According to their research, by the fall of 2022, the average annual salary of agents in California was $91,363.
But that’s not the whole story. Nationally, real estate agent salaries range from $28,270 for the bottom 10 percent to $102,170 for the top 10 percent. Why is there such a big difference in salary? How much you work will affect your income, and location makes a difference. And you’ll find that this is as true for California as it is for the rest of the country.
As anyone who lives in California knows, there is a big difference between Northern California and Southern California. Similarly, the lifestyle and income of real estate agents in big cities is very different from those in more rural areas.
According to Indeed.com (Fall 2022), here’s what real estate agents make in California’s 10 largest cities:
What’s A Real Estate Agent Really Worth?
How much do California real estate agents take home after each closing? There are several commission breakdowns to consider.
The first is the total amount of commission paid by the seller. In California, it’s anywhere from 1-6% of the sale price. The standard is 5-6%, but for higher value properties (ie $1+ million) the commission can be as high as 4-5%. The amount is negotiated between the seller and the listing agent before the contract is signed.
The commission is then split between the listing and the buyer’s agent. Usually, the commission is split 50/50. Sometimes you may come across a listing that offers the buyer’s agent a higher split in hopes of attracting more leads. The opposite can also be true. The listing agent may charge 3.5% to cover the costs of selling the property, and the buyer may only offer the agent 2.5%.
Another possibility is dual agency. If the listing agent finds the buyer and represents both, they receive the full commission.
How Much Do ‘selling Sunset’ Agents Make? Realtor Commission
Finally, the commission is split between the agent and the broker. The broker takes the proceeds from the sale and then pays their agent their cut. Agreed commission breakdowns can vary from agent to agent, even within the same broker. New agents can get a 50/50 split, while experienced agents can get upwards of 70/30 or 80/20.
The commission has two other possible scenarios. You can pay a monthly broker fee and keep 100% of the commission. The broker may also offer a sliding scale commission breakdown. In this case, the commission starts at about 40/50 or less than 50/50, and the more you sell, the more profitable it becomes.
Last but not least is the tax factor. California is known for its high taxes, and brokers do not deduct anything when they pay the agent their share of the commission. This means that every time the agent receives a commission check, he has to withhold taxes.
As independent contractors, real estate agents must pay estimated taxes to the IRS quarterly. Estimated taxes include income tax and self-employment tax, which includes Medicare and Social Security taxes. You should refer to your latest tax brackets to determine how much you should pay each quarter.
The Listing Agreement: Para. 3, 4 And 5
California also has a state income tax. California has 10 income tax brackets, the most in the country. Unfortunately, the state is also known for having the highest income tax rate at 12.3%. But it only applies to individual income over $625,370 or married joint income over $1,250,739. California agents and brokers charge anywhere from 0 to 9.3%.
At the end of the day, real estate is a profession where your salary doesn’t define you. Work your way up the ranks and you could become one of the best paid agents in the country. Real estate agents can make a lot of money! I have been a real estate agent and broker for over 15 years and have done very well. However, most agents pay the same salary as other industries. According to most sources, the average income of real estate agents is between $40,000 and $50,000. Although this number can be misleading because many agents have to pay their broker a commission split and many other expenses for insurance, MLS and education that most employees do not pay. While most agents don’t make an amazing amount of money, agents who work long hours or stay in business make over $100,000 a year!
Average and median income for real estate agents can be high, but many agents only work part-time, many agents don’t know what they’re doing, and many agents are self-employed. I have been an agent and broker since 2002. I have seen many agents make over $300,000 a year and many other agents struggling. I’m not going to judge what you can make as an agent based on the average salary because there are so many variables involved.
The National Association of Realtors (NAR) usually has great information on salaries, but this is now on their site:
Realtor Commissions Are Not Negotiable
I’m not sure how much I trust their stats! I found some other sources that look much better!
“In real estate, more hours usually mean more money. According to our research, agents who work 40 to 50 hours a week can expect to earn about $68,000. Agents who work 51 working up to 59 hours expect to earn around $85,000. It should be noted that these are just estimates and many factors can affect these numbers.”
The more you work at your career, the more money you make! Agents are said to make $20,000 a year in their first year, while agents who have been in business for over 10 years make over $100,000 a year!
More than 21 percent of realtors make more than $100,000 a year, which shows that Realtors can make a lot of money when working full-time and on a full-time basis. You need a plan, you need goals, and you need to be able to manage your business to be successful in real estate. Money and freedom can’t be beat if you become a successful agent!
Are Real Estate Agent Fees A Racket?
Real estate agents earn a commission on every home they sell. Commissions are always negotiable, but HUD pays listing agents up to three percent and buyers’ agents up to three percent, so I’ll use three percent as the commission for the example. Real estate agents usually represent one side of the transaction. Buyer or seller. Each side of this deal can take three percent, but then it’s negotiable. In bank owner listings, the listing agent sometimes charges a lower percentage than the buyer’s agent. Commissions can be four percent in some cases or one percent like REO auctions. If you sell a $100,000 home, the agent’s three percent commission will be worth $3,000, but the agent doesn’t always keep the entire commission. Most real estate agents only get paid when they sell a home, unless they work for a group or commercial real estate agent.
When you become a real estate agent, you first need to work for a broker. You don’t have to work with this broker, but you need to hang your license with the broker. Different brokers offer different levels of support, from nothing to intensive training programs and mentors. The more training, staff support and office space you get, the lower your commission should be. The commission split can range from 50/50 to 100 percent with a small transaction fee paid to the broker. Remember, the low commission split is not worth it if you never sell the house. I think new agents should go with the broker that offers the best training, not the highest distribution.
If you sell a house for $100,000, take a three percent commission and pay your broker 40 percent, you keep $1,800. You will have more expenses that we have to tell you too, but $100,000 in sales is very low in many parts of the country.
In addition to splitting your commission with your broker, there are other costs involved in being a real estate agent. Many of these costs will vary greatly depending on your marketing and the contract with your broker. Some brokers charge for a real office on top of the commission split, giving you advertising, MLS fees, realtor fees,
Can You Sell A House In California Without A Realtor?
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