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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Show All Comments
Ambassador
626,781
Doug Rogers
Bayou Properties Realty - Pineville, LA
Your Pineville Louisiana Agent

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 #1
Rainer
384,298
Bill Reddington
Re/max Southern Realty - Destin, FL
Destin Florida Real Estate

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 #2
Rainer
174,195
Jark Krysinski
REMAX CREST REALTY WESTSIDE - Vancouver, BC
TeamYVR Team Leader, BA,ABR,IRES,IMSD,LLB

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 #3
Rainmaker
696,905
Cindy Edwards
RE/MAX Checkmate - Johnson City, TN
CRS, GRI, PMN - Northeast Tennessee - 423-677-6677

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 #4
Ambassador
1,146,015
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

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

February 16, 2012 02:33 PM #5
Rainmaker
1,264,853
Carla Muss-Jacobs, Principal Broker/Owner
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% o... - Portland, OR
Buyer Focused ~ Buyer Results

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 #6
Rainmaker
636,575
Liz Wallace
Century 21 Sherlock Homes - Rockville Centre, NY
Broker C21 Sherlock Homes, Rockville Centre, LI, N

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 #7
Rainmaker
1,068,770
Ginny Gorman
Phillips Post Road Realty ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

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 #8
Rainmaker
516,437
Jill Sackler
Charles Rutenberg Realty Inc. "Said and Done!" - Merrick, NY
Long Island's South Shore Real Estate Agent

$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 #9
Rainer
30,267
Peter Michelbach
International, INT
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 #10
Ambassador
1,092,880
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

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 #11
Ambassador
830,895
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

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 #12
Rainmaker
318,803
Inna Ivchenko
Mannis Real Estate Group - Calabasas, CA
Los Angeles / Valley Homes

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 #13
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Ralph Gorgoglione

California Real Estate (800) 591-6121
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