How Much Money Can You Make As a Realtor?

Director of Sales Chris Powles shares details on what you can make as a realtor and how  realty groups and teams structured. 

Transcript

SPEAKER_00 0:09

Hey everyone and welcome to the first premium episode we have for Career Yak. You are very special. If you've made it this far, you are at the first premium episode. Give yourself a round of applause. Anyways, also thank you for being a premium subscriber. It is very much appreciated. But anyway, Chris Powell was nice enough to go into more details regarding earning potential and also how the business is a realty group is structured. And so this is an extension of the interviews that we had with Chris. Again, same conversations, just a little bit of a behind-the-scenes look into some of the numbers behind what it takes to be a realtor and what to expect if that's a business that you want to get into. Again, very helpful. I found it really interesting. Whether you would want to become a realtor or not, maybe it's just giving you kind of some benchmarks of what can be made out there in the marketplace. I found it very interesting, and I hope you do too.

SPEAKER_01 1:14

So here's my rest of my chat, if you will, with one of the things that we really look at, I I don't know if I've mentioned this yet, the average agent um does like five to six deals a year, which based on you know kind of the average commission rate really only works out to be about like a fifty thousand dollars, you know, gross. So minus your expenses, you know, so you know, that's where and and you know, for our um agents on our team, first year, you know, every you know, the the five people that we currently have on the team, although actually one's still in their first twelve months, but uh the four people that are there currently in their first you know full twelve months uh did 18 transactions minimum. Um some of them d did up to twenty-six. Um the second year we had somebody do like forty-seven. I mean, so in a matter of a year, these people are earning, you know, anywhere from you know seventy-five to the girl that in her second year did, you know, forty-eight or forty-seven or something, uh earned like a hundred and sixty K in a year. Um so you can just it's just such a you can just really shift and turn or turn that around.

SPEAKER_00 2:36

While we're on the topic, I was gonna ask, could you shed light on going into compensation? Like, do they get paid a percentage of the sale price? Uh how and what's like a typical, and again, go in as much detail or a little as you want, but just what is how does that usually structure?

SPEAKER_01 2:58

Yeah, it's crazy. It's it's it's it's like kind of like the wild, wild western a little bit, and it's all over the place. So, you know, I think there was actually a rule recently passed where they now have to publicly post um the percentages that agents get. And so typically, you know, a seller agrees with a seller's agent on a percentage that they're gonna um pay to sell the house. You know, I've seen anywhere from four to seven percent. And then the seller's agent then splits a portion a percentage of that with the buyer's agent. And it's kind of confusing, but it's just it's just how it is. And so that can I I typically see that range anywhere from like two to three percent. And so that's what you know you can kind of expect for a buyer or a seller, you know, anywhere in that two to three percent range is pretty standard. Sometimes on the sell side they'll get a little bit more, three and a half percent. But there's more on the marketing side. You know, they do a lot more, they spend a lot more money marketing properties. And so, you know, two per you know, just for easy math, two percent of five hundred thousand a house is is ten grand. You know, um, you know, three percent of five hundred is fifteen. And so from there though, and eat this is where it starts to get really wonky, you know, so now you have you have this vera variation in what people get paid, you have a variation in the value of a property. Sure. Um, you also have a variation in what each brokerage charges, and so you know, um it's a little different because we're on a team, but they you know, they basically each brokerage is set up, you know, they it's really totally different, but I'll just share what I know from like Kelly Williams. Um they take, I want to say they switched it during COVID to be less per per check. It was like twenty to thirty percent, it was thirty now to twenty um percent of each closing, so of each you know, paycheck you get, up to um if you're a single agent, I think it's like twenty-four thousand dollars for the year. If if you're uh on a team, it's less. I want to say we're like at like twelve. And and the reason being is that the team provides a lot of support, you know, for that agent versus the office. Right. So with that, you know, you get the office space, the you know, um conference rooms, meetings, you know, printers, you know, there's some admin support there that help out with things. So right kind of what you're buying into. But once you pay that off, then everything else is you know 100% yours.

SPEAKER_00 5:31

Um it's like a mini overhead category for yourself, basically.

SPEAKER_01 5:38

Correct. Yeah. Gotcha. Yeah. And so um on the team, so so that you still pay that that brokerage split, and then the team split is, you know, and um be totally o honest and transparent, it's high, you know, but I think in my mind, you know, you get what you pay for. And so on the sell side, the agents will get um, you know, 30 to 35% depending on the source of the business. Uh and the buy on the buy side you get forty to fifty forty-five to fifty percent depending on the source of the business. So if you're uh bringing it in from like your family friends, you get a little bit more.

SPEAKER_00 6:14

Right.

SPEAKER_01 6:14

But again, you know, we have all the admin support, you know, they they pay for all the marketing. Like my uh profit and loss statements are super easy because I basically pay for gas and then I you know, and then I have an income, you know, what comes in for each of these tracks. So it's just it's just very easy and straightforward. I mean there's a few other things in there, but um they basically pay for all of that other stuff. Right.

SPEAKER_00 6:36

That makes sense.

SPEAKER_01 6:37

And so, you know, from there, I mean, you you just do the math. Like you can do five transactions, you know, and maybe maybe you're a solo agent, you know, you can do five transactions and maybe make fifty grand. Uh one of our things, you know, on the team, like that 18 is kind of the minimum, you know. We really think that's kind of the minimum to have a decent life in our area. But really, we want people to get closer to thirty where they can have a great life, you know, and you start earning, you know, over a hundred K. And so a lot of it then is just depending on how many um you know, transactions you're doing of what your kind of income potential can be.

SPEAKER_00 7:12

Right. Wow, super interesting, super helpful.

SPEAKER_01 7:16

Yeah, it's it's a it's very complex and can vary brokerage to brokerage, you know. And and this is the thing too, Chris, is like I hear all the time agents are like, well, that's kind of a lot of money, you know, like maybe I'm gonna go over to this little boutique brokerage, and boutique just needs small, you know, maybe they have like two or three agents. Um they're they're not gonna charge me anything. Or they're they're gonna charge me, you know, maybe five grand a year or something like that.

SPEAKER_00 7:41

Right.

SPEAKER_01 7:42

And and my question always in return is like uh is it are you more concerned about paying the least or netting the most? And and to me that's like it it's it's really hard for people to wrap their minds around, you know what I mean? Like, I mean you just heard what I said, you know, twenty, you know, up to twelve thousand to the office, and then for the for the entire year you never cap out on that team. So so you know, we get thirty to thirty-five or or forty-five to fifty. It's a big chunk. You know what I mean? Right. And so people have a really hard time with that. But I think the people that can step back, see the bigger picture, and say, you know what, I can actually work less hours, do more transactions, and earn more income with all of this support, like why don't I just do that? That that was that was at least the the conclusion that I came to. Right, no, that's interesting. Doing it on my own, you know, and you could certainly grow a business on your own and and you know, start your own team and do all that, but sure I switched careers at like the age of thirty-two, you know, and I was like, I don't want to build this from scratch. I wanna, you know, I want to just plug in and go.

SPEAKER_00 8:48

Yeah.

SPEAKER_01 8:48

So that's kind of the decision that I made.

SPEAKER_00 8:51

Well, no, that's good. And it maybe stage of life has a factor and things like that, but uh that's super cool. No, thanks for sharing. I appreciate that. That's good good to know if you're interested at all in you know getting into the game. I've I joke with uh or I've heard the jokes with like different sales jobs, like they make the commission plan so convoluted that you can't even check if they pay you the right thing. You just like accept it. You're like, uh, that's r that's a ballpark. Seems alright. So I won't.

SPEAKER_01 9:23

Yeah, it is confusing, you know, but like I feel like I don't know. I like once you get into it, it's actually pretty straightforward, and I think it's like it really makes sense. And like, you know, I don't love to use the word fair, but it feels really fair in my yeah, yeah, definitely.

SPEAKER_00 9:48

Hey again, premium subscribers. I'm talking to you, mom and dad, but no, in all seriousness, I'm sure there's a couple others out there. Hope you enjoyed that. Again, I would pay bucko bucks to hear kind of what Chris Powells had to say about the earning potential and different numbers associated with being a realtor. Um, but again, I don't have to pay for it because I did the interview and I have all the original files. So uh, anyways, hope you enjoyed that. I hope it was worth your time and money, and thanks for being a premium subscriber on this channel. Don't forget to join our email list to stay up to date, and we will see you next time.