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Just closed my first sale

BDM, 25k for one transaction isn't too bad. Roughly speaking, it means he's only got to sell five or six houses to have a comfortable living in a year. Now the trick is, how long will it take him to make another transaction, that'll tell the story.
 
^^Yeah, but he has to split the commission with his "house", probably 60/40, so he'll really pocket around $15,000...before taxes, of course. So he'll have to sell a LOT of very expensive houses to make a comfortable living. I don't really know the RE market in Vermont, but Cali is the most overpriced state, and you can routinely get single homes in the range of half a million. Some of the condos I've been looking at are around $400,000.

Of course, commissions are higher on lower priced homes, but even if you're a fully-licensed broker, you'll be making 6%, tops (unless you're both the buyer and the seller's broker, of course). That means on a $400,000 home you'll work 7 days a week to get it sold, and pocket around $24k. However, it seems our resident garden gnome is a salesman, which means the .75% is about right. That means a sale like the one I described will gross a whopping $3,000...which he'll have to split 60/40 with his "house".

And don't even get me started on the whole "independent contractor" aspect vis-a-vis income taxes.

The bottom line is, you gotta sell a helluva lot more than 6-7 houses a year if you want to make any money.
 
Big Dick McGee said:
^^Yeah, but he has to split the commission with his "house", probably 60/40, so he'll really pocket around $15,000...before taxes, of course. So he'll have to sell a LOT of very expensive houses to make a comfortable living. I don't really know the RE market in Vermont, but Cali is the most overpriced state, and you can routinely get single homes in the range of half a million. Some of the condos I've been looking at are around $400,000.

Of course, commissions are higher on lower priced homes, but even if you're a fully-licensed broker, you'll be making 6%, tops (unless you're both the buyer and the seller's broker, of course). That means on a $400,000 home you'll work 7 days a week to get it sold, and pocket around $24k. However, it seems our resident garden gnome is a salesman, which means the .75% is about right. That means a sale like the one I described will gross a whopping $3,000...which he'll have to split 60/40 with his "house".

And don't even get me started on the whole "independent contractor" aspect vis-a-vis income taxes.

The bottom line is, you gotta sell a helluva lot more than 6-7 houses a year if you want to make any money.
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Not trying to deflect, but a point I noticed: Last night he asked up in Questions what 1.5% of 3.5 million, which I glibbly commented 'who cares' to. So I'd say the .75 probably IS his share.

That said, you're still right on the lower end of the scale, but as I said, how long it takes him to make his next sale will tell how well he'll probably do.
 
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