[JOURNEY] Becoming a Real Estate Agent (Realtor) from Scratch to Earn Six-Figure Income in One Year

noddinglady

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Hey, thanks for asking! No, definitely not on target. I have had two runs of nothing but rejected offers...both lasting two months each. April & May I had 18 rejections in a row. Of course, this is not your usual housing market but it still stings the pocketbook. I'm also in rural Idaho where most of the clients are only approved for $200k and you don't get many options that low (most are above $250k now).

Then again in Aug & Sept, another two months of rejections. I'd estimate earnings around $70k by the end of the year. I have two more waiting to close. One will pay me $4k and the other $2k. I also split my commissions 50/50 with my broker. That takes a big chunk but he also feeds me 99% of my leads.

I have taken up a part-time job to create a steady income while I grow my real estate "pipeline."
Thanks for the update. Regarding rejections, do you still maintain the relationship with the clients until they do finally land a place or are they more one and done scenarios? I know they're under contract with you for X time, but do you think you'll still retain them in the future once real estate settles down in your area? Are you able to expand further out to larger cities or is that too much of a burden? Also, you seem to know how to market yourself well. How much of your success has relied upon the broker/firm providing you business versus you generating it for yourself via Zillow Ads or word of mouth etc? I guess I'm asking, do you think its worth splitting commissions with your broker for what they provide in return?
 

RRunner

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Similar to above questions... If commission on selling a house is 5% and the agent works for a brokerage what is the split on the commission? What % does the agent get?
 

Big Ron

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Similar to above questions... If commission on selling a house is 5% and the agent works for a brokerage what is the split on the commission? What % does the agent get?
In most cases, when signing up to SELL your house, your contract with your Listing Agent says you will pay a 6% total commission. 3% of it for the Listing Agent who is doing all the work of listing the house, marketing and advertising, setting up appointments, followups, and all the paperwork on the selling side once you have a buyer. The other 3% goes to the Buyer's Agent (which is what I do).

The Buyer's Agent is responsible for finding appropriate houses to look at, booking the tours, showing the houses, then helping negotiate the deal and all the corresponding paperwork on the buyer's side of the deal.

There are different splits depending on your arrangements with your broker, even when it comes to buying or selling. The broker I work for keeps 75% of the listing commission but handles every aspect that I listed above. The only thing a Listing Agent has to do in my group is meet with a potential seller and get them to commit on paper that we can sell their house. All the other stuff is handled by people in our office. The listing, advertising, setting up appointments and schedules, etc. Once a Listing Agent gets a person to sign a contract to sell, they can coast until it sells. I don't care much for this side of it. But in this seller's market, it has been really easy to get 20 offers on every house and usually get more than you ask for on the sales price so...

But I did this twice this year. The first sellers were total a-holes and may have scarred my opinion of selling for life. The second has been on the market for four months and nobody is interested.

On the buyer's side, in my situation, it is a 50-50 split. There are employees in my office who handle scheduling appointments for inspections and follow-up on appraisals, etc. I basically find the house, show it, and get the buyer to commit to buying it on paper. If the Purchase Offer is accepted by the seller, most of the rest of the deal is handled by our office people. But I still get 50% instead of 25%.

Example:

I have a house closing soon that sold for $390,000. Once the title company completes all the paperwork, my brokerage will get $11,700 (3% of the sale). Then, the 50/50 comes into play and I get 50% of $11,700 which is $5,850. I have to pay fees to Keller Williams, the agency I work for, and will probably take home around $5,000. Those fees to the agency have an annual cap. But the 50/50 to my broker is permanent.

Anyone who is a licensed real estate agent can sit for the Broker's exam. You have to be a licensed agent for two years, then take and pass a test (just like you do to become a real estate agent).

In my world, that $5,000 will pay all my monthly bills. So, it would be easy to say "All I have to do is sell one house per month!"

There are four problems with that:

  1. You have seen already where I spoke about selling nothing for two months in a row...twice this year. So if you make $15,000 in commission after two months of zeroes, it still averages out to $5,000/mo.
  2. Not very many of the houses I have sold have been over $250,000. That's almost half the commission right there due to the price of the house. See example below.
  3. Some Listing Agents decide to negotiate some savings for their seller by reducing the commission that the Buyer's Agent gets. WHICH SUCKS for us. I still do the exact same amount of work but only get 2.5% commission instead of 3%. That half percent can mean $1000+ for me. I have had probably five of my sales this year be 2.5% commission.
  4. If someone outside of your agency refers the buyer to me, I have to give them a cut. It's called a referral fee and there is actual paperwork that both parties sign to make it legal. Referral Fees are typically 25-30% in my area. So if I sell that referral a home, I lose a 30% referral fee right off the top (hits me and my broker). Then the usual splits happen. This has happened to probably 5 of my sales this year. Referrals are pretty much liked and appreciated by everyone in the industry because it is kind of like an extra chance to sell a house. But in this market where there are SO many buyers, I have seen people turning down referrals. You still do the exact same amount of work on a referral customer that you would do for someone who called you from Zillow.
Here's a screenshot of the real estate software we use called BoomTown. You can see that I have a house closing for $205,000 that will gross $5,125 for my brokerage, and my split will be $2,562. I'll have to pay agency fees out of that and probably take home around $2200.

Overall it shows I've sold 20 homes this year, assuming my two pending down blow up...which is possible on every transaction. And has happened a handful of times this year. One was a $1.3M property.

It also shows my earnings around $7,437 pending and $47,996 closed for a total of $55,433 (again, this is before agency fees).

1635732367804.png

The upside of making only $55,000 this year (and I could still sell a few before the year is over) is this:

  • 2021 is my first year in real estate. Every month my "pipeline" or list of customers grows. I continue to contact all of them through email and text (which is what BoomTown is really good at doing automatically). So each year, my sales should go up as my "customer base" or pipeline gets bigger and bigger.
  • As an agent, my skills have become tenfold better. I now know who NOT to waste my time on and who to focus on. This utilized my time better and save gas money.
Let me know if this has been helpful. I appreciate feedback. Even if it is just a LIKE.
 
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RRunner

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Let me know if this has been helpful. I appreciate feedback. Even if it is just a LIKE.

Wow, fantastic! Thanks.

I have a friend who is an agent and she just sold a nice house (800k) and I thought "Holy shit, 5% is 40K, I wonder what her cut is?"
 

noddinglady

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Great info, thanks! Would you say being a people person or more sociable/outgoing is a skill an agent must have? I'm looking to become an agent but I don't posse those qualities. I am good with telling it like it is and am more transactional from a personality standpoint. I think in some respects the client shouldn't care about who their agent is as long as they get what they want, but on the other hand I feel its a matter of them wanting to be nurtured/hand held/gently guided so they trust your opinion and you'll have their best interests in mind. I feel I would be more matter of fact/get to the point. Do you think an agent can be successful with having a more "transactional" personality versus what you offer?
 

Big Ron

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Great info, thanks! Would you say being a people person or more sociable/outgoing is a skill an agent must have? I'm looking to become an agent but I don't posse those qualities. I am good with telling it like it is and am more transactional from a personality standpoint. I think in some respects the client shouldn't care about who their agent is as long as they get what they want, but on the other hand I feel its a matter of them wanting to be nurtured/hand held/gently guided so they trust your opinion and you'll have their best interests in mind. I feel I would be more matter of fact/get to the point. Do you think an agent can be successful with having a more "transactional" personality versus what you offer?
I think if you look historically at society, there are plenty of people who have been successful in business with all kinds of personalities. Some of my favorite comedians were of a dry sense of humor. Steven Wright and Ron White come to mind. To be successful in real estate, as in any sales job, is mostly about follow-through and consistency. You have to stay on top of your task list and communicate with people daily. It doesn't have to be all frat boy or cheerleader type behavior.

Some of the transactions I may have lost this year came from customers who I was working with...then went a month without contacting them. The next time I reach out, they tell me they already bought a home. I was like "you just told me four weeks ago you needed a little time?" Apparently, that could be as little as a week. So consistent follow-up is key.

And really, the only time you are face to face is when you are showing the house. You don't have to be in-person to do the paperwork these days. It can all be done electronically thanks to Covid. So you start building your relationship on the phone, with text, and through emails. Then go show some houses and write some offers.

Does this answer your question?
 

Big Ron

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End of Year pretty much here. Might as well post my numbers.

Anything I sell the rest of December isn't going to close until 2022.

I have three pending that will close before Dec 31st.

I got an award last night at our company Christmas party for selling $5,790,000 in gross sales.

I'm over $6M when my last few close this month.

1639606034756.png

The Fees you have to pay to be a realtor still seem a bit overwhelming.

I'll be compiling my expenses for taxes here pretty soon and can report that at some point.

Here's my CPA's two cents on what to deduct:

"Anything that is “ordinary & necessary” (as the IRS says) to you business is deductible: Phone, Mileage, Postage, Computer, Internet, Promotional material, Education"

Still waiting for the final three to pay out to know for sure but here's what 2021 is looking like for my real estate journey:

1639609056207.png

$65k in a new field, learning mostly on my own. Remember, I come from a healthcare background. This sales stuff isn't exactly my forte.

Pros:

  1. Make my own schedule
  2. Work from home
  3. Wear whatever I want (done wearing ties and dress shirts)
Cons:

  1. You never know when you'll get paid
  2. Clients can change their mind even after a contract is signed, no guarantees.
  3. You have to deal with some idiots who waste your time...but that's pretty much everywhere.
  4. Good amount of frustrations working with banks, title companies, other real estate agencies, etc.
 

blogmen

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Awesome journey!

I think you did very well income-wise for your first year in a new field. You seem friendly, maybe that helped with the sales.
 

Big Ron

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6M in sales and around 65k in commission? Seems low. Do you have to share with the broker?
Yes, it is very low. I think I explained somewhere else in this thread that I give 50% of the income to my broker. In return, I get qualified leads handed to me so I don't have to cold call people or go knocking door to door. I also have to pay my brokerage, Keller Williams.

Is it worth it, at first it it because I am being taught everything I need to know about real estate. Once ready to fly solo, I'll leave the team and no longer give away 50% of my income.
 

Big Ron

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Great news, my broker just released a tiered commission structure. The more deals you make, the less money he takes.

1641338382279.png

My 2022 Goals include selling at least 40 units (2021 was 24). That puts me in the 60% bracket. A 60/40 split with brokers seems pretty common. But there are some brokers who only charge a flat fee of like, $500 and that's it. But you usually have to provide your own leads.

If my broker continues to provide leads and I can sell 60+, I'll be on a 70/30 split...which I'm pretty happy with considering the amount of work I won't have to do generating my own leads.

On that note, I am also upping my game on Zillow advertising.

I had previously spent $200/month to get my feet wet, so to speak, in Zillow advertising.

Note: I was highly uneducated in how this worked and have since learned a ton. I have a meeting schedule this Friday with my Zillow Premier Rep to make changes for 2022.

The other important thing to point out before showing Zillow ad numbers is that Zillow allows you to split your ad costs with lenders. I pitched my favorite local lender to go in half with me and she agreed. So each month, starting in March 2021, she paid $107/mo and I paid $107/mo.

The Ad Numbers:

March - Dec = 9 months x $107/mo = $963 is my annual spend for Zillow advertising. (Total ad spend would be double with lender spend added)

I received 57 leads throughout the year on my Zillow account.

963/57 = $16.90 per lead was my cost each

Out of my 24 sales, 6 of them were Zillow leads.

My average sales commision was $2,625 in 2021.

So as long as one zillow lead that I received turned into a sale, I made a profit from the advertisement (doubled my spend).

The mistake I made in 2021 is that I don't know how to separate out which Zillow leads came from my broker and which came from my ad spend.

I can see the total number that I received from each account but not which ones turned into sales. I will be tracking that in 2022.

Don't forget, advertising expense is a tax write-off.

1641339462076.png
 

Big Ron

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This guy is legit and I can't believe he is offering it for free. Of course, he probably doesn't expect it to get slapped here on BHW either :)

I have seen this gentleman in action in and out of the boardroom. He knows his stuff and is a great human being.

Andy Cole shared a link.​

bTYLzLz6SLc.png

· 7m1l8202Scc3t6h0n1o488 ·

95 sales and 16.5m in transaction volume in my first year as a listing agent with the Spencer Hasch Team in San Antonio, TX back in 2017.
(while using BoomTown)
I've been extremely fortunate to have some incredible mentors in my life up to this point...
So I figured it was well past time for me to return the favor to those who are serious about taking their game to the next level.
This free course contains 43 recorded videos, breaking down everything that I've learned in 8 years of working in this space.
Absolutely nothing is left out.
Some of my favorite topics include:

✅
How to develop unshakeable confidence
✅
How to flip any objection into a commission check
✅
And how to punch through the noise and make your unresponsive leads pay attention to you (regardless of how busy or impossible to get a hold of they are)

I spent an entire Saturday recording this course because I literally see agents making the same mistakes over and over and over again and over again...

And I DON'T want you to be that agent!!

I hope this course helps you (and your team) close more deals.

Link to it all

Enjoy!
1f600.png


I suggest you download it all before it disappears.
 

Boriss

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This guy is legit and I can't believe he is offering it for free. Of course, he probably doesn't expect it to get slapped here on BHW either :)

I have seen this gentleman in action in and out of the boardroom. He knows his stuff and is a great human being.

Andy Cole shared a link.​

bTYLzLz6SLc.png

· 7m1l8202Scc3t6h0n1o488 ·

95 sales and 16.5m in transaction volume in my first year as a listing agent with the Spencer Hasch Team in San Antonio, TX back in 2017.
(while using BoomTown)
I've been extremely fortunate to have some incredible mentors in my life up to this point...
So I figured it was well past time for me to return the favor to those who are serious about taking their game to the next level.
This free course contains 43 recorded videos, breaking down everything that I've learned in 8 years of working in this space.
Absolutely nothing is left out.
Some of my favorite topics include:

✅
How to develop unshakeable confidence
✅
How to flip any objection into a commission check
✅
And how to punch through the noise and make your unresponsive leads pay attention to you (regardless of how busy or impossible to get a hold of they are)

I spent an entire Saturday recording this course because I literally see agents making the same mistakes over and over and over again and over again...

And I DON'T want you to be that agent!!

I hope this course helps you (and your team) close more deals.

Link to it all

Enjoy!
1f600.png


I suggest you download it all before it disappears.

Thank you @Big Ron
If someone helps this... we added all the videos into 1 big video file. I can be viewed or downloaded from here:

Code:
https://mega.nz/file/5zhC0azQ#6Ua5u8RQn1AXienls2Gp3ATBwftpYABsoDQX3gbbSyk
 
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