Money is a powerful motivator, and it’s among the top reasons many people have for getting a real estate license. But South Carolina real estate brokers and agents are not compensated for their work like the average 9-to-5 workers.
How do real estate agents get paid?
Most real estate agents get paid a commission based upon the sale price of a property. The commissions of a real estate transaction are negotiable and tend to range anywhere from 1% all the way up to 10%.
Let’s use a 5% commission rate as an example. For a $300,000 property, the 5% commission paid upon the closing of that property will be $15,000. However, that does not mean that the agent walks away with $15,000. The broker for whom the agent works will receive a portion of the commission.
The most common arrangement of payment between a broker and an agent is the commission split. Depending on what has been agreed to when the broker agreed to hold the agent’s license, a certain percentage of the commission is paid to the broker and the remaining percentage to the agent. Assuming the traditional 50/50 commission split, each will receive a commission check of $7,500 at the closing of escrow on that one property.
Using the example sale and assuming only one property closes per month, a real estate agent is looking at making $90,000 a year. A real estate agent who is dedicated and in tune with the market in which he or she is working has a much greater income potential than commissions from one single closing per month. When you are dealing with commissions of this size, you are talking major income increases. Even two closings per month could raise your annual income to $180,000.
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How do real estate managing brokers get paid?
As a South Carolina real estate broker, commissions come even easier. By holding the real estate license of the brokers who work under you and maintaining their space in your offices to whatever degree you are contracted to do so, you will collect your part of the commission split not just from the one agent, but every agent under your brokerage. If you have five brokers working out of your office and each is closing just one deal per month (assuming a $300,000 sale price each), then as their managing broker, you would be making $37,500 per month without ever showing a property.
There is plenty of income potential as a South Carolina real estate agent
Whether you are an agent or managing broker, there is enormous potential for income generation that is only limited by your willingness to work at it.
As a real estate agent, experience and extensive knowledge of the real estate market will make you an income you never thought possible. As a broker, surrounding yourself with experienced and knowledgeable agents can build a fortune.
Thinking about starting a real estate career in South Carolina?
Our South Carolina real estate learning packages range from the required pre-licensing course to everything you need for a strong start in your real estate career.