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How much do real estate agents make?

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How much do real estate agents make?

A real estate agent is an intermediary who helps real estate sellers and buyers to connect and complete the sale of a property. A real estate agent puts effort to find buyers for someone who wants to sell a house. Similarly, the real estate agent also helps someone wanting to buy a home in finding one that met their requirements. A real estate agent would not just connect buyers and sellers butsupports them until the transaction is complete. In return for doing all this work, the real estate agent gets a commission from the buyer, seller, or both.Real estate agents don’t usually get a salary but earn money from commission on property sales.

The Commission

The commission a real estate agent charges depends on various factors. On average, it is 6%[i] of the transaction value. Since the seller is receiving the money, usually the seller pays the commission. Where a property is in high demand, the buyer may be asked to contribute to the commission. The 6% commission may not go to one person. It may have to split between different people.

How much the agent earns?

There may be two agents in a transaction, one the listing agent who lists the house for sale. The other is the buyer’s agent who guides the buyer to buy the property. The 6% commission is  split between both the agents. Real estate agents in the US have to work with a real estate broker who actually receives the money. The broker usually takes his part of the commission. Usually a 60:40 divide, where the agent gets 60% and the broker 40%. This can vary depending on how experienced you are. The more your experience, the higher is your share.

As a real estate agent, if you list out a property for sale and close the sale for $100,000, you will get 3% of the sale value since you are the listing agent. This would be $3,000. Of this, 40% goes to the broker, which means you end up with $1,800. In case you are a broker yourself along with being a real estate agent, you can keep the entire $3,000. If you are agent for both seller and buyer, then you can keep the entire commission, which would be $6,000.

You must remember that you will receive payment only after the sale is closed. This may take 30 to 60 days. As a real estate agent, you will not be working only on one sale but with multiple clients. Each sale will earn you a commission. That is how real estate agents make money.

How much do they actually earn?

If you were wondering how much a real estate agent earns every year, you will find the following statistics interesting.

As per the statistics[ii] from the Bureau of Labor Statistics, as on May 2018m a real estate agent earns $61,720 every year.

The Bureau also shows an analysis of earnings based on percentiles. As per this, the following are details of earnings.

  • The top real estate agents earn on average $112,610 per year.
  • On the lower end, real estate agents earn $24,650.
  • The median earnings as per this analysis is $48,690.

The statistics also show that real estate agents who work in recreation and amusement earn annual wages of $190,650, which is the highest for this profession.

There are state-wise statistics that are interesting and help you understand how much a real estate agent makes in your state.

  • The highest number of real estate agents are in Florida (18,480), they earn $58,730 annually on average.
  • The next highest is Texas that employs 17,580 real estate agents who earn on average $70,520 annually.
  • The state where real estate agents get the highest commission is New York. This is not surprising since the state has the highest real estate prices. On average, a real estate agent in New York can earn $116,460.
  • Rhode Island is where real estate agents earn the second highest pay at $84,280.
  • The metropolitan areas in the country, where real estate agents can earn the highest are:
    • Midland in Texas – $111,560
    • New York-Newark-Jersey City-NY-NJ-PA – $104,180
  • The Eastern Wyoming and East Central Illinois are areas where real estate agents can earn the most in a non-metro area. They earn on average $84,330 and $83,970 respectively.

The above clearly shows that location affects the earnings of a real estate agent. Real estate agents can hope to make a decent earning and can even hope to earn very good money from this business.

How a real estate agent can maximize earnings?

A real estate agent can maximize his earnings in the following ways:

  • The secret to earning big money is to focus on locations that have a higher market value.
  • It makes sense to focus on many small transactions, rather than put too much effort to maybe sell one large property.
  • Multiple transactions are needed to make money. A good real estate agent works with many clients simultaneously to increase the chances of earning money.
  • The more effort and time put in, the more potential for earnings. While some people treat real estate work as a part-time job, if you want to make a lot of money you need to consider it a full-time vocation.
  • With experience, you can become a real estate broker. That will help you earn more money.

[i]https://www.mortgagecalculator.biz/c/commissions.php

[ii]https://www.bls.gov/oes/current/oes419022.htm

Finance

How to open up with a current account with bad credit

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How to open up with a current account with bad credit 1

At times, through no fault of your own, you may find yourself in a difficult financial position – like many people have throughout the pandemic. What’s worse is when you need to create a current account but find yourself being refused due to bad credit.

However, there are options for people out there. To help, Jonny Sabinsky, Head of Communications at budgeting fintech, thinkmoney, has answered the most common questions about opening up a current account whilst having bad credit.

“Can I get a current account with bad credit?”

Many banks may refuse a person with bad credit’s application for a standard current account with an overdraft facility or a rewards scheme. This is because a bank may see you as more of a risk to lend to.

However, they’re still likely to accept you for a basic account as these are designed to help those who have a bad credit rating. They provide a safe place to store your incomings, deposit cash and cheques, withdraw money, and set up direct debits and standing orders. They also allow you to build your credit rating up by showing you can handle money responsibly.

“Am I eligible for a basic account?”

As long as you’re over the age of 18, have a form of ID and can show proof of address, the option of a basic bank account should be available to you. However, this can depend on the bank and the specific account.

Six unexpected tips to boost your credit score

As soon as you have opened your basic bank account, you can begin to improve your credit score. However, there are six other unexpected ways in which you can improve your credit score in the meantime:

1.      Ask your landlord to put you on the Rental Exchange Initiative

The Rental Exchange Initiative gives you the credit you deserve for paying your rent on time, whether you rent privately or through the council. It’s really simple to do, too. Just ask your landlord or social housing customer service team to add you to the initiative.

2.      Always stay 50% below your credit limit

What does this even mean? Well, it basically means that you shouldn’t be maxing out your credit cards. You may think that as long as you pay off your credit card on time then it doesn’t matter how much is on there, right? Wrong. If you’re constantly reaching your limit, then this can look like you need your credit card to survive and that you’re not financially secure. If you can remain at least 50%, preferably lower, below your limit, then this will help to improve your score.

3.      Pay money off your credit card twice a month

Jonny Sabinsky

Jonny Sabinsky

So, you pay off your credit card every month – great! But the only problem is that your creditors only report to the credit reference agencies once a month. If you haven’t paid off your bill before that report is sent, and if you run up a big bill, then it can look like you’re overusing your credit. How to tackle this? Just pay twice a month!

4.      When applying for credit, add a landline number

When applying for credit, the reference agencies like to see stability. With this in mind, even the smallest of things can make a big difference. Having a landline ties you to a fixed address, so some lenders may be willing to offer you a loan, mortgage or credit card if you have one.

5.      Don’t open a new credit account for six months

One of the easiest ways to boost your credit score is by refraining from opening up a new form of credit six months after you last created credit. This shows future lenders that you don’t rely on credit regularly and can strengthen your case. This will also help you refrain from possibly being rejected from credit, and, therefore, damaging your credit score.

6.      Know what doesn’t affect your credit score

There are a lot of myths about what does and does not affect your credit score, so it’s important to be able to understand the most common misconceptions. For example, previous occupants at your home address do not affect your credit score. Instead, credit companies are only interested in those that you’re linked to financially, such as a joint bank account.

Another misconception is that your credit history is stored forever. However, the truth is that most of the information in your credit report is only stored for around six years, and in most instances, credit companies are most interested in your most recent history.

Finally, there’s a myth that checking your credit score or credit report impacts your score. This is not true – you can check your report as many times as you like.

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Finance

It’s time to revolutionise collections and arrears

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It’s time to revolutionise collections and arrears 2

By Katie Pender, Head of Client Solutions, Target Group

Why lenders need to fundamentally change their arrears and collection strategies when payment holidays end

Banking has undergone a wholesale shift during the pandemic. It’s forced one of the world’s oldest and most influential sectors to work in new ways – digitisation and automation have come to the fore, we’re seeing drastically reduced high street traffic, and online has become king. Whilst the sector has managed to navigate the turbulence relatively well, it’s also benefitted from emergency government schemes to help keep the country liquid (such as reducing the amount of capital required to set against lending). The increase in lending power has no doubt helped operations, and allowed lenders to execute roll outs of schemes such as the Bounce Back Loan Scheme and mortgage payment holidays.

However, whilst lenders have adapted relatively well, the same can’t be said for all their customers. It’s fair to say that the pandemic has put many businesses and consumers into financial positions that would have seemed incomprehensible just 12 months ago. Government schemes have looked to support people across the spectrum, from job losses to freeing up extra monthly cash. But it’s now getting close to the point that some of this emergency funding will need to be repaid. For those reliant on the State to help them through month-to-month, this cliff-edge will have a severe consequence on their income and ability to pay off debt.

Living costs, utilities, food – I could go on – are becoming more expensive, so interest added repayments will be another worry for millions.

This position that many customers find themselves in will present the financial sector with a new set of unique challenges. Whether it’s a mortgage payment holiday or a business loan, lenders will now need to cope with the operational demand of a spike in arrears whilst balancing the needs of customers – many of whom will not be able to instantly recover and return to the previous status quo. Lenders themselves will also need to dedicate more time and resources to managing these collections, whilst battling legacy IT systems and a hybrid workforce who may require specialist training. Whilst the sector may be revelling in the benefits of automation, collections and arrears is not something that can be solved by a chatbot. It requires specialist teams, negotiations and dealing with very human emotions, including guilt, embarrassment and hopelessness.

So, what can financial institutions do to manage this spike?

First, they need to appreciate then re-evaluate their customer base, the demographics of which will have shifted significantly over the past 12 months. We expect to see the following segments in the customer base:

  • Uncertain: Whilst this will be a feeling for many, for the self-employed or those on furlough, the next 6-12 months could see significant changes. All of these people are facing uncertainty and will have needs beyond payment holidays. They will need further support to understand what additional help is available to them both in the short and longer term until they can be sure of more stability.
  • Troubled: These customers may have experienced an unexpected redundancy, perhaps after a period of furlough. They may well have found new employment, but at lower pay. They will have suffered a significant financial impact and will be at risk of not being able to meet payments in the short as well as the longer-term. They are likely to seek urgent support to manage existing debt, or to avoid falling into future debt.
  • Curtailed: Some people will have faced lower levels of income due to furlough or pay cuts, leading them to request payment holidays. They may want, or be able to make over-payments to rebalance their increased instalments over time, or conversely extend their terms to avoid higher payments over the same term.
  • Fortuitous: Whilst affected by the wider economic uncertainty, this section of customers may have seen surplus income during the pandemic due to reduced spending. They may wish to plan to avoid future risks, perhaps by saving more or to repay any money owed more quickly than planned.
Katie Pender

Katie Pender

Whatever the financial impact of the pandemic, there is also the mental health impact of over 12 months of disruption, meaning now more than ever it’s vital to focus on good outcomes. Here are three tactics which can facilitate not only preparing for the spike in collections and arrears, but also good outcomes.

  1. Forbearance, affordability and empathy are key

Data is vital across every part of financial services, and this is no different when it comes to collections. In fact, open banking will change how lenders are able to structure repayment plans, as it provides a more holistic and accurate view of people’s financial situations – something the customers themselves are too embarrassed to provide. Sadly, financial matters are still a taboo topic, and resultantly, many customers are not truthful about how much they are able to afford, which can then make collections difficult.

Open Banking and analytics provide insight into previous spending and behavioural patterns, allowing lenders to evaluate the current situation and a customer’s genuine affordability. It can also be used to predict how this may change in the future. This now allows for flexible decision-making – adapting support for the customer as their financial position evolves. There is no one-size-fits-all for arrears, and as a customer’s situation changes – be this for better or for worse – lenders should be able to be flexible in their approach to enable fair treatment of the customer and quickly adjust their payments. Lenders should also ensure that specialist trained agents are available to support vulnerable customers, those who have complex needs or those in uncertain situations; those who are able to readily display empathy and understanding and work towards achieving the best outcome for all.

  1. Leverage different channels and encourage self-service where appropriate

Financial Services was one of the first verticals to adopt online, and today’s customers are used to accessing and providing financial information that way. With lenders now dealing with multiple generations as customers – all with different preferences, offering different platforms is a way to engage multiple stakeholders simultaneously. Many will still prefer face to face or over the phone, but some will prefer online, and using self-service provisions – at a time and place that suits them.

Self-service is a cost-effective way of arranging and collecting payments, and allows for a 24/7 provision. This digital offering also goes some way to overcoming the embarrassment factor. Online expenditure assessments and the setting up of payments helps to remove some of those barriers. It not only provides a simple route for customers who may have otherwise ignored the problem, but it also delivers positive outcomes for

lenders.

  1. Forbearance drives proactivity

When consumers miss, or know they are going to miss a payment, early engagement is vital to prevent debt spiralling. It’s a situation lenders are familiar with, as according to Money Facts, 40% of customers have missed a payment for a credit card or loan. Proactivity is therefore key. Communicating clearly, and the use of education so consumers understand there are multiple ways lenders can support them is a must. Lenders need to remove the stigma associated with debt and encourage customers to communicate with them in an open and honest manner. Lenders should consider existing forbearance measures to ensure they are appropriate to meet consumer requirements during this unique time. These measures should be easily understandable and flexible, and their appropriateness carefully considered based on each set of circumstances and an affordability assessment.

Whilst we’re starting to see more positive news about moving back towards a semblance of normality, sadly the true economic toll of the pandemic is not yet known. What we do know, however, is that treating customers fairly and understanding their needs and circumstances is vital, to help them and you navigate these uncertain times. Not only is adapting debt collection a pragmatic approach, it’s also the right thing to do ethically. But by leveraging Open Banking, lenders now can take a proactive approach to helping to implement payment plans which are achievable for all parties, leading to better outcomes.

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Finance

Five things shaping Britain’s financial rulebooks after Brexit

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Five things shaping Britain's financial rulebooks after Brexit 3

By Huw Jones

LONDON (Reuters) – Britain is conducting a review of its financial rulebooks and policies to see how it can keep its 130 billion pound ($184 billion) finance sector competitive after Brexit left it largely cut off from the European Union.

The government is due to issue papers in the coming days outlining its approach to financial technology (fintech) and capital markets, while further down the line it’s expected to propose changes to the funds and insurance sectors.

Here are five things set to shape the City of London financial hub following its loss of access to the EU:

BIG BANG DEBATE

Britain’s finance ministry is reviewing financial regulation and insurance capital rules, with minister Rishi Sunak raising the prospect of a “Big Bang 2.0” to maintain the City’s competitiveness, a reference to liberalisation of trading in the 1980s.

But it’s unclear how far any deregulation could go given that Britain says it won’t undermine global standards.

UK Finance, a banking body, wants a formal remit for regulators to ditch rules that put them at a competitive disadvantage globally. Insurers want cuts in capital requirements to free up cash for green and long term investments.

But the Bank of England says the City must not become an “anything goes” financial centre, and that insurers hold the right amount of capital.

Cross-border firms want to avoid Britain diverging from international norms as this would add to compliance costs.

City veterans say Britain should focus on allowing firms to hire globally, and ensuring that regulators respond nimbly and proportionately to crypto-assets, sustainable finance, long-term investing and restructurings after COVID-19.

COPYING NEW YORK

London has fallen behind New York in attracting company flotations and a government-backed review of listing rules is likely to recommend allowing “dual class” shares and a lower “free float”, perhaps for a limited period.

Dual class shares are stocks in the same company with different voting rights, while “free float” refers to the proportion of a company’s shares that are publicly available.

The potential changes could attract more tech and fintech companies whose founders typically want to retain a large degree of control.

It could also recommend making it easier for special purpose acquisition companies (SPACs) – businesses that raise money on stock markets to buy other companies – an area in which New York has also dominated, with Amsterdam catching up fast.

UK asset managers warn that strong corporate governance standards could be diluted by tinkering with listing rules.

BEYOND SANDBOXES

Britain is home to one of the world’s biggest innovative fintech sectors, its “sandboxes” – which allow fintech firms to test new products on real consumers under regulatory supervision – copied across the world. But Brexit means Britain has to work harder to attract and retain fintechs as they will no longer have direct access to the world’s biggest trading area.

A government-backed review to buttress the sector is due to report back on Friday with recommendations that could include cutting red tape for fintechs that want to recruit staff from across the world, and make listing in Britain more attractive.

Other ideas could include helping fledgling fintech navigate government departments and regulators more easily, along with ways of boosting funding for start-ups.

FUNDS ARE THE FUTURE

Britain is reviewing how to make itself a more competitive place for listing investment funds, a core tool for bringing fresh capital into markets.

UK-based asset managers run many funds listed in the EU, but this global system of cross-border management known as delegation could be tightened up by the bloc.

Having more funds listed in Britain would also mean that the shares they hold would be traded in London. Billions of euros in trading euro shares have left the UK for Amsterdam since Brexit due to the bloc’s restrictions on where funds can trade shares.

THINK GLOBAL

As the City will get only limited access at best to the EU, industry officials say it makes more sense to focus on getting better access to other markets like Singapore, Hong Kong, Japan and the United States, while at the same time keeping the UK financial market open to the world, including the EU.

Negotiations between Britain and Switzerland for a “mutual recognition” deal in financial rules is the way to go, industry officials say. Better global access would also keep the City ahead of EU centres like Amsterdam, Paris and Frankfurt.

($1 = 0.7056 pounds)

(Reporting by Huw Jones. Editing by Mark Potter)

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