Agents earn 6 figures from one sale a year

The world of luxury real-estate brokerage isn't the same as what average buyers and sellers experience. Helicopters and haiku may be required.

By Teresa at MSN Real Estate Jan 28, 2013 3:05PM

If you ever watch the HGTV shows “Selling New York” or “Selling L.A.,” I am sure it has crossed your mind that you could live for a year – or more – on the commission the agent gets from selling just one of those properties.

 

Of course, you have to also calculate all the work the agent has to do to sell those units and the networking it requires to find he customers for homes that cost $10 million or more. In the field of luxury real estate, brokers and agents sometimes have all their eggs in one expensive basket.

 

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© Ron Chapple/Getty ImagesBroker Sami Hassoumi sold only one property last year – a $20 million co-op on New York City’s Upper East Side, The Wall Street Journal reports. He represented the buyer.

 

Assuming there was another agent representing the seller, and a 5% commission -- 4% to 6% is common in these transactions, though it’s all negotiable -- Hassoumi could have earned a $100,000 commission. Out of that fee would have to come any expenses, such as lunches with buyers, advertising, open houses, professional photos. If he didn’t own his own agency, he’d need to pay 10% to 50% of his earnings to the brokerage.

As a self-employed person, he’d also need to pay for his own health insurance, pay both the employer’s and employee’s share of Social Security self-employment tax, pay his own assistants and secretaries – so maybe he’d need to do two of these deals every year to equal an average corporate salary.

But in the world of elite agents, there are those who make an excellent living on two or three deals a year – though those deals don’t come easy. The WSJ’s Alyssa Abkowitz writes:

Marketing trophy homes often requires extraordinary tactics. Instead of hosting an open house, hiring a photographer and printing out an informational sheet with the home's dimensions and amenities, a broker may build an entire campaign around the property. It's not uncommon to name the property, hire multiple photographers to capture the home at different times of day, fly a helicopter over the land to get aerial views and enlist a copywriter to craft two or three different brochures. Leaflets may be mailed to previous clients; promotional books are reserved for the most serious buyers.

Shari Chase of Lake Tahoe, Nev., sold only three properties last year, including a $25.5 million estate. To sell that property, she paid a copywriter $20,000 to create brochures and write haikus about the estate. Another broker spent $45,000 on photography for a $49 million sale, down from the initial $135 million asking price.

Just snapping a few photos with a point-and-shoot camera, as one of my agents did, and putting the property in the multiple listing service isn’t quite how buying and selling work in the luxury world – though hiring a circus for an open house is not required.

 

The clients for multimillion-dollar properties often require special handling. In Sherman Oaks, Calif., a suburb of Los Angeles, agent Ben Salem takes clients looking for high-end properties up in a helicopter to preview homes.

 

"We want to treat them like royalty," Salem told The Los Angeles Times. "We meet them in a car, bring them to a red carpet and take them up for a tour to show them properties of interest."

 

 

 

 

 
20Comments
Jan 29, 2013 11:31AM
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KAREN4975.... The real estate agent didn't finance the house. It was the banker and the **** that bought a house they could afford. Obviously you don't know what your talking about. I'd say your somewhat retarded.
Jan 29, 2013 11:28AM
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Just delete the article!  Passing off information like it was fact yet the writer cannot even do the math.  Don't you have editors?

Jan 29, 2013 11:13AM
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Apparently real etate wriers can't do math either.  The REAL reason the housing market crashed is real estate agents talking buyers into houses they couldn't afford because agents couldn't do the math.
Jan 29, 2013 10:29AM
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Properties this expensive get greatly reduced commission rates, and agents don't get all of the commission, so the math isn't as terrible as everyone implies.

500K-800K split between the selling agent, the listing agent, and their agencies.

Jan 29, 2013 10:24AM
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Talking about bad (proof reading) **Of course, you have to also calculate all the work the agent has to do to sell those units and the networking it requires to find he customers for homes that cost $10 million or more.** Think it should say (requires to find "the" customers...but what do I know.  Can't proof read -  can't add, but probably makes more then most people with a job that REQUIRES that to be done...just a theory...

 

Don

Jan 29, 2013 10:13AM
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You might as well just take the article down, Teresa Mears - do your math!!! And if you did do the math correctly in your head but just mistakenly left out the extra zero in "$100K", then I'm not sure what planet you're living on....$500K, less expenses is more than enough to live off of for a year...and I live in Manhattan by myself.
Jan 29, 2013 10:08AM
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5% of 20mil is $1,000,000, so if Sami got half, that's $500,000, not $100,000.  You might want to invest in a calculator.
Jan 29, 2013 9:49AM
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These utter idiot "expert" internet authors can't even proof their own work, so nobody does and we get this phenomenal dumbing down of America. In this case they cite a 20 million dollar sale with the agent getting only a 100K commission. WTF? It actually would've been closer to a million and even if it wasn't an exclusive he'd still walk away with close to 500K.
Jan 29, 2013 9:44AM
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45 k for photos...come on!!! I was born at night but not last night!!!
Jan 29, 2013 9:44AM
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Disgusting amounts of money... and people wonder what is wrong with the world today. The upkeep alone per year is more than most dual income working homes make working combined 90 hrs a week 52 weeks a year.

Jan 29, 2013 9:43AM
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I've made less than $400 on one sale (short sale condo), and I've made $200K on one sale ($8M apartment complex). The crappy commission ones are always the hardest too.

Jan 29, 2013 9:26AM
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45000 for photos...pretty sure someone over-paid. 
Jan 29, 2013 9:09AM
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5% of $20 mil is $1,000,000...not $100,000. Meaning his half of that, less expenses and the brokerage's portion, is a very healthy income. One property a year could totally be enough.

 

Jan 29, 2013 9:06AM
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Unless my math is really bad doesn't 5% of $20M equal $1M....... not $100K? Kind of changes her article a little. Shouldn't someone writing about real estate be able to do real estate math (or even basic math)????
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