Suppose you want to buy or sell a home; you may have to work with a realtor. Real estate agents make your work easier by finding the best property sellers and buyers in the market.
Even so, note that you’ll have to pay them a certain amount of money for their time and effort. More often than not, realtors get paid on a commission basis. They receive a certain percentage of the property’s selling price.
- 1 Can a real estate agent get paid for showing houses only?
- 2 Does the total commission belong to the real estate agent?
- 3 How can I get into real estate with no money?
- 4 Is it hard to get a job in real estate?
There are many factors that determine the exact amount of money realtors make in a year. Some of them include the number of sales and the value of properties.
The majority of real estate agents obtain their earnings from the commission generated from the property selling price. This commission is popularly known as the closing cost or realtor’s fees in the real estate industry.
The realtor’s commission comes from the total costs received from the sale of the property. The seller of the property is responsible for paying the real estate agent.
On average, real estate agents obtain a commission of approximately 5% to 6% of the total proceeds from the final sale. For example, if the seller receives $200,000 from the sale of a house, they need to pay the realtor at least $10,000.
The realtor’s fees are often included in the selling price of the house. For example, if the house costs $400,000, the realtor will sell the house for approximately $424,000. In most instances, the seller will send funds to the brokerage firm directly.
The realtor is usually free to negotiate the commission rate with the seller. So, sometimes, they receive a higher commission.
However, as a realtor, it can be hard to negotiate your commission, especially when dealing with a difficult seller. Nonetheless, it is important to remain polite and professional during negotiations.
Can a real estate agent get paid for showing houses only?
A realtor is only paid when a sale goes through. Remember, the commission comes from the proceeds of the sale. It is, therefore, safe to conclude that the realtor won’t get paid if they don’t sell.
As mentioned earlier, the realtor’s fees come from the total costs obtained from the sale. So, even if they take time to show you different houses and properties, they don’t get paid when there is no sale.
Even so, this depends on the agreement between the seller and the agent. At times, the agent might require compensation that caters to the transportation and convenience costs.
So, if you are a home flipper or seller, ensure you understand all the terms and conditions of the realtor before hiring them. Doing this will prevent unnecessary misunderstandings between you and your real estate agent.
Does the total commission belong to the real estate agent?
In most instances, the total commission is not directed to the real estate agent. The brokerage firm they work for will determine how much they will get.
Undoubtedly, a specific amount should go to the firm directly. The realtor usually has a payment contract with the firm to facilitate swift and easy payment.
How can I get into real estate with no money?
Most real estate investments cost a fortune. However, they deliver substantial returns. Can you get into real estate with no money? Well, yes.
If you have little or no money, you need to have the right skills and knowledge to invest in real estate. Nevertheless, in most instances, you will need a down payment to obtain funding.
Occasionally, investors use other people’s money to invest in the real estate industry. Some successful investors don’t use their cash for real estate investments.
And this helps them grow their financial credibility and increase their capacity to invest in real estate.
Even so, you have to grasp the concept and technique of investing in other people’s money successfully. Let’s look at some of the ways you can invest in real estate with no money or by using other people’s capital.
Consider a lease option
This is one of the best ways to venture into real estate if you have little or no money. Typically, the property owner will charge high rental payments every month.
The payments usually cater to the buying price of the property. Once you complete your monthly payments, you can fully own the property.
Obtain funding from hard money lenders
If you cannot afford to obtain a bank or credit union loan, consider getting funds from hard money lenders. This often involves getting funds from private groups or individuals.
Such loans have minimal requirements; hence it is much easier to obtain them. However, note that these loans are more expensive and have a short payment period.
Creating partnerships with like-minded people
If you have no money for real estate investing, consider forming partnerships with like-minded people. Your partners can be willing to help you out until you get on your feet.
An equity partner can help you finance your property. But you have to come up with favorable terms and conditions for both of you.
Getting a home equity loan
Applying for a home equity loan is one of the best ways to venture into real estate if you have inadequate capital.
If your house has considerable equity, consider using it to fund your new property. Nevertheless, note that home equity loans require you to put your house as collateral. Therefore, failure to pay the loan can lead to the foreclosure of your home.
Is it hard to get a job in real estate?
Having a job in the real estate industry is beneficial. You get to enjoy flexible working hours and a hefty paycheck. Nonetheless, there are always downsides to working in the real estate industry.
Besides, it takes a lot of hard work, commitment, and dedication to become a successful realtor. As the old saying goes, nothing good comes easy.
Ultimately, it is not hard to get a job in real estate if you have the will, determination, and perseverance.
Qualifications: First, you have to be of legal age before getting a real estate agent’s license. Also, you should have a clean criminal record. Needless to say, this depends on your state guidelines.
Education: Most real estate agent jobs require the completion of a business course. You can either complete the course virtually or in the classroom. On average, you need about 40 to 80 hours of educational training before getting a job in the real estate industry.
Additionally, you have to pass all the tests in your class. In most states, you have to pass a national test before becoming a realtor. Note that the national tests are not a walk in the park. You need to be mentally prepared before you sit for the test.
Can I do real estate as a side job?
If you are looking for a side hustle, consider working in the real estate industry. This industry offers a wide range of jobs that do not consume a lot of time and effort.
Besides, it can help you obtain a decent amount of income. Below are some of the real estate side hustles you need to consider in 2021.
Real estate agent
Being a realtor can be a great side hustle for many people. You can always do the job in the afternoons or during the weekends.
And real estate agents earn decent commissions. However, you need to obtain a realtor’s license before you can apply for this job.
Real estate blogger
You can create content on real estate during your free time. This could be in the form of written articles or videos.
The best thing about being a real estate blogger is that you can work from the comfort of your own home. And you don’t need a real estate agent license to qualify as a real estate content writer.
The majority of property owners are looking for professionals to manage their property. Being a property manager consumes less time and effort. Thus, it can be a great side hustle.
All you have to do is collect rent and ensure the property is in good condition at all times. Property management does not require any start-up capital. You can find such jobs online or by calling real estate investors directly.
Buying a rental investment property
If you have enough capital, consider purchasing a rental property. Rental properties are the most profitable investments since they enable you to obtain a constant positive cash flow.
Consider purchasing several apartments, if possible. Managing a rental property is not challenging. Besides, you can always hire a property manager if you have a busy schedule.
Start working in the real estate business
There are many benefits to working in the real estate industry. Realtors enjoy large paychecks and flexible working hours. However, you have to meet specific criteria before becoming a realtor.
More often than not, you’ll need the right educational background and knowledge. Also, you have to possess excellent communication and customer service skills.
Realtors don’t have to work on a full-time basis. Therefore, you can always find a good side hustle in the real estate industry.