I smile every time I see a real estate agent bragging that they’re a Million Dollar Producer while selling Meridian Idaho homes.
For way too long, real estate agents have obsessed over their “sales volume”, as though it was a big deal to sell a million dollars’ worth of homes.
Last time I checked, Albertson’s wasn’t accepting real estate sales volume at the checkout counter.
They wanted real money!
Fact is, membership in the Million Dollar Club is real estate’s equivalent of qualifying for food stamps.
Most real estate transactions include a listing agent and a buyer’s agent.
If the transaction includes a 6% commission, that means each agent will receive a commission equal to 3% of the sales price.
One million in sales X 3% = $30,000 gross commission.
But, that’s not the end of it.
That $30,000 gross commission is then typically split with the agent’s broker.
It’s not uncommon for some agents to give up 40-50% of that $30,000 commission to their broker.
Let’s be generous and say that the agent is on a 60/40 split with their broker.
That results in $18,000 for the agent.
Then, there are agent expenses to consider.
Expenses like a car payment, gas, auto insurance, annual dues, errors and omissions insurance, MLS fees, office fees, transaction fees, signs, websites, cell phone, etc.
The bottom line?
An agent who closes only one million in sales is living way below U.S. the poverty level.
All of which is why real estate agents should remove those embarrassing Million Dollar Club license frames from their cars.
And, while they’re at it, focus on what really matters ~ providing good service to their clients!