I recently completed Agents representative course to work as a real estate sales agent and looking for job now. I had few interviews and all the Estate agents interviewed me only offers commission based employment. I think it is illegal as what we been told at the class. but there is no other way to get into the job market. What should I do? any proper suggestions from OZ bargainers would be appreciated. Thanks.
Real Estate Sales Job Only Commission Based, Is It Legal?
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Thanks for the detailed response. Appreciate that.
But I am new to the industry as just got my certificate 2 weeks ago and they say that we will make money from you and will give back the part of that earning.Looks dodgy to me
Had tons of offers like that when I entered the RE industry. Stay away from it. I eventually joined as a Property Manager for one of the companies. Had a base pay plus commissions on any new rental business brought in.
i found it hard to work as a property management though
with auction clearance and the crazy property markets in Sydney, its better with commissions! u'll make more that way than a salary
I see ur in Melbourne, hows the property market there
still think its worth it, depends on how much the commission is calculated I guessits good in Melbourne as busy but learning process should be paid as per the law. but looks I don't have any choice.
hold on
if you did the basic sales certification, didnt they already explain it all to you?
the high flyers all run commissions only, usually 50/50 or so but i can see how if it was 80/20 in favour of the company it would be bad
also property management isnt sales
Its an entry level course which is must to do before someone can hire you.You can do either property management or sales or business brokering. I don't want to go towards property management though.
the course should have explained EVERYTHING to you
Property management is a solid field, its a week by week pay and its really just like a normal job but obviously growth is limited
Sales is where the sky is the limit but its only for professionals who can:
A. convinced owners to sell their property thru you (exclusive contract)
B. sell said property
if you cant do these two, you should do property management
ie. the sums are pretty clear
you need to sell one avg. unit per month to be viable
$500,000 unit @ 3.5% commission = $17,500
split 50/50 = $8,750 before tax
can you do that?
@tonyjzx: in Qld standard REIQ commission is:-
add $18k
then divide by 40
then add 10% GST
(never could understand how GST can be added but anyway)So it's roughly 1/40 of sale price. This is usually split with agency either 40/60 50/50 or something similar.
Every single agent we know works on commission only. If they pay you a retainer that either means you get far less commission or you'll be doing other things as well, like property management etc.
No one is going to pay you anything unless you sell !!!
Very dog eat dog, even in same office. Have been there done that, but rewards can be substantial, as long as you don't mind working all weekend & 8 days a week.
(most open for inspections are on Sat & then spend next few days following up potential purchasers)
@tonyjzx: the commission rate looks pretty high what you talking about.. we been told in the class that its around 2.5% of the house price which will be charged by the agency and agent will get part of it.
Every single RE agent I see drives a black European car, without exception. So based on that, however you get paid, I'm sure it's worthwhile.
Sorry for the lack of helpfulness in my response.
Cost of doing business, not an indication of income.
McDonalds at Circular Quay is 60 seconds walk from the Opera House, doesn't mean the kids working behind the counter are millionaires.
That said, the top real estate agents are some of the best paid employees in Australia (but the worst don't make much at all).
I know a couple of part time sales agents who basically work Saturdays and might make a sale twice a year. IT doesn't take a much to make that a lean year.Codb is actually a reflection of income, unless you in thebusiness of losing money.
Nearly all businesses increase spending in good times and tighten the hatches in the bad times.
Cost of doing business is the investment you must make to be in business.
For McDonalds, it is a fully kitted out restaurant. For a person selling handcrafted Xmas ornaments it might be just and Etsy store.
For a real estate agent, it is a nice, newish car. Too many people would cringe if an agent turned up in a 15 yro Toyota.
The end result is agents lease a modern car. Successful ones might have nicer.^This.
From REIQ course I attended, the tips were, your car is your office. You need to make sure its always tidy and presentable. You might be always on the road and need a reliable vehicle for it. Or you might have to take one of your clients to show a property/show surrounding areas/coffee for a business intro chat. It is part of the cost to maintain your image as a successful real estate agent.If you are selling your house and the first agent comes in a 15 year old Camry with a t-shirt and jeans with oil stains, and the other guy comes in an Audi wearing business suit, rest of the factors staying same, who would you prefer to help you sell your house?
It is a very competitive industry. I was there for 6+ months before I ran back to I.T
Almost anyone can buy a car on finance, especially with todays interest rates. Doesn't mean you can afford it.
agents have the benefit of being able to 100% tax deduct a car inc. interest so lease that Audi A6 you've always wanted!
you have to earn income to offset it.
A very simple example … say your tax rate was 50% of everything you earned. Effectively, you paying 50% of actual cost to lease car.
Leasing involves "borrowing money" says it's at 5% (often higher for cars). That means you're actual paying more than 50% of the actual cost of that car.
Nothing is free unless you're pay 100% of your income in tax.
So if you can afford a $25k, you can probably without forking out more dough afford a $45-$50k car, BUT & it's a big car, if I see an agent driving a big expensive car, I might think he/she is making too much money & then will beat them down on commission.
Everything is negotiable.
The easiest the agents think your property might be to sell, probably the easier it might be to negotiate the commission down. Most agents will say they don't negotiate commissions but many do.
& it's not always the best ones who don't.
That is true, but I have a feeling, and insight, that they can afford it.
& how on earth would you know that ?
Feeling ? Have you been to a psychic lately ?
Seriously.
No agent is going to tell you honesty that he/she has sold jack all. He will tell you he/she's sold heaps, but they can be caught out then.
Agree its good $$$ in there but once you are good at it…not from 1st year you can make big $$$…u need patience atleast that is what i have been told…
It's my understanding that a basic wage, and nothing else, is required to be paid. Your commission arrangement works so that commission is not on top of that wage but, in essence, that wage comes out of your commission.
It costs the employing agent a certain amount in the thousands per year to set you up to sell, your desk's share of the office rental, desk, office phone, advertising your listings, reception, office consumables, etc., etc. If they don't think that you have what it takes to earn for you and for them more than that basic wage and services, meaning sales commissions, then you are a waste of space for them. On top of that, you will have to provide your own car, phone and be presentable, prepared to be available 25 hours a day, 8 days a week. Man, it's sink or swim.
The only way you can get a start on the bottom rung of real estate sales is via the property management introduction route advised above, or via a track record as an achieving, self-starting salesman in another field, with some contacts already. Or have a wealthy relative to set you up on your own.
Set up your own business, charging a reasonable rate instead of 10s of 1000s, and keep it all for yourself.
I have a friend who renewed her licence at 45 after 20 years out of the business
She has worked her way through more than 20 agencies, mainly because she thought RE was all about long lunches, ducking out to get her hair done and go shoe shopping when she was 'letterboxing' and wondered why she wasn't making $10k a week without any sales.Oh - and to the OP… with any professional endeavour, your presentation is paramount. The english you have used in your posts is quite poor, and suggests you are not a native english speaker. I would encourage you to have anything you put in writing proof read before you deliver it to a client
I am going to put it out there - you don't seem to be well informed about this pretty big step
The course you have done doesn't sound much good eitherEssentially you are starting your own business here and stand to lose a lot of money - both real expenditure and debt (e.g. for car)
Plus opportunity cost of your alternative
Consider taking some caution before leaping inyep, this guy isnt ready if he cant even get this basic stuff right.
I dont know what state he's in but the NSW course is 110% clear on this and if you passed the course and still dont know this stuff you didnt pay attention.
before you blame someone watch out and go to the market. The reason I posted this discussion is to get the opinion of the real world people who has gone through the actual process. We have been told that in the class that base pay/retainer is required but I went through the actual interview process and all I got is the commission based role. So please don't blame someone if you haven't gone out and look for the real estate sales job.
https://www.ozbargain.com.au/user/10737 Mate, I know what I am going through as already gone through five or six interviews and only offer I get is the commission based.
Dial in Real Estate and it seems legal: http://www.fairwork.gov.au/pay/minimum-wages/piece-rates-and…
However, not for brand new salespeople.
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Commission only payments
An employee working in property sales can agree with their employer to be paid on a commission only basis if the employee meets all the following criteria:
has a real estate agent’s licence or is registered or permitted to do the work of a real estate salesperson under real estate law
has been working as a real estate salesperson or was an active licensed real estate agent for at least a total of 12 months in the last 5 years
is at least 21 years old
is not a casual, a junior, a property sales associate or a trainee
can demonstrate that they have achieved the minimum income threshold (unless they have operated their own real estate business within the last 5 years).
Any commission only payment arrangement needs to be in writing and include how the commission will be calculated and paid. The employer has to keep a copy of the agreement, and give a copy to the employee.
The commission arrangement can be changed if the employer and employee agree to it in writing.
A commission only employee has to be:
told in writing what commission was earned when it is paid
paid at least the minimum commission only rate for each sale or lease transaction they are responsible for (unless the commission is split between 2 or more responsible employees).
The minimum commission only rate is calculated as 35% of the employer’s net commission. The employer’s net commission is 90% or more of the employer’s gross commission (the commission an employer gets for sales or leasing transactions less GST and conjunctional agent fees).
If an employer agrees to pay more than the minimum commission only rate, how the additional commission is to be calculated must be agreed in writing, with a signed copy of the agreement provided to the employee.
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