Last updated on June 12th, 2018
Many people believe that a career of real estate agent has some glamour in it. A general assumption about real estate agent is that the person is going places, showing great properties to the clients, hobnobbing with high profile clients and being paid handsomely. But very few real estate agents enjoy a celebrity status. A majority of agents struggle and they have to earn money through commission in a hard way.
People from a variety of social, educational, financial and other backgrounds chose to become real estate agent. So, their aspirations vary a lot. Some of them really want to make a good name for them, while many others such as retired people may become real estate agent just to pass time and make some friends. Their goals are different.
But if you want to be a dedicated real estate agent, you would first like to know how the agents make money. You should also get some advice to become a successful real estate agent.
Here Are 7 Tips On How To Earn Money As A Real Estate Agent
1. Become A Buyer’s Agent
Most of the real estate agent becomes a buyer’s agent to make money. Such an agent works for the people who are planning to buy a house. A job of the agent is to take the clients to the sites where houses are available for sale and show several such properties. The agent will also write offers on houses for the buyers. The buyers of house are mostly dependent on the agent to take care of every aspect of the buying process until the transaction is complete.
The buyer’s agent makes good money. But their earnings will depend on the number of buyers are on their list. Moreover, finding out the property for sale and showing them to the buyers is a time-consuming job. So, you must be prepared to dedicate a lot of time.
2. List Homes For Sellers
You can also work as a real estate agent who is listing homes for sellers. The job of a listing agent is quite different from a buyer’s agent. The listing agent works with the sellers of houses or any other property.
The agent first helps the sellers to find out the right profitable price for the property to be sold, get it ready for sale and then list the property in MLS. The agent is responsible also for negotiating with the buyers to extract the best prices for the buyers and completes the transaction process. Here is how the listing agent readies a house for sale.
The listing agent has only to list the properties for sale and so it is much easier a job than that of buyer’s agent. However, the success of a listing agent will depend on his or her ability to work with more home sellers.
3. Make Money By Selling Short Sales
Many homeowners confront the problem that they cannot sell their homes for sufficient money that can pay off the home loan taken from a bank. They do not get enough price for the home from the buyers. In that situation, a listing real estate agent negotiates with the bank and convinces it to take less money. If the bank accepts the amount, the agent can then list the seller’s home normally. This is known as a short sale.
But the negotiations with the banks may take many weeks, even months before it accepts the offer. The agent will also be completing all the legal processes associated with such a short sale.
4. Completing Broker Price Opinions
Broker Price Opinion [BPO] is a report that only licensed appraisers can prepare to value homes. You can work as a BPO report maker if you are a licensed agent. You will be comparing several homes for pricing with the relevant statistics and commentary for the benefit of home sellers. As a real estate agent preparing BPOs, you can earn anywhere from $30 to $100. The job is simple and easy with many BPOs requiring an inspection of homes or just having the pictures of exteriors and interiors.
5. Become A Property Manager
Another way to earn money as a real estate agent is to manage the properties for homeowners and investors. This job includes managing, maintaining and repairing the properties, finding renters, collecting rent and keeping a close eye on accounting. The owner of the property will pay you a percentage of the rents collected on the monthly basis. Most of the property managers get 10 percent of the collected rent. The property managers earn money also as leasing fees.
However, to earn more, you should take many properties under your fold for management. This way, you will ensure a consistent stream of monthly income.
6. Become A Commercial Real Estate Agent
Commercial real estate agents earn lucrative income. They are paid good monthly salary whereas residential property agents get payment on the commission basis. Commercial real agents earn much more than their residential property counterparts do. This is because the commercial agents have extensive knowledge of valuation of commercial properties. This way, you can start your real estate business successfully and earn more.
7. Work As A Broker
As a broker, you will be in charge of the real estate agents in your office. You will also be running the office. Your responsibility will be to ensure that everyone works legally and you will take care of any legal disputes. You can start by having a couple of agents in your office and then grow up from there to have more agents working under you.
As a broker, you will earn a percentage of the agents’ commissions as well as desk fees or advertisement money from the agents. However, many states will allow you to become a broker only after a certain amount of time of getting your real estate agent’s license.
So, these are the jobs you can do as a real estate agent and earn money regularly.
But you will also be interested to know how real estate commissions are paid. Generally, there is a buyer broker agreement, under which the payment is made directly to a buyer’s broker and then the real estate agent gets the commission. But most of the agents are paid through a listing agreement that is signed by the listing agent and the seller. The agent will sign the document on behalf of the brokerage.