Working as a Realtor gives you an opportunity to realize unlimited income, but how do you do it? The strategies highlighted below can get you started on making serious money as a real estate agent.
Be a Referral Agent
Most people study online for their real estate license, take the test, and become a buyer’s or seller’s agent. But did you know you can make money as an agent when you aren’t even part of the transaction?
This is what’s known as a referral agent. This real estate professional gets a piece of the commission by sending buyers and sellers to another real estate agent.
That other agent does all the legwork for the transaction, but you receive a referral fee when the transaction closes. A common referral fee is about 25% of the commission received by the agent who did most of the legwork.
So if he or she lands a $10,000 commission, you might get about $2,500 without having done all that much work. But why would you get a real estate license just to refer clients to other agents?
The answer is that certain people see the wisdom of obtaining the license because they encounter many potential clients in their full-time work.
For example, say you’re an Uber driver, and you run into people who want to buy or sell a home every week. You could get your real estate license and work only as a referral agent.
Another method is to make friends with salespeople who work for home builders. If you get to know such folks, you might be able to send business their way when their buyers need to sell homes … and this arrangement can net you referral fees.
The crucial part is, you’ll need to connect with good, reputable real estate agents to whom you can send the business. If you can do that, you could earn partial commissions just by networking in your day job.
Buy Investment Properties
You don’t have to be a real estate agent to buy investment properties, but it makes the transactions easier and more profitable.
You can find below-market-value investment properties and acquire them without having to pay a real estate commission. You can use some of the commission you got for your down payment instead.
And you’ll have access to desirable homes as soon as or even before they hit the MLS, so you might be able to grab them before anyone else can. Also, you can represent yourself when you sell your home, so you never have to pay another commission.
Finally, if you buy a home, you could even keep the commission the buyer’s agent would normally receive.
Make Short Sales
Many homeowners discover they cannot sell their home for what the amount they owe. In this situation, as the listing agent you would negotiate with the bank and convince that institution to take a sum that’s less than it’s owed.
If the lender takes the deal, you can sell the home in the usual way. This is called a short sale, and it can be lucrative in a depressed real estate market.
Broker price opinions (BPOs) compare various homes to the one on the market to arrive at an approximate list price. You can earn up to $100 for every BPO you do, and they don’t take long.
Work as a Property Manager
As you network as a real estate agent, you may develop contacts who need property managers for their investors. This work can include finding tenants, maintaining the homes, and collecting rent.
The typical commission for this work is 10% of the monthly rental income. So you might easily make $100 to $150 per property. Once the place is occupied by a paying tenant, there isn’t much work, other than occasional repairs.
Follow the above tips, and you can expand your income as a real estate agent every month.