How Agents Get Paid: The Summary

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By: Darin "Sid" Cameron, CRS
Tue, Oct 24th, 2006 2:11 pm

How Agents Get Paid: The Summary

The most important thing to realize in understanding real estate compensation is to understand that you truly are working for the client (buyer or seller) and not the broker or brokerage. Other careers might emphasis the importance of a happy customer and might fire you should there be too many customer complaints, but when the day is over your salary, hourly wage, or even commission is being determined by the employer- not the customer. That is usually not the case in a real estate career; without clients there isn’t a paycheck- and the product you have to sell is yourself, not some gadget or other tangible product.

As a self-employed person, you need to realize there is a fine line between being self-employed and being unemployed. I know of an agent who has spent 40 hours a week, every week, for the past 4-5 years working in real estate as an agent- answering the phones at the office trying to get leads, sending out postcards, calendars, magnets, etc. This agent even has a website, a sign on the car, a name tag on the suit jacket, everything “the book” tells an agent to do to get business. Despite all of this, the agent suffered through a drought of more than 24 months without a commission check. That’s more than two years of full-time work- and marketing expenses- without a single penny in pay.

The purpose of this example isn’t to cast doubt on a real estate career or end the article on a sour note, but to make the most important point there is. If you want to know how you get paid in real estate, the answer is to know the industry, select your specialty, train yourself to be an expert, sharpen your sales skills, work hard, make your clients love you and market better than the other agents around you. After that, the commission checks will take care of themselves!