Connect with us

Finance

How much do real estate agents make?

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

High-yield bonds will help, not hinder, businesses’ recovery

High-yield bonds will help, not hinder, businesses’ recovery 1

By Jesse Chenard CEO of fintech MonetaGo,

One of the best indicators of stock market growth is high-yield bonds. The junk bond market is more important than ever as we recover from coronavirus – allowing companies to raise vitally needed capital and giving investors the opportunity for returns that will fuel speculation and drive growth across the whole economy. Junk bonds, or ‘high-yields’ to give them a less derogatory name, will drive the recovery just as surely as the rebounding stock market will.

Companies who have suffered with low liquidity under the pandemic need to raise capital and return to viability. According to J.P. Morgan Chase, bond-issuance has already reached $238 billion – almost double this time last year. It is clear that high-yield bonds are going to drive economic recovery and allow viable, but cash-strapped, companies to regain losses caused by Covid-19.

Companies striving to boost their capital, improve liquidity and rebuild after the pandemic need systems around issuance to be quick, effective and secure. Yet, the issuance process remains slow, costly and encumbered by legacy systems.

Avanade’s research found that up to 80% of IT budgets are allocated to keeping legacy systems running. Technology can help reform the process and give companies the funds they so badly need.

According to Bloomberg, global corporate bond issuance is on track to reach a historical high in 2020, as total capital raised neared $6.4 trillion (June)— already 71% of 2019’s total.

But the process of issuing bonds is unbelievably slow and largely manual. It takes an average of 30 stages with human intervention at each point, including physical paperwork and contact between multiple parties and intermediaries.

The fact that so many of these processes are still multi-step and using people and paper is archaic and inefficient in normal market conditions.

During the lockdown, it looks positively stone-age. And then there is the risk of data leakage and security, which are horribly compromised by existing processes. Two years ago, I visited Credit Suisse’s office on Madison Avenue where they told me that they send 20,000 to 30,000 faxes a day to carry out activities that could be very easily automated and digitized: a scary thought from a data security perspective.

It seems odd that in a world where we are used to securely accessing our personal finances at the click of a button, the same cannot be true for business finance.

This is a massive, liquid market. It needs modernizing. Add to that the fact that volumes have ballooned as crisis hit firms work to raise working capital and return to viability. That process should be entirely digitized and speeded up. Companies recovering from the pandemic deserve better than outdated, unsecure systems.

There is no question that technology is the key here. There are solutions to digitize the entire process, allowing businesses to greatly reduce their time to market and their banks to provide a vastly improved service to their corporate customers.

When normal ways of working are disrupted, it brings to light the inefficiencies in document workflows that cost businesses thousands of dollars in fraud each year, not to mention the other cost of lagging behind due to outdated processes.

There is now an opportunity to take the lessons learned from the pandemic and digitize processes that have shown they need it. Covid has forced financial services to digitize in many ways but the high-yield bond market is lagging behind. We need to bring this crucial sector up to speed. Companies deserve fast, efficient and secure issuance systems to stimulate their recovery and kick start the global economy.

Continue Reading

Finance

Finance leaders must act against increasing fraud

Finance leaders must act against increasing fraud 2

By David Thorley, Director of Customer Development, FISCAL Technologies

The COVID-19 pandemic has resulted in a whole host of increased pressures on both business and individuals, worsening issues and vulnerabilities that were already present, as well as shining a light on new issues, never witnessed before. With this in mind, retaining and protecting cash has never been more important and therefore the role of accounts payable and the procure-to-pay function are crucial. These functions need to work together and do so proactively in order to succeed in the current climate.

It is also key that AP teams have all the right financial controls in place to minimise errors, maximise visibility of transactions, and streamline processes – especially with so many people now working from home and the various compliance challenges this creates. In essence, it is about taking a more forensic approach to AP activities.

According to fraud experts, each company has around a one in three chance of experiencing internal fraud this year, with enterprise organisations averaging losses of $1⁄2m[1]. These attacks typically claim payments which are under the financial risk review threshold, hiding within the hundreds of small invoice transactions until found by AP Audit software or internal audit routines.

Finance ERP and P2P systems – often described as the heart and lungs of a company – have a complex relationship and are known to have vulnerabilities, opening them to fraud. This is especially true in enterprise organisations where the adoption of artificial intelligence (AI), complex system integration and automation delivers a touchless-AP process, but may lack in the controls of traditional processes.

Additionally, centralisation or de-centralisation of the P2P function and systems, acquisition or mergers also creates a higher vulnerability to duplicates, errors and fraud. When systems are being configured and resources are stretched, errors and omissions occur, processes take time to adapt and this allows sophisticated fraudsters to target these types of transformation projects.

Missed historical data creating risk

As migration projects typically copy only open transactions to the new system – historical transactions seen as being of little value – transaction history can be lost. Spotting irregularities relies on comparing transactions with historical data so that the validation of duplicate payments is hindered.

During ERP migrations the Master Supplier File (MSF) is frequently left untouched and copied in its entirety from the old to the new system. This creates heightened risks as supplier reference changes in the new ERP’s MSF make historical look-ups impossible and the opportunity to remove unused, out-of-date and duplicate suppliers – a hotbed for fraud – is removed.

Particularly at a time like right now, it’s crucial that organisations are able to take action in recovering missed payment errors.

Internal planned attacks

Over the past few years, there has been no shortage of stories about internal company fraud or senior finance professionals being tried in court for finance fraud. While only a small proportion of these incidences become public knowledge, as organisations fight to keep reputational damage at bay, it’s essential that companies place finance fraud high up on the corporate radar in order to protect against these threats.

According to the KPMG Fraud Barometer, there was a six-fold increase in the number of alleged procurement frauds appearing in court in 2019, usually involving fake invoices. Six cases worth over £16 million appeared in court in 2019 compared to £2.9 million in 2018.

The individuals and groups who are deceiving businesses to gain payments, usually gain some inside knowledge of the processes or systems to enable them to set up fraudulent suppliers and divert funds to their accounts. They are sophisticated and plan their attacks.

The biggest risk factor when it comes to ERP fraud is allowing users to access parts of the system that they shouldn’t be able to see, thereby enabling them to commit fraud in a variety of ways.

The most common type is the dummy company fraud, where a user sets up a false supplier, processes fictitious orders and invoices, and pays for goods or services that are never received. This is surprisingly easy to perform for a user with a little too much access. But there are many other forms of deception, including supplier bank account changes, inventory manipulation and unauthorised changes to payroll data. Proper control measures can mitigate these vulnerabilities to a large extent.

Nobody wants to believe that they are at risk of fraud, that their processes, systems and governance cannot safeguard their profits, however, invoice fraud is becoming a lucrative industry. Today’s finance leaders need help to keep ahead of the threat in order to protect and retain cash – the number one priority.

[1] https://www.qsoftware.com/fraud-prevention-and-detection/erp-fraud-prevention-key-measures/

Continue Reading

Finance

The UK Property recovery has begun

The UK Property recovery has begun 3

By Jamie Johnson is the CEO of FJP Investment,

The UK property sector will be integral to the country’s economic recovery from the direct and indirect effects of COVID-19. The Government certainly believes as much, with Chancellor Rishi Sunak implementing a series of sweeping changes to support property transactions amidst the pandemic. Most recently, on  July 6th, 2020, it was announced that the first £500,000 of all property sales are now entirely exempt from Stamp Duty Land Tax (SDLT); including buy-to-let properties and second homes.

This attempt at boosting stimulus in the market is understandable. The real estate market is a key driver of national productivity and a big attractor of foreign investment to the UK. Thankfully for the Government, this policy has already been shown to be going some way in unlocking the stagnant demand for property that has been held back by COVID-19 uncertainty.

The boost the market needed

Mere weeks after this tax break was introduced, property journalists were already reporting a mini-property market boom. The property listing site Rightmove recorded an incredible 75% year-on-year increase for the month of July and a 2.4% rise in the asking prices of new properties on the website when compared to March levels pre-lockdown.

Whilst it is still too early to gauge how actual transaction numbers have been affected, this is a huge indicator that the Government’s policy has, thus far, been a success. After months of property price decline and housing market inactivity due to contagion fears surrounding COVID-19, the slump has finally ended, and buyers now feel confident enough to close on purchases once again.

But this demand will not be spread across the UK entirely evenly, so it’s worth examining how the continued presence of COVID-19 in our lives is shifting priorities in the minds of prospective buyers.

Stable demand, popularity shifting

With the working from home revolution seeming like it’s here to stay, it’s understandable that many of the working professionals who have found themselves having to turn their living spaces into work spaces may seek larger properties further from their employer’s traditional office space.

Jamie Johnson

Jamie Johnson

The aforementioned Rightmove figures support this claim. The rise in interest of London properties was just 0.5%, far behind the national average. This would make a change from the traditionally London-focused drive of the nation’s housing market; especially if we consider that this change in buyer sentiment may spur investors to look to places other  than the capital when deciding where to invest in new high-end developments in the future.

Sunny skies ahead

This imbuing of market activity is likely to push up house prices for the foreseeable future. This would certainty follow expert’s forecasts, as global estate agent Savills recently stood by their prediction of 15% general house price growth in the UK by 2024. They cited the inevitable return of the buyer demand we witnessed in January 2020 once the novel coronavirus was in retreat; and it largely seems like, in conjunction with the Government SDLT holiday, this is exactly what’s happening.

FJP Investment commissioned research earlier this year which supports this projection. We found that 43% of property investors weren’t planning on making any financial decisions until COVID-19 had been effectively contained. With the virus now in retreat, it seems like confidence has risen. As a result, both investors and buyers are returning to the market in droves. Nationwide’s House Price Index for July, for example, showed that house prices have increased by 1.7% month-on-month.

Of course, I must taper this optimism with the knowledge that a second spike in cases or virus mutation could well set this recovery off-course. In short, there are still plenty of unknowns to content with.

However, as it currently stands, it seems as through the Government’s SDLT tax break will successfully encourage buyers (and sellers) to push up housing market activity for the foreseeable future. I look forward to being to a part of the UK property renewal in the coming months, and for the housing sector to provide the impetus for a strong UK economic recovery more generally.

Continue Reading

Call For Entries

Global Banking and Finance Review Awards Nominations 2020
2020 Global Banking & Finance Awards now open. Click Here

Latest Articles

The ultimate tech guide to remote working for the casual worker   4 The ultimate tech guide to remote working for the casual worker   5
Business4 hours ago

The ultimate tech guide to remote working for the casual worker  

By Paul Routledge D-Link Country Manager Like many others, you may have grabbed your laptop in the middle of March...

Safeguarding international logistics arrangements during the coronavirus crisis 6 Safeguarding international logistics arrangements during the coronavirus crisis 7
Business4 hours ago

Safeguarding international logistics arrangements during the coronavirus crisis

By Adam Ewart, CEO and Founder of Send My Bag It has certainly been a whirlwind couple of months. The coronavirus...

The Future of Finance Teams: Digitally Transformed 8 The Future of Finance Teams: Digitally Transformed 9
Top Stories4 hours ago

The Future of Finance Teams: Digitally Transformed

By Simon Bull, Sales Operations & Business Development Manager at Aqilla Finance teams haven’t always been at the forefront of...

High-yield bonds will help, not hinder, businesses’ recovery 10 High-yield bonds will help, not hinder, businesses’ recovery 11
Finance4 hours ago

High-yield bonds will help, not hinder, businesses’ recovery

By Jesse Chenard CEO of fintech MonetaGo, One of the best indicators of stock market growth is high-yield bonds. The junk...

A holistic view of organisational security 12 A holistic view of organisational security 13
Business4 hours ago

A holistic view of organisational security

By James Ward, Senior Cyber Consultant at MASS The finance sector is typically more developed than others when it comes...

IDnow: Putting a new face on identity verification 14 IDnow: Putting a new face on identity verification 15
Technology5 hours ago

IDnow: Putting a new face on identity verification

By Charlie Roberts, Head of Business Development UK&I at IDnow Munich headquartered IDnow is an identity verification provider which uses AI-based...

Finance leaders must act against increasing fraud 16 Finance leaders must act against increasing fraud 17
Finance5 hours ago

Finance leaders must act against increasing fraud

By David Thorley, Director of Customer Development, FISCAL Technologies The COVID-19 pandemic has resulted in a whole host of increased...

NextGen Communications – the future of customer experience 18 NextGen Communications – the future of customer experience 19
Technology5 hours ago

NextGen Communications – the future of customer experience

By Andrew Beatty, Head of Global Next Generation Banking at FIS As software development increasingly resembles push updates in services,...

The UK Property recovery has begun 20 The UK Property recovery has begun 21
Finance8 hours ago

The UK Property recovery has begun

By Jamie Johnson is the CEO of FJP Investment, The UK property sector will be integral to the country’s economic...

The Derry Group launches new employee engagement and communications app 22 The Derry Group launches new employee engagement and communications app 23
Technology13 hours ago

The Derry Group launches new employee engagement and communications app

The Derry Group, a one stop shop for the distribution, storage and order picking of chilled and frozen products has...