Real Estate Agent – How They Make Money
Have you ever wondered how your real estate agent gets paid? Sure, there is talk of commission, percentages, fees, closing costs- all of these are broken down at closing. But, what does he actually get? Surprisingly, you do not pay your agent a commission. Only a licensed broker can get paid a commission and he is the one who pays your agent. There are also a number of ways to divvy up the pay. The person who worked so hard to sell or find your house may not be making as much as you think. Here are some of the ways the money makes it to your representative:
A real estate agent works for a licensed broker or brokerage house. When he brings a client to the table, either for buying or selling, an agreement is signed between the client and the brokerage house. Typically when a sale is made, an average of 6% of the sale price is commission for the brokers. It is not always a straight split, but close to half, which goes to the broker representing the seller and the buyer.
Once the commission is divided up between the houses, the brokers then decide how much to pass down to the agent who actually did the leg work. This amount varies depending on experience, time with the company and the productivity level of the representative. A brand new representative may only get thirty percent of the cut where as a seasoned pro that brings in a ton of business, may get half or more of the proceeds.
Another option is that the agent gets all of the commission, but pays a monthly fee to the brokerage house. This is sort of a rent. He gets an office and uses the company name to back his reputation. This is an attractive deal to many representatives, because they pay the same amount every month, no matter how much they make. For new people to the business who have not built up a client list and do not benefit from word-of-mouth yet, the traditional split is usually preferable, because they may not make enough every month to make the set payment.
There are some factors that eat into the final profit made by the brokerage house and the representative. If the house is a franchise, there is a fee that must be paid to them out of every commission. Sometimes referrals come into play as well. If a brokerage house sends a customer to you, they will want a referral fee. There is a percentage that also comes out of the commission.
Typically, this commission is paid by the seller at closing. However, depending on the type of market, this is negotiable. Another negotiable point is how the commission is divided. If you are having a difficult time in selling, because the market is flooded with houses, you may want your representative to offer a bigger cut of the commission to the buyer’s representative. This may help close the deal.
So, as you can see, there is more to the payment than simply figuring 6%. After everyone else gets the money, your real estate agent is then paid the amount.
Why You Wouldn’t Regret Renting a Flat in Glasgow
If you’re looking for the perfect place to stay, you should rent a flat in Glasgow. Glasgow is one of the nicest places to stay and gives you the opportunity to explore one of Scotland’s most vibrant and up and coming cities, without the costly price tag of staying somewhere that is considered chic and exclusive, even though it really is.
The Perfect City
Glasgow is the perfect city, so if you rent a flat in Glasgow, you’re guaranteed the perfect place to stay. With bustling shopping areas, lots of businesses and support for many more and a comfortable interesting region to explore, plus good connections to other areas, including an hour’s train ride to Edinburgh, it’s one of the nicest places in Scotland to stay, perhaps only surpassed in some ways by Edinburgh itself.
Steeped in history, it’s got a younger feel than some other Scottish towns and cities, giving it a class of its own – with renovations and modernisation constantly being undertaken, if you want to live in a city that’s right on the cutting edge of the Scottish culture and architecture, Glasgow is the perfect place to stay, and it’s easy to rent a flat in Glasgow. Just look out for the areas that you’d like to stay in and get hunting!
Investing in Brisbane Real Estate
In 2011 property investment in Brisbane has been steady while other parts of the world have suffered serious declines. This is largely due to the continued expansion of the population in Brisbane and, in fact, the whole of South East Queensland, coupled with the under supply of rental accommodation.
2010 saw the first of the Aussie baby boomer generation reach retirement age, migrating to and purchasing homes in South East Queensland and particularly the greater Brisbane area to enjoy a lifestyle envied across the world. The rapid population growth in Brisbane and surrounding suburbs continues to outrun investment purchases, keeping prices relatively steady and rental demand high compared with other states and countries around the world.
This rate of growth is not likely to slow down any time soon, with predictions of more than 25 percent of the nation’s total population growth by 2035 settling in South East Queensland, which will place Brisbane ahead of Melbourne as Australia’s second largest city.
Obviously, all these extra people have to live somewhere and according to the State Government’s South-East Queensland Regional Plan, in excess of 550,000 new homes will be built in the next twenty years. This has caused the more astute investor to look further afield to the outer Brisbane suburbs where rental demand is high and returns promising.
In reality, a well selected investment property in Brisbane’s outer suburbs can produce a significantly better return both in the short and long term than the traditionally sought after property within 7or even 15 km of the central business district. Well renowned property analyst Michael Matusik says living within 15 kms of the Brisbane central business district will soon be affordable only by the wealthy. He also predicts that by the year 2026 as many as 43 percent of people will be renting throughout the greater Brisbane region.
For the astute investor, the type of property purchased will determine the success or failure of any venture and a potential investor would be wise to remember that property investment in Brisbane, or anywhere else for that matter, is all about growth and returns. As always, there are some areas that are outperforming others, which emphasizes the necessity of consulting with local investment property specialists who have no vested interest in promoting a particular suburb.
While there will always be a slight degree of uncertainty in buying real estate, the position with Brisbane and South East Queensland properties compares extremely favourably with properties in places like the USA and the UK that have been hit hard by the current economic climate.
So what should you be looking for?
The ideal investment is a property that is going to offer good predicted capital growth, a high rental yield, sustained tenancy and require a minimum personal input to hold for the long term. Experienced investment property specialists understand this and source properties to suit the individual investor’s plan and that will achieve their financial goals.
In short, if you can get a property that offers in excess of 6 percent yield in a high predicted growth area – you’re onto a winner!