Are you considering becoming a real estate agent in Georgia? If so, you may be wondering about the commission. How much will you make on each sale and what can you expect to earn per year? Here's a closer look so you can decide if the real estate business in Georgia is right for you.
How Much Commission Will You Make as a Real Estate Agent in Georgia?
First, there is no number that you will always make as a real estate agent in Georgia. Commission rates are not standardized, and they can't be, according to antitrust laws. Instead, they are negotiable. However, a recent survey of Georgia real estate agents found that the average real estate commission is 5.75%. According to Zillow, the average home cost in Georgia is $232,144, so the average commission payout would be around $13,350. But, keep in mind, that amount is split multiple ways, so it won't all go in your pocket.
How Are Real Estate Commissions Split in Georgia?
Real estate commissions are traditionally split four ways. The listing agent and their broker each get a percentage. Then, the buying agent and their broker each get a percentage. Like many states, in Georgia, real estate agents can't directly receive commissions from the sale of a property. Instead, your broker will get paid and then they will pay you according to your agreement.
Here's an example.
If you found a buyer for a home that costs $250,000 and the commission in the listing agreement was 6%, the payout would be $15,000. How the $15,000 is divided up depends on the agreements that have been negotiated. If your broker and the listing agent agree on a 50/50 split, each party would get $7,500. Then, if you and your broker agree on a 50/50 split, you each would get $3,750. Likewise for the listing agent and their broker.
- Home cost: $250,000
- Total commission: 6%, $15,000
- Listing agent: 1.5%, $3,750
- Listing agent's broker: 1.5%, $3,750
- Buying agent: 1.5%, $3,750
- Buying agent's broker: 1.5%, $3,750
As you become a more established real estate agent, you can often negotiate a split that leans more in your favor, such as you receiving 70% and your brokerage receiving 30%. But, in the beginning, they are helping you get clients, so the split is often more modest.
Other Commission Models
You may run into variants of the traditional commission model. For example, some brokers offer a flat payment to agents for each home sold. Being so, it's important to choose your broker carefully to ensure you get the best deal.
Further, some companies are mixing up the real estate industry and undercutting the traditional model. RedFin, for example, offers homeowners the option to list their property for a fee of just 1.5%. Instead of paying the listing agent and their broker, sellers are only paying one party at about half the cost. Further, if buyers use RedFin, RedFin contributes part of the commission it earns to the buyer's closing costs. Sounds great, but many customers file complaints, meaning the discount could come at a cost.
Become a Real Estate Agent in Georgia
Becoming a real estate agent in Georgia can be a profitable career. According to Indeed, the average annual income is about $94,000 per year, with newbies making closer to $84,000 in their first two years. Plus, it's a career path with a low barrier to entry. You don't have to spend years in college. In fact, as long as you are 18 and have your high school diploma (or the equivalent), you can take the 75 hours of required pre-licensing education online with an approved school like Aceable Agent.
Ready to get started? Enroll in your courses today!