If you’re a real estate agent, then you know that income can vary drastically from one month to the next. You may be wondering what factors contribute to this inconsistency, and whether or not there’s anything you can do about it.
There are many factors that affect real estate agent income.
As entrepreneurs, you are not guaranteed a salary and must take full ownership and responsibility for your own success and income.
Although to some people that might seem like a daunting task, it is that ownership over your income that allows you as a real estate agent to create the income you desire to build the life that you want.
That being said, being an entrepreneur is not easy and you must be able to build systems and processes in place to control your income month after month and year after year if you want any resemblance of sustained success in your business.
Most realtors go through life and business with no predictability in their business, which contributes to their fluctuating income and somewhat unstable and stressful lifestyle.
In this article, we’ll discuss three factors that have a significant impact on your income as a real estate agent and how you can create a sustainable and predictable business.
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3 Factors That Affect Real Estate Agent Income
– Your Unique Selling Proposition
– Your Business Systems
– Your Brokerage Commission Splits
1) Your Unique Selling Proposition
The first factor that affect real estate agent income is their unique selling proposition or the value of their offer to clients.
The real estate market is competitive. This means that it’s difficult to make a consistent income as a realtor without having a unique selling proposition.
It doesn’t matter how great your marketing skills are, or how much time you put in on the job; if you’re no different than all of the other agents out there, then you’ll have difficulty getting leads and closing deals.
When you sit down to analyze your real estate business, you must first determine what value you offer to clients that is different from all of the other agents.
Some agents specialize in a certain type of property, such as commercial or investment properties. Others may focus on a certain area, such as downtown condos or the single-family residences in the suburbs.
Think of ways that you can be different from the other 2 million real estate agents in the marketplace. How can you compete against iBuyers and Teams for listings? How are you marketing a property differently?
Whatever your focus is, make sure that you are able to articulate it in a sentence or two and that it’s something that potential clients can understand.
If you can’t succinctly explain what makes you different, then you’ll have a difficult time convincing leads to work with you instead of one of your competitors.
2) Your Business Systems
Ask yourself this question:
Are you in control of your business or is your business in control of you?
There is a key difference in both the income and lifestyle of the real estate agent who is able to control their business vs the agent who is running their business reactively with zero control or intentions.
Controlling your income and creating a predictable business is all about having systems in place.
Systems are the backbone of any successful, productive business. Good systems will allow you to control your income and create the life that you want without relying on chance or luck.
As entrepreneurs, real estate agents must put in the time and effort to create systems that will work for their business. Systems don’t happen overnight, they take time to build and require constant tweaking and improvement.
Some of the systems you may want to consider implementing in your business are:
– A lead generation system
– A CRM to track all leads, buyers, and sellers
– A process for getting listings
– A process for closing deals
– A process for following up with clients
– A system for tracking your income and expenses
Once you have these systems in place, it becomes much easier to create a sustainable business that isn’t reliant on chance, luck, or market conditions.
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3) Your Brokerage Commission Splits
Another factor that affect real estate agent income is the commission splits offered by their brokerage.
While many real estate agents are so focused on chasing their next deal to make ends meet or to reach their goal, they are actually putting on blinders and not considering the prospect of being able to make more money while doing the same or maybe even less work.
The truth is this: Real estate agents want to make more money, not sell more houses.
And the interesting thing is, sometimes, you do not have to sell more houses to make more money, the solution to a more predictable and sustainable income is actually right under your nose, you are just not looking in the right direction.
This is a classic example of looking at the tree and not the whole forest.
Real estate agents get way too caught up in their business to take a step back and analyze why they are in business in the first place and determine whether or not they are actually striving towards their true goals in life.
Your true goals are not to sell an additional house, your true goals are to have more money, buy that dream house, take that trip, or move into that nicer neighborhood.
You want to make more money and have more time freedom. Selling more houses is one way to get to that goal, getting a better compensation plan is another, more efficient way.
Real estate agent commission splits can vary significantly from one brokerage to another. Some brokerages may offer a 50/50 split, while others may offer a 70/30 split.
It’s important to do your research and find a brokerage that offers a commission split that is favorable to you.
Remember that not all models are as cut and dry as you may think, make sure you are actually doing the research and running your numbers through each brokerage model to get an actual side by side numbers comparison of how much money you would have made at each brokerage selling the same amount of homes.
If you’re not making the income you want at your current brokerage, then it may be time to consider switching brokerages.
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Bottom Line
You got your real estate license and became a real estate agent to create your dream lifestyle and build the income that you need to fund that dream.
Too many realtors today get caught up in their next deal and forget that the only reason they are even chasing deals is to be able to create time and money freedom.
As a real estate agent, it is vital that you focus on your income and not the vanity numbers that most agents talk about such as top producer status, how many deals you did, or even the volume of transactions sold.
If you are not making the income you want to fund the life you want to live, then you are not on the right track.
While there are many factors that affect real estate agent income, these three are some of the most important. By focusing on these three areas, you can take steps to increase your income and improve your business.
What factors do you think have the biggest impact on real estate agent income?
Do You Want to Increase Your Income as a Real Estate Agent and Create a More Sustainable Business? Learn More About the Opportunity to Partner with Our Incredible Group of Real Estate Agents Around the World that is Leveraging Technology, Organic Online Marketing, and Multiple Streams of Income to Build a Lifestyle They Never Need a Vacation From!