How to Make a 6-figure Salary as a Real Estate Sales Person
Real estate has always had the potential to be a lucrative career. This is probably the reason there are nearly 45,000 real estate salespeople in Toronto alone. Real estate professionals help people to buy and sell homes and hope to make big money without the constraints of a typical 9-5 job.
Your earning potential as a real estate agent largely depends on your goals and dedication. Many agents work part-time and are happy to earn $30,000-$40,000 a year on the side. But if you want to make serious money, you really need to be on the top of your game and put your heart into your work.
Many new and aspiring real estate agents wonder whether it is possible to make $100,000 or more a year in this industry. It may be a bit difficult at the beginning of your career, but it is definitely attainable. Many agents make much more and if they can do it, so can you.
How many homes do you need to sell to make 6-figure income?
Real estate agents make a commission on every house they sell. The amount of commission is negotiable, but the standard is 5-percent of the property’s value. In a normal house transaction, the commission is split evenly between the seller’s agent and the buyer’s agent, so each side makes a 2.5-percent commission.
Let’s say you sold a condo for $500,000, your commission will be $15,000. Before you jump to the conclusion that you just have to sell 6-7 homes a year to make $100,000, you should know that you don’t get to keep the entire amount. A portion of your commission will go to your brokerage and a portion will go to cover any expenses you incurred to sell the house.
In Ontario, real estate agents are required to work under a brokerage. Your commission structure will vary from brokerage-to-brokerage, and you need to research what arrangement will work best for you. Some brokerages can demand up to 30 percent of your commission from each sale, while others charge corporate marketing fees to be able to list under their corporate identity. At Cityscape, we offer two of the best commission structures in the city.
- 100% commission. This option leaves all of the commission with the realtor where it belongs. The only cost to the realtor is a $100/month brokerage fee + $275 per transaction.
- 90/10 split. This option has the realtor paying the brokerage 10-percent of their commission plus a $275 fee per transaction, with no monthly fee.
With both options there are no hidden fees and no franchise fees. Cityscape aims for realtors to save as much money as possible because we know that being a realtor can be costly so why add more to the headaches?
On top of these great commission structures, as a part of the Cityscape team you get access to training seminars, social media marketing, 5 great office locations, in-house graphic design, and so much more!
Wondering why brokerages have to be paid?
Brokerages operate under the supervision of the Broker of Record. For brokerages, Ontario has the Real Estate and Business Brokers Act, 2002. The Broker of Record ensures that all the regulations specified in this law are complied with.
The Broker of Record supervises actions of brokers and salespersons in property transactions and can take reasonable steps to deal with any failure to comply with the regulations. It brings transparency to property transactions, reducing any scope for frauds or negligence.
A brokerage also invests in training real estate salespeople and providing them with marketing and technical support. They also provide office space to young agents and bear overhead costs.
Working under the close supervision of experienced brokers can go a long way in establishing the career of a young real estate agent. You might be prone to making mistakes when you are starting out, but a brokerage will guide you in the right direction whenever you are stuck.
Now back to the numbers! Let’s assume you have to share 10% of your commission with your brokerage. In that case, you will be left with nearly $13,500 from the above sales example. Just by selling 8 homes in a year, you will be able to earn over $100,000 in annual salary.
By selling higher priced homes, you can easily meet your income targets. This is exactly why you need training and help from experienced agents and brokers. You will learn how to get clients looking to buy and sell higher-priced properties.
There are a few other costs you have to take into consideration:
- Any individual online marketing campaigns (for example Facebook ads)
- Business cards
- Marketing material such as ‘for sale’ signs
Some of these expenses might be paid for by your brokerage depending on your agreement with them. Keep in mind real estate is like any other business. You have to invest in your business to get leads and convert them into clients.
How to land clients to achieve your $100,000 target
It’s difficult to land clients when you have no experience or expertise to show off at the beginning of your real estate career. Follow these simple steps to get your first few clients:
- Let everyone in your sphere of influence know that you are now working as a real estate agent. You can use social media, mailers, letters or flyers to spread the word out.
- Increase your online presence. Most people look for real estate agents online, so have a strong and impressive presence in the virtual world through your website and social media accounts.
- Visit open houses being organized by more experienced agents in your brokerage. Try to network with prospective buyers.
- Network with professionals in allied industries such as real estate lawyers, home inspectors, mortgage brokers and appraisers. Make an impression on them and ask them for referrals.
- Provide a great quality service to all your clients. Go the extra mile to ensure that they are satisfied with your services. Keep in mind every positive feedback will count.
Nearly 100,000 property transactions are happening in the Greater Toronto Area every year. It is now easier than ever to break into the market and make your mark. With the right mindset, work ethics, and brokerage team it is possible to make a 6-figure income working as a real estate agent in Toronto. If you want to learn more about our agent plans and how we can help you make a 6-figure salary click here.