The Cost of Being a Real Estate Agent [Infographic]
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- Gas & Maintenance $0.21 /mile AAA estimate for a medium-sized sedan. It may not sound like much, but many Realtors log more than 20,000 miles a yeamiles a year. Auto Insurance $1,020 /year AAA estimate for full coverage on a AAA estimate for full coverage on a medium-sized sedan. The good news: many auto insurance companies offer discounts through the NAR. For agents looking to stay relevant and knowledgeable in a changing industry, competition comes at a cost. EDUCATION & ENRICHMENT Average vehicle expense for Realtors in 2012, according to the NAR $1,790 /year Some less obvious expenses can take a significant toll on a real estate agent’s bottom line. OTHER COSTS Real estate agents put an estimated 3.6 billion miles on their cars each year, previewing properties and shuttling clients from house to house. TRANSPORTATION Getting the word out about your real estate business is one of the most difficult aspects of the job. It can also be one of the most expensive, particularly for new agents trying to grow their customer base. 31% of real estate agents spend over $1000 a year on online marketing efforts. 17% of agents employ a marketing assistant. MARKETING & ADVERTISING Real Estate Website $100-500 /month Whether itWhether it’s an IDX website with listings, a real estate blog, or both, a marketing website includes many smaller costs, including development and design, hosting, and SEhosting, and SEO. 70% of agents say they’ve had a website for at least five years. Online Advertising $100-500 /month PPay-per-click ads, Internet lead generation, social media, premium placement on big real estate sites, and other online sources now make up over 55% of agents’ total ad spend.total ad spend. Print Advertising $100-500 /month YYard signs, mailers, billboards, newspapers, and rack publications are just a few of the ways agents use print to get the word out. 40% of agents still use direct mail marketing. Continuing Education $50-100 /year Each state real estate Each state real estate authority requires agents to take anywhere from 10-30 credit hours of continuing education every licensure cycle (typically 2-4 years). Conferences $50-1000 /each Conferences offer an Conferences offer an opportunity to network with other professionals and keep up with the latest trends in real estate technology. Additional Courses & Designations $100-500 /course Supplementary Supplementary coursework adds expertise in niche markets and emerging technologies to raise your profile among local competitors. Income Taxes $VARIES YYour tax burden will vary based not just on your income, but also your location. Californians, for instance, bear a top income tax rate of 13.3%. Health Insurance $50-500 /month The the NAR offers basic The the NAR offers basic coverage with its Realtors Core Health Insurance program, but those looking for better options to insure their families must contend with expensive individual with expensive individual policies. Community Outreach $50-100 /course 13% of agents (20% of 13% of agents (20% of those earning more than $100k) support the community through sponsorships like Little League, high school plays, and their local church.church. 49% of real estate agents spend over $500 a year on education and training. 16% of agents have worked with a real estate coach. Create beautiful real estate WEBSITES THAT WORK INFOGRAPHIC BY PLACESTER Built with indexable IDX for better online marketing, local search, and SEO. For expert help, visit placester.com Sources https://placester.com/real-estate-marketing-academy/life-as-an-agent-survey-results/ http://www.realtor.org/reports/member-profile http://www.spiceworks.com/news/press-release/2013/05-29/ http://www.ocregister.com/lansner/div-446030-strong-year.html http://exchange.aaa.com/wp-content/uploads/2013/04/Your-Driving-Costs-2013.pdf hhttp://www.slideshare.net/gordonborrell/borrell-2012-real-estate-outlook http://activerain.com/real-estate-marketing Attributions Billboard designed by Casey Fluster from the Noun Project (http://thenounproject.com/term/billboard/19719/) Book designed by Diego Naive from the Noun Project (http://thenounproject.com/term/book/15474/) Building designed by Martin Delin from the Noun Project (http://thenounproject.com/term/building/5747/) Building designed by Martin Delin from the Noun Project (http://thenounproject.com/term/building/5747/) Car designed by Olivier Guin from the Noun Project (http://thenounproject.com/term/car/4699/) CCash designed by Tony Michiels from the Noun Project (http://thenounproject.com/term/cash/38038/) Chalkboard designed by Asier Bilbo from the Noun Project (http://thenounproject.com/term/chalkboard/26819/) Check designed by Brandon Manning from the Noun Project (http://thenounproject.com/term/check/7718/) Church designed by Alex Fuller from the Noun Project (http://thenounproject.com/term/church/27686/) Conference designed by Desbenoit from the Noun Project (http://thenounproject.com/term/conference/16379/) First Aid designed by AnsteyDesign from the Noun Project (http://thenounproject.com/term/first-aid/20146/) GGavel designed by Diego Naive from the Noun Project (http://thenounproject.com/term/gavel/23091/) Megaphone designed by Christopher Reyes from the Noun Project (http://thenounproject.com/term/megaphone/11770/) Megaphone designed by Mister Pixel from the Noun Project (http://thenounproject.com/term/megaphone/35635/) Outlet designed by Korokoro from the Noun Project (http://thenounproject.com/term/outlet/18289/) Propane Tank designed by Ambar Bhusari from the Noun Project (http://thenounproject.com/term/propane-tank/8486/) Train designed by Jamison Wieser from the Noun Project (http://thenounproject.com/term/train/1707/) WWoman designed by Lemon Liu from the Noun Project (http://thenounproject.com/term/woman/8215/) Globe designed by Juan Garces from the Noun Project (http://thenounproject.com/term/globe/1305/) Cursor designed by Renato Silva from the Noun Project (http://thenounproject.com/term/cursor/19119/) Newspaper designed by John Caserta from the Noun Project (http://thenounproject.com/term/newspaper/1233/) Desk Fees $25-$750 /month In eIn exchange for keeping all or most of your sales commission, some brokers charge a flat fee to use their desk space and branding. Some brokers may also charge transaction fees on some or all of an agent’s deals. Commission Splits 30-85% /transaction While While 50/50 deals are common, commission splits vary widely depending on factors like experience and performance. Office Supplies $20 /month PPaper, ink, and business cards are just a few of the office supplies many agents must furnish. Utilities $75-150 /month Software $20-250 /month Broadband internet and smartphone services are essential for agents--and notoriously expensive. From contact management, to market analysis tools, to cloud storage, software costs can pile up for agents. Most real estate agents align themselves with a broker or firm, and must pay for the privilege. While brokers have a variety of ways to determine this cost, two compensation models dominate the conversation. BROKER COSTS Brokers cover some office expenses, but agents are often on their own for the rest.. Since many agents work outside the office, personal computers, mobile phones, and home internet services may also be considered business expenses. increase in IT budget for small and midsize businesses worldwide, January-June 201319% OPERATION COSTS Licenses & Permits $100-500 /year Initial sales license and renewal fees vary widely from state to state. Realtor Association Dues +$120 /year While NAR membership While NAR membership starts at $120, state and local real estate boards add to this cost. MLS Fees $25-$100 /month Access to real estate Access to real estate data can come at a high price, and may include a startup fee. Like any profession, real estate is highly regulated. There are licenses to earn and renew, organizations to join, and a variety of other official hoops agents must jump through. OFFICIAL & PROFESSIONAL COSTS Still, one number can’t tell the full story. That’s why we’ve broken down all the expenses agents face. From ads to auto insurance, conferences to commission splits, here are the true costs of doing business as a real estate agent. When people talk about the real estate profession, they tend to focus on how much money agents and brokers can make. But have you ever considered how much it costs? TALK IS CHEAP REAL ESTATE, NOT SO MUCH A PLACESTER INFOGRAPHIC Real Estate Agent THE COST OF BEING A Realtors’ total business expenses are increasing rapidly. To ta l C os ts 4800 5000 5200 4600 4200 4400 4000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2011 $4,520 2012 $4,900 $ $ $ $ $ $ $ $