Real Estate Agent Income Drops Significantly
By Rhode Island Realtor Emilio DiSpirito
Over the past year, Realtors have seen a serious drop in income. It seems odd seeing as we are in the hottest housing market ever on record right!? Yes, that is what we thought, so we did some digging and here is what is going on!
Little to no inventory for entry buyers causing a chain of effect!
When baby boomers are considering keeping their oversized home because they love their mortgage rate and Generation X decides that they are not going to buy up because they do not want to spend that monthly nut, the first time home buyers are left with little inventory to choose from, therefore, home prices due to demand are increasing, yet feeding the circle more than ever!
Wall Street's role in real estate
Investors and not the kind tearing down walls and swinging a hammer, but the Bently driving, Starbucks drinking one's on Wall Street have entered the game.
Sites like HomeLight, Upnest, AgentMachine, and others are now charging Realtors a hefty referral fee of 25% to 35% on buyers and listings. It's actually noted that Wall Street will throw $16 Billion into real estate ad spend this year alone....
Let's break this down for you. An agent lists a $400,000 property at 6%, pays 3% to a buyers agent and is left with $12,000. From that $12,000, up to $4200 will go to that referral source which leaves the brokerage with $7800. Keep in mind that the agent now owes the brokerage their cut which is typically 40% which now leaves the agent with $3120. This agent is responsible for marketing, taxes, and insurance as well as board dues, overhead, etc.
The Rise of the Realtor?
People are tired of working the 9 to 5 and see friends and family doing very well in real estate. The amount of agents from 2011 is up 19%! There are roughly 1.3 Million Realtors in the United States today. With a large number of part-time agents, full-time agents have seen a decline in the number of transactions overall as people hire a friend or family member.
Schedule a call or consultation with Emilio DiSpirito here www.Calendly.com/emiliodiv
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