Real estate remains one of the most attractive wealth creation opportunities in Australia and skilled real estate agents and property managers are keenly sought by property market buyers and sellers.
How are real estate agents paid?
The real estate industry is a results-oriented business and while most agents are placed on a retainer of between $35000 and $45000 per annum, there is potential to earn significantly more than that via commissions. These commissions come from both residential and commercial streams from:
- Property sales
- Letting agreements
Commission rates vary across the country and from one agency to the next, but real estate representatives typically earn between 40 and 50% of the commission charged on each sale.
Show me the Money
To demonstrate, imagine yourself as a real estate agent in the following situation:
- You sell a commercial property for $1,900,000 which your company charges 2.3% sales commission
- This equates to $43,700
- The terms of your employment are that you receive 40% of that commission
- That equals $17,480 (before tax)
- The property is commercial so the buyer needs to find a tenant and engages you to act on their behalf
- You let the property for $180,000 per year and your company charges 10% of the gross rental as a fee ($18,000)
- You earn 40% of that fee ($7,200) as well
Boom! That’s one sale of one property – can you see the possibilities in real estate?
Success has so Many Variables
Of course, potential is one thing but to be best placed to be a successful property agent, you need a lot of variables to go your way and there are a lot of factors that play a part in earning a decent living when selling or managing real estate:
- Property itself (condition, type of structure)
- Area (proximity to freeways, public transport, schools, amenities)
- Sale (private or auction, urgent, settlement period)
- Client (communication, instruction)
- Market (current climate, economy, comparable sales)
- Selling campaign (marketing plan, estimated sale price, commission fee, advertising)
And this is nowhere near an exhaustive list of factors that impact a real estate agent’s success.
Real Estate in the Digital Age
Unlike many other traditional occupations, real estate agency is a profession that has avoided becoming redundant as we enter the digital age. In fact, real estate agencies have evolved to thrive successfully within the online selling market and welcomed new technology. Many types of technology have aided rather than hindered real estate agents, such as:
- using drones for photographing properties to assist advertising
- virtual tours of properties that prospective buyers can engage with online
- online selling sites to widen the exposure of properties for sale or rent
Real estate agent courses
All real estate courses available through a registered training organisation (RTO), will give you the relevant knowledge and framework to work legally and ethically in the property market. The information they provide is vital and you can’t practise as a real estate agent without being properly accredited. However, the legal qualifications are just one small part of becoming a successful agent.
Ultimately, real estate is a sales business and sales are all about people skills. You may be a ‘born salesperson’ with super people skills and in that case, the legal and statutory requirements of the real estate business are all that you will need. However, if you don’t consider yourself a natural salesperson, that’s no reason to rule yourself out of the real estate industry.
Most real estate courses have modules dedicated to crucial people skills including:
- Handling conflict
- Reading body language
- Closing the sale
When you are armed with the right people skills and equipped with adequate legal knowledge, real estate will not only prove to be a lucrative business, it will also allow you to network within other professional communities such as the legal and banking professions. You will become a respected and highly sought-after member of your local community.
Real estate will remain an attractive wealth creation option for many Australians for the foreseeable future. Globally, real estate is deemed a safe, practical method of investment and that perspective is not going to change anytime soon. A properly recognised course within Australia will give you the accreditation to become involved as an agent in this stable, lucrative industry. You can forge a career helping people – Australians and internationals alike – buy their dream home. And of course, learning some insider tips won’t hurt your own goals of financial freedom either.