The real estate industry is a thriving business. Yet, getting your license to sell real estate doesn’t guarantee success. That’s why our “Tips For Making More Money As A Realtor” can help you.
To succeed, a Realtor must persuade people to invest in real properties. This includes buying residential properties. Skillful agents start out learning the profession and later expand into starting a brokerage.
KEY TAKEAWAYS
- 4.8 million home sales by Realtors are expected during 2022.
- Realtors can earn a good income if they learn how to sell.
- Different specialties (niches) exist for Realtors to choose from.
- One niche is selling Short Sales and we’ll show you how.
- Learn how to become a Buyer’s Agent.
- We’ll show you how to become a real estate investor.
- Check out 6 other niches you can specialize in.
- Learn how to become a broker and start your own brokerage.
How To Make More Money As A Realtor
The real estate sales business is simple. The more real estate you sell, the more you earn. Yet, if you don’t learn basic sales skills you will fail.
There are different ways to sell properties. Just learn how to convince buyers to buy.
Thus, you must learn how to sell to make money as a Realtor. So, read our tips to help you succeed as a Realtor.
Making More Money as a Realtor
The National Association of Realtors (NAR) June 21, 2022 study of the previous May home sales showed single-family home sales adjusted for an annual rate of 4.8 million home sales. The median single-family home price in May was $414,200, up by 14.6% from May of 2021. So, 4.8 million home sales by Realtors are expected during 2022.
With that many home sales for 2022, there is money to be earned by Realtors in 2022.
According to the McKissock Real Estate Learning Center in its 2022-2023 Real Estate Income Report, first-year agents earn around $55,300 and it increases to $82,000 for agents in their 2nd and 3rd years.
Besides the traditional listing agent seeking prospects for new listings, other specialties (niches) exist that Realtors can take advantage of.
1. Earn Fast Commissions by Selling Short Sales
After a long pandemic, many homeowners lost their jobs or failed to make it as remote workers from home. The ending of the pandemic brings home foreclosures to the forefront. Homeowners unable to pay their mortgage or home loans must list their homes for sale or become FSBOs.
According to Bankrate, a “short sale” is:
Thus, a smart listing agent can negotiate with the lender to accept less money. If the lender accepts an amount, the agent can list the home at a lower price. This is called a “short sale”. The seller gains from not having to pay the remaining debt.
Probably, is no profit for the seller, but getting out of debt and raising the credit score opens opportunities for future mortgages. A short sale gives the seller a chance to qualify for a future home purchase if his or her income is adequate and the credit score is high enough.
The commission percentage is the same for the Realtor whether it’s a normal sale or a short sale.
2. Become a Buyer’s Agent
Most home sales are made by agents other than the listing agent. They still share the commission with the listing broker. So, you can specialize in the buyer’s agent niche.
Focusing on helping buyers find their ideal home is a specialty (niche) in the real estate sales profession. Instead of prospecting listings, a buyer’s agent prospects buyers.
The buyer’s agent performs different marketing, advertising, and self-promotional skills and strategies than a listing agent.
The role of a buyer’s agent differs from the listing agent during a transaction. A buyer’s agent finds a buyer, negotiates with the seller for the buyer, and writes the offer for the buyer.
Buyers depend on their buyer’s agent to perform every aspect of the purchase process until the transaction closes.
3. Become a Real Estate Investor
The Close recommends becoming a real estate investor.
Many Realtors make money by investing in real estate. Use your knowledge and expertise to find profitable deals. As you help buyers and sellers you will learn how to earn profits by investing in real estate. You will recognize a good deal when you see it in your local MLS or FSBOs or with vacant land and properties.
Earn great returns while building your portfolio. Real estate often outperforms stocks and bonds investments.
You can start as a novice investor by joining local investment clubs (or starting your own club). This places you amongst seasoned investors who can mentor you. Just offer to help them look for good deals.
Instead of starting by investing your entire savings in your first purchase, lower the risks by partnering with a few others from the club. After a few buys & sales, you will learn how to do it yourself.
Of course, you don’t want to partner with just anyone. Consider how much work an investment takes with legal structures, maintenance, and property management. It’s better to form an investment team with different essential skills to spread the work.
The ideal investment team includes a:
- Realtor;
- Real estate lawyer; a
- Banker; and a
- Contractor.
Your team shares the risks and the profits while each member provides essential skills. In time, your team gains experience, confidence, and capital to make larger investments. Eventually, you can go solo or with just one partner to earn greater profits.
Also, your experience makes you a better Realtor for investors to work with to earn more commissions. Use your personal investing experience to easily relate with prospects as a Realtor.
4. Specialize in Other Niches
Besides, becoming a buyer’s agent or a short sales Realtor, we published blog posts describing 6 other niches:
- Become a 1031 Tax-Deferred Exchange Realtor to Double Your Commissions;
- “How Real Estate Agents Help Investors“;
- “How To Become a Probate Real Estate Agent”;
- Become a Foreclosures Specialist;
- “How to Become a House Flipping Agent“; and
- “Earn Big Commissions Selling Franchises“.
5. Become a Broker
After gaining experience as an agent and feeling confident, taking the broker’s exam to become a broker makes sense.
You take control of your own brokerage business. As the broker, you locate a good office and recruit agents. You are responsible for your agents and staff to work ethically and legally. If legal disputes arise, it’s your responsibility to resolve them.
Start small with yourself and a couple of agents and grow. Like any startup, you must keep initial expenses low.
As the broker, you have options on how you earn money. You can follow traditional brokerages and take a percentage of the total commissions your agents earn. Or, you can charge a monthly associate’s (desk) fee plus other fees for providing administrative, marketing, and transaction services.
Learn how to start your own brokerage by reading our informative blog post “How To Start 100% Commission Real Estate Brokerage”.
Tips For Making More Money As A Realtor – Conclusion
Bring it all together from our tips for making more money as a Realtor. Here’s how:
- Start as a Listing Agent; and
- Specialize in selling Short Sales; or
- Become a Buyer’s Agent; or
- Become a Realtor who invests in real estate; or
- Specialize in 6 other niches; and
- Get a broker’s license and start your own brokerage.
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Steven Rich, MBA – Guest Blogger
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