Money is a powerful motivator, and it’s among the top reasons many people have for getting a real estate license. But North Carolina real estate brokers are not compensated for their work like the average 9-to-5 worker.
It’s important to note here that in North Carolina, a licensed real estate agent is called a broker. The person at the brokerage who oversees the brokers (agents) is called a “broker-in-charge” or “managing broker” in North Carolina.
How do real estate brokers get paid?
Most real estate brokers get paid commission based upon the sale price of a property. The commissions of a real estate transaction are negotiable and tend to range anywhere from 1% all the way up to 10%.
Let’s use a 5% commission rate as an example. So for a $250,000 property, the 5% commission paid upon the closing of that property will be $12,500. That does not mean that the broker walks away with $12,500. The managing broker for whom the broker works will receive a portion of the commission.
The most common arrangement of payment between a broker-in-charge and a broker is the commission split. Depending on what has been agreed to when the broker-in-charge agreed to hold the broker’s license, a certain percentage of the commission is paid to the broker-in-charge and the remaining percentage to the broker. Assuming the traditional 50/50 commission split, each will receive a commission check of $6,250 at the closing of escrow on that one property.
Using the example sale and assuming only one property closes per month, a real estate broker is looking at making $75,000 a year. A real estate broker who is dedicated and in tune with the market in which he or she is working has a much greater income potential than commissions from one single closing per month. When you are dealing with commissions of this size, you are talking major increases in income. Even two closings per month could raise your annual income to $150,000.
How do real estate brokers-in-charge get paid?
As a North Carolina real estate broker-in-charge, commissions come even easier. By holding the real estate license of the brokers who work under you and maintaining their space in your offices to whatever degree you are contracted to do so, you will collect your part of the commission split not just from the one broker, but every broker under your brokerage. If you have five brokers working out of your office and each is closing just one deal per month, then as their broker-in-charge, you would be making $31,250 per month without ever showing a property.
There is plenty of income potential as a North Carolina real estate broker
Whether you are a broker or broker-in-charge, there is enormous potential for income generation that is only limited by your willingness to work at it.
As a broker, experience and extensive knowledge of the real estate market will make you an income you never thought possible. As a broker-in-charge, surrounding yourself with experienced and knowledgeable brokers can build a fortune.
Thinking about starting a real estate career?
Superior has helped more new agents pass the North Carolina real estate licensing exam on the first attempt than any other school in North Carolina. Attend one of our career nights, read the Superior Plan, and take our 75-hour pre-licensing course (North Carolina Real Estate Commission approved) to kick start your real estate career.