What does it cost just to call yourself a RealtorĀ® ? Let's run the numbers.......

By
Real Estate Agent with John Aaroe Group BRE #01708344
http://actvra.in/t4r

What does it cost just to call yourself a Realtor® ?   Let's run the numbers.......

Have you ever thought about how much money it costs just to call yourself a Realtor® ?  We as agents know that it is expensive, but let's get right down to it and crunch the numbers.

For the sake of example, I will be using my own scenario as a licensed agent in the state of California, and we'll be basing this on an annual amount.

$155.00    - National Association of Realtor Dues
$184.00    - California Association of Realtor Dues
$150.00    - Local Association of Realtor Dues
$500.00    - MLS Access Fees
$1,200.00 - E&O Insurance
$85.00     - Business Cards
$385.00   - SupraKey Dues
$475.00   - SupraBoxes
$600.00    - Increased amount of auto insurance required by broker
$900.00    - Website
$600.00    - Open House Signs
$300.00    - For Sale Signs
$120.00    - Sign Riders
$375.00    - Continuing Education and Licensing Requirements

$6,029.00 - TOTAL

Now just to repeat, this is the total expense JUST TO CALL YOURSELF A REALTOR® .  So in monthly terms, it costs us $500 PER MONTH, just to call ourselves Realtors.

This has nothing to do with the actual expenses that we incur, which vary from one agent to the next, depending on volume, activity, location, etc.  Let's just give an example of some of these types of expenses:


$2,400.00 - Office Expense
$3,200.00 - Advertising
$1,200.00 - Auto Expense (just for real estate related activity)
$2,400.00 - Client Gifts
$1,200.00 - Travel Expense

 

So here's a MINIMUM of at least $10,000 in operating expenses on the average that are incurred.  And this has nothing to do with income taxes, broker splits, seller/buyer concessions, etc.

For those of you out there in the public realm reading this, take note:  It is not cheap nor easy being a licensed real estate agent.

Ya'll need to 'ppreciate.  Ya know what I'm sayin'?

 

 

 

 
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  1. Cindy Edwards 02/16/2012 12:31 PM
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Comments 13 New Comment

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Ambassador
625,491
Doug Rogers
Your Pineville Louisiana Agent
Bayou Properties Realty

In t he beginning there are some months when you earn ZERO bucks. Sadly the expenses do not go done those months...

February 16, 2012 12:06 PM
Rainer
373,069
Bill Reddington
Destin Florida Real Estate
Re/max Southern Realty

I have doing this for 23 years. No wonder i get broker oh I am a broker. This are thwe things that the general public doesn't see. They only see the paychecks. They say that when you take a listing that you just soent about $3000. This includes your time. OH Boy!

February 16, 2012 12:14 PM
Rainer
173,495
Jark Krysinski
TeamYVR Team Leader, BA,ABR,IRES,IMSD,LLB
REMAX CREST REALTY WESTSIDE

Good morning Ralph! It's really an interesting post! Apparently you are good at financing! LOL~ You tell us why we call ourselves realtors. Since we pay a lot, we have to work hard and earn it back, isn't it? :)

Thanks for sharing with us!

Best wishes to you and your business!

February 16, 2012 12:22 PM
Rainmaker
685,757
Cindy Edwards
CRS, GRI, PMN - Northeast Tennessee - 423-677-6677
RE/MAX Checkmate

Yes it is not just fast easy money becoming a Realtor.  Especially in the beginning before you have built your business.

February 16, 2012 12:25 PM
Ambassador
1,112,384
Dick Greenberg
Northern Colorado Residential Real Estate
New Paradigm Partners LLC

Hi Ralph - Yeah, but if you just sold one (pretty expensive) listing, it would pay for itself, right?

February 16, 2012 02:33 PM
Rainmaker
1,249,329
Carla Muss-Jacobs, Principal Broker/Owner
Buyer Focused ~ Buyer Results
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time

Yes, and travel expenses are a big factor for a buyer's agent.  They are creeping back to $4.00/gallon again.  GEEZ.  You laid it out very well Ralph.  It's expensive and toss in broker splits and/or referral fees, it really adds up.

February 16, 2012 04:36 PM
Rainmaker
629,048
Liz Wallace
Broker C21 Sherlock Homes, Rockville Centre, LI, N
Century 21 Sherlock Homes

Yup and everyone thinks we make these huge commissions for just being there.  I once had a buyer say to me at a closing "aren't you a lucky girl to make so much money so easy".  I almost jumped over the table and choked him.  

February 16, 2012 06:50 PM
Rainmaker
1,051,762
Ginny Gorman
Homes for Sale in North Kingstown RI and beyond
Phillips Post Road Realty ~ 401-529-7849~ RI Waterfront Real Estate

Ralph, well said, well stated...the consumer needs to understand and that some listings don't sell and some buyers do not buy...we only get paid when a closing happens..thanks!

February 17, 2012 05:58 AM
Rainmaker
511,824
Jill Sackler
Long Island's South Shore Real Estate Agent
Charles Rutenberg Realty Inc. "Said and Done!"

$1,200.00 for E & O? That sounds like an awful lot. I pay $450.00 and I've had agents tell me that was a lot.

February 18, 2012 05:12 PM
Rainer
30,267
Peter Michelbach
i Sell Real Estate

Ralph, let me copy this example please, and thanks for sharing.

I incure 40 % less expenses here in W. Australia.

I also would never take  a listing on bord if the seller would not pay upfront for all marketing costs: photography, for sale sign, internet advertising, and all media (newspaperr ads). Usually around $1,500/house; however for the last sale the seller, on a $750,000 incured only $500 expenses; sold before 1st home open, at 2,85 % comm less, 20% for my broker partner.  Thanks- great Post!

February 21, 2012 04:37 AM
Ambassador
1,089,616
Melissa Zavala
Broker, Escondido Real Estate, San Diego County
Broadpoint Properties

That's why you need to close one 500k deal per year. You'll cover your expenses and the rest is just gravy (and a way to support your family ;-)

February 22, 2012 07:14 PM
Ambassador
803,113
Debbie Laity
Your Real Estate Resource for Delta County, CO
Cedaredge Land Company

It seems like there is always some business bill to pay. It's not cheap, but the business is in my blood, and I love it.

March 10, 2012 08:15 PM
Rainmaker
304,595
Inna Ivchenko
Los Angeles / Valley Homes
Mannis Real Estate Group

It is really interesting what Peter shared. I'd wish we could ask upfront fees. The only upfront( i believe, here in California) is staging. All marketing, photo, video, prints, open houses food and drinks, etc. ~ all that are our upfront expenses, risk we take....

March 12, 2012 10:08 PM
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Ambassador
921,639

Ralph Gorgoglione

California Real Estate (800) 591-6121
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