Most of the people want to know that what is Reverse Mortgage and how does it work. Now you can get your answers about the reverse mortgage pros and cons and other information here.
What is Reverse Mortgage?
The Reverse Mortgage is a kind of loan or mortgage where a homeowner can borrow the money from the lender against the value of his house. There will be no repayments of the principal or interest, is required until the mortgagor dies and sells the house.
A reverse mortgage is a type of loan for the senior’s citizen age 62 and above. Home Equity Conversion Mortgage (HECM) loans are protected by the Federal Housing Administration (FHA) and allow the home-owners to exchange their Home Equity into money and no monthly loan repayments are required.
For those who want to stay in their homes, a Reverse Mortgage can be a good idea for them. It’s a cash flow source. Here are some pros and cons of reverse mortgage which you want to know for your cash flow. It’s a quite simple to qualify for the reverse mortgage than a regular forward mortgage.
Your balance is not the factor; you just need only enough income to continue paying for home-owners assurance, property taxes, and maintenance of a home.
Seniors do not have to wage taxes which they obtain from a reverse mortgage on the money because they are not considered as an income therefore, it is not taxable.
This is also important to realize that when this loan initially appears, can be more expensive. The reverse mortgage comes with a lot of charges and additional costs on the top of the interest including the mortgage assurance.
It is important to understand that; reverse mortgage will leave you and your successors with rarer assets because they use up equity in your home. If you are looking to reduce a taxable estate then it could be necessary. But it means you would not be capable of giving or vending your home to a child during your lifespan without refunding the mortgage or loan.
Home-owners of a definite age with good balance who are allowing for reverse mortgages should sensibly examine the options of other home protected funding.
Real estate is a career with significant rewards and as many challenges. Though it can be lucrative, it requires hard work and sacrifice. If you’re interested in going into real estate, we’ve put together a list of the pros and cons of becoming a real estate agent.
Pro: You have the flexibility to choose your own schedule
A majority of Real Estate Professionals get into the business because they want a flexible schedule, and it’s true, in real estate you are your own boss and can arrange your day so that you’re able to attend your child’s sporting event or be home for the after-school rush. You don’t clock in and clock out every day.
“There have been tremendous shifts in terms of when, where, and how people are working,” Sarah Sutton Fell, the CEO of FlexJobs told U.S. News, “and in the last five years we’ve seen a big increase in flexible work options, both being offered by employers and being sought by professionals.”
Real estate is one of those prized careers that have flexibility built into it.
Con: Without set hours, you might end up working more
Having flexible hours certainly doesn’t mean you have an easy job. “The standard workweek is 40 hours,” says U.S. News, “although many real estate agents will be asked to work beyond the typical 9-to-5, especially since many client meetings take place on weekday evenings and weekends.”
This could mean that while you get to take time off on a weekday afternoon to visit your child’s classroom, you might also have to skip family time on Saturday.
What you can do: Practice your time management skills
This is one of those pros and cons of becoming a real estate agent that’s easy to address because there are so many time management tools available to help you outsource tasks both in your family time and business. Some of the new real estate technologies are making the daily tasks of the profession easier and faster.
Pro: You have unlimited income potential
Real estate professionals make, on average, 25 percent more income than all workers, but there is no cap on how much you can make. The stronger your business skills are, and the more you put into the career, the more you’ll get out of it. Since you’re in charge of your own transactions, there isn’t a salary cap or a set amount of time you have to work before you get a raise. The sky’s the limit.
Con: You have no safety net in the slow periods
Because you’re not earning a salary from an employer, your earnings are based on your transactions each month. If you have a slow month, your takeaway is less. The job is based on commission, so if you’re not selling a property, you don’t automatically get a paycheck.
This is one of the cons of becoming a real estate agent you can address with proper planning. If you spend time creating a savings fund before you jump into real estate, then you won’t have a problem with cash flow in the slow periods. When transactions pick up, you can replenish your savings fund for the next time. Make sure your account for some of the most common real estate agent expenses while you’re budgeting for how much you should save.
Pro: You get to help make dreams come true
Imagine showing people beautiful properties every day and helping clients find their dream homes. As a real estate professional, you get to be part of some of life’s biggest moments with your clients. You can be part of helping them find that perfect home that will be in their family’s memories forever. It can be exciting and motivating.
Con: Buying and selling can be stressful for clients
Most of your clients won’t buy and sell homes regularly and any purchase is a significant financial decision. This can make tensions run high, especially if your clients are conflicted about what to do. Although working with people can be rewarding, it can also be stressful and have its challenging moments.
What you can do: Develop a robust real estate network
A network of like-minded real estate professionals can support you if you’re having a tough time with a particular client. Mentors who have had similar experiences can share approaches with you that have worked for them in the past. Spend time getting to know other agents in your area and ways they approach working with demanding clients or how they care for their clients in stressful situations.
Weigh the pros and cons of becoming a real estate agent
Before you get started on your real estate career, take time to think about how you will overcome some of the challenges of this rewarding industry. The pros are enough to attract many people to the industry, but it’s the professionals who can defeat the cons who have real staying power.
Typically, real estate commission is 5%–6% of the home’s sale price. In most areas the buyer’s agent receives 2.5%–3% in commission and the seller’s agent receives 2.5%-3% in commission.
Who pays the commission?
If you are buying a home, you don’t have to pay real estate agent commission; however, you still have to pay closing costs. On the other hand, if you are selling a home you pay commission to both your agent and the buyer’s agent when your house closes.
Can you negotiate commission fees?
Some agents will lower their commission fees, particularly if they are representing both the buyer and the seller in a home sale (also known as dual agency).
How does commission work for buyers?
The home seller pays the commission for both the seller’s agent and the buyer’s agent. But that doesn’t mean that there is no cost to the buyer. Sellers sometimes account for the fee they’ll be paying and pass costs along by raising their listing price.
Do you have to pay commission if you don’t buy a home?
Real estate agents are paid at the end of the process, so if you don’t buy a home, they won’t be paid for their time. On the other hand, if you decide you don’t like your agent and want to work with someone new, it may be difficult to break up with them if you’ve signed a contract (also known as a buyer’s agency agreement). Make sure to ask the right questions before signing a contract!
Do you have to pay commission if your home doesn’t sell?
Short answer: Probably not. Real estate agents are paid when you sell your home, so if your home doesn’t sell, you shouldn’t owe them a commission.
A real estate commission depends on the type of services provided, the actual agreements between the parties involved, and on local custom. The most common figure is 6 percent.
1- Typically, the seller pays the commission
2-The commission is usually split between the buyer’s and seller’s agents
3-Sellers can pay lower fees by using discount brokerage services or selling on their own
How much do real estate agents make? That depends
A real estate agent usually doesn’t earn an hourly wage. Instead, most make their income only after a home has been sold. This income is in the form of a commission, which equates to a percentage of the home’s selling price. So the answer to how much do real estate agents make will depend on how much the home sells for.
The average commission today is between 5 and 6 percent of the home’s sales price. Say the home you buy sells for $300,000. A 6 percent commission would equal $18,000.
Who gets that money and who pays?
But that commission money doesn’t go only to your agent. It’s typically split 50/50 between the buyer’s agent and the seller’s agent (also called the “listing” agent).
“If the seller’s agent also finds the buyer, the agent keeps the entire commission,” real estate broker Matt Buttner says.
The good news for buyers is that they don’t pay this commission fee. The seller pays the commission at closing. It then gets split up between the buyer’s agent and seller’s agent.
“But the amount is often based on negotiation between the seller and the listing agent or the agent’s brokerage,” he says.
In other words, the commission is negotiable. And some agents are willing to give discounts. In fact, three out of five sellers get a discount on their agent’s commission.
“Commission rates have been trending down in recent years,” says Buttner. “This is mostly because of the internet and technology. The MLS now automatically syndicates the listing out to real estate websites like Zillow and Realtor.com. So a listing agent’s job is easier.”
Discounts are given for many reasons.
“Say, for example, a client is selling one house and buying another using the same agent. In this case, the agent is more likely to offer a discount,” says real estate attorney/Realtor Bruce Ailion. “Or say the property is in a hot market and competitively priced. It might take less work to sell. That could lead to a discount.”
When the commission is too high
If a seller thinks the commission rate is too high, he or she can ask for a lower rate.
“A 6 percent commission can often be negotiated down to 5 or even 4.5 percent. This will depend on the selling price of the property,” says Buttner.
Sellers who can’t get the commission lowered have options.
“If the agent won’t budge or the customer doesn’t like it, they’re free to look elsewhere,” says Ailion.
If high fees are a concern, sellers can shop around with different agents and brokerages.
Agents believe they are worth the commission they charge.
“Buyer’s agents work much harder for their money,” says Buttner. “They often work with a particular buyer for months. They show them multiple houses and make many offers before something sticks.”
For this reason, the buyer’s agent sometimes makes a bit more than the seller’s agent.
“A lot of brokerages that charge less than 6 percent will still offer the buyer’s agent a full 3 percent,” Buttner says.
Remember that an agent’s hard work is not rewarded with every client.
“Not all transactions result in them getting a commission,” adds Ailion. “So the costs associated with transactions that don’t close must be factored into those that do.”
Ailion understands that 6 percent may seem high. But consider all the unpaid work that goes into being an agent.
“Imagine if you ran a McDonald’s. But you only collected after your customers ate the meal and were 100 percent satisfied. The cost of burgers and fries would have to be much higher,” says Ailion.
You get what you pay for
“Like a good doctor or lawyer, I believe a good agent is worth their fee,” Ailion says. “You’re dealing with likely the most significant asset in your life. So choosing the best representation makes sense.”
Consider, too, that agents say they are held to higher standards than many other pros who earn commissions. This is especially true of Realtors.
“Many agents spend so much time as sole proprietors of their own businesses. We also have continuing education requirements that must be met to renew our licenses,” says Realtor Kevin Deselms.
When you hire a lawyer or surgeon, “you’re not concerned with the hours spent on the task. You want the best odds of experiencing the most favorable outcome. That’s how people should choose their real estateagent,” Deselms says. “Who do they believe will give them the best result? In most cases, this won’t be a discount broker.”
Real estate agents make their money by arranging home sales and taking a cut of the sale price, usually in the range of 5 to 6 percent.
This fee is typically paid by the seller at closing and gets deducted from the seller’s money and given to his agent.
The seller’s agent doesn’t get to keep all the cash, however. The seller’s agent must share the bounty with the buyer’s agent.
If they didn’t, Realtors would essentially work for free when showing houses, and no one wants to work for nothing.
The 6 Percent “Tradition”
Real estate commission rates aren’t fixed, which means you can negotiate with your Realtor for a lower fee. Although a 6 percent commission is common, the average agent commission in 2015 was 5.26 percent.
When discussing commission, you may notice that your agent frequently refers to a “traditional commission.” This may seem odd, but it’s quite normal in real estate circles. It’s illegal for agents in an area to fix their prices by all agreeing to charge a specific rate. Any reference to a “standard” or “normal” rate has a negative connotation to Realtors because referring to a pricing standard could refer to a fixed price, and that’s a no-no.
Who Pays It, Who Gets It
In just about every case, it’s the seller who pays the commission. So if you sell a house for $200,000 and your agent charges a 6 percent commission, you’ll have to fork over $12,000. Typically, the seller’s agent and the buyer’s agent split the commission 50-50, so in this case, each agent would get $6,000. This split is negotiable, though. In fact, just about everything’s negotiable when it comes to commissions. An agent might typically charge 6 percent, but you can try to talk her down to 5 percent, accept a deal in which her commission depends on how quickly the house sells, or work out some other arrangement.
What Commission Covers
If a cool 3 percent per home sale has you thinking of a career change, think again. Real estate agents don’t get to keep all that money.
Agents typically work through a broker. The broker is the company whose name appears on the for sale sign in the yard. Brokers also pay the MLS listing fees, advertising costs and other expenses associated with selling homes.
Commissions are typically split between the agent and the broker, and the percentage of the split varies.
For example, new agents at a particular brokerage might get to keep less than half of the commission money they earn, while veteran agents who bring in a lot of business might get to keep three-quarters of it.
Going Your Own Way
There are alternatives to the typical commission structure. Flat-fee and discount brokerages list houses for a set dollar amount rather than a percentage of the sale price. You could place your home up for sale by owner (FSBO) and act as your own agent, advertising the home and fielding offers from potential buyers yourself.
Be aware, though, that most buyers will be working with agents, and those agents will probably expect a commission from you as the seller.
If you go flat-fee or FSBO when selling and you want agents to bring their clients around, you’ll still end up paying some commission, albeit at a lesser rate.
If you have ever wanted to peek at your real estate agent’s tax return to find how much your agent earns a year, you’re not alone. However, not all real estate agents earn the same amount of money.
For starters, real estate agents enter the profession from all walks of life with varying levels of education and motivation. Some become a real estate agent for the money, while others are attracted to the glamour, excitement, and challenges of selling the property.
Others want to be part of a profession that helps others to accomplish dreams. For many, a real estate career offers the opportunity to be your own boss, and that reason is a motivating factor for those who want to get out from under the thumb of corporate America.
How Much Does The Real Estate Agent Make Per House?
Whatever the reason for becoming a real estate agent, the fact remains that first-year real estate agents earn very little at first, primarily because they are struggling to learn the business while they build a client base.
As the years go by, agents can rely on referrals from satisfied clients to continue building their business. They learn other ways to attract clients.
On average, though, according to Salary.com, most real estate agents earn a median salary of about $36,000.
The top producer agents make a lot more, and the agents who sell one home every few months earn so much less than some of those agents are part-time.
The part-time agents tend to supplement income through a full-time day job doing something else.
How much agents make depends on the number of transactions they complete, the commission paid to the brokerage and their split with the sponsoring broker.
Agents who are just starting out typically receive a low commission split while they learn the business.
It is not unusual for a first-year agent to receive about 50 percent of the commission paid to the broker.
The most successful agents put in 60 hours or week or more showing homes, meeting with clients and looking for new business. But for those agents who make that commitment, the rewards can be priceless.
Real Estate Commission:
Most agents selling homes or leasing apartments work on commission. Basically, if you don’t sell you don’t get paid. A not-uncommon commission is 6%. If you live in a pricey real estate market like Boston or San Francisco, maybe you are salivating at the idea of earning $60,000 with the sale of one house. It doesn’t work that way, though.
If another agent is involved you’ll split that commission, so that’s 3%, or $30,000 each. However, before you see a dime, the $30,000 will first go to the brokerage firm you work for. How much you take home of that $30,000 – and remember, this is all pretax income – will depend on your contract with the brokerage firm. This is called the “split,” notes Crowley, the Boston broker, and while it often can be 50/50, that’s not guaranteed.
Now you are down to $15,000. It doesn’t end there, though. Many firms also levy a “desk fee” or “marketing fee” on agents that could bring your fee down to $14,100. But that doesn’t probably cover your complete marketing costs, which you are on your own for, and could easily chew up another $2,000 or $3,000. Add in the cost of your phone, car (gas and insurance), continuing education to maintain your real estate license and professional errors and omissions’ insurance and what looked like a $60,000 commission is now down to $10,000.
Typically, real estate commission is 5%–6% of the home’s sale price. In most areas the buyer’s agent receives 2.5%–3% in commission and the seller’s agent receives 2.5%-3% in commission.
Who pays the commission?
If you are buying a home, you don’t have to pay real estate agent commission; however, you still have to pay closing costs. On the other hand, if you are selling a home you pay commission to both your agent and the buyer’s agent when your house closes.
Can you negotiate commission fees?
Some agents will lower their commission fees, particularly if they are representing both the buyer and the seller in a home sale (also known as dual agency).
How does commission work for buyers?
The home seller pays the commission for both the seller’s agent and the buyer’s agent. But that doesn’t mean that there is no cost to the buyer. Sellers sometimes account for the fee they’ll be paying and pass costs along by raising their listing price.
Do you have to pay commission if you don’t buy a home?
Real estate agents are paid at the end of the process, so if you don’t buy a home, they won’t be paid for their time. On the other hand, if you decide you don’t like your agent and want to work with someone new, it may be difficult to break up with them if you’ve signed a contract (also known as a buyer’s agency agreement). Make sure to ask the right questions before signing a contract!
Do you have to pay commission if your home doesn’t sell?
Short answer: Probably not. Real estate agents are paid when you sell your home, so if your home doesn’t sell, you shouldn’t owe them a commission.
There are many criteria which could be put as a base to answer this frequently asked question, such as;
Yearly basis
Monthly basis
Hourly basis and Homely basis
Here we are primarily going to discuss how much do realtors make from a single home? We all are familiar with the fact that this field is a good way of earning a healthy income if a good amount of time and interest is invested in it.
An adept real estate agent knowing all the pros and cons of his profession tend to earn primarily on homely and even an hourly basis.
He is a commission expert, whenever he makes anyone buy or rent or even lend a property like a home, he has the fixed amount of commission that is to be collected from both the parties; buyer and seller.
So, every time a home is purchased or sold via the estate agent, fix percentage on the total amount has to be given to the person who performed the role of a bridge between seller and buyer, as a fee for his work.
There are many criteria which could be put as a base to answer this frequently asked question, such as;
Yearly basis
Monthly basis
Hourly basis and Homely basis
Here we are primarily going to discuss how much do realtors make from a single home? We all are familiar with the fact that this field is a good way of earning a healthy income if a good amount of time and interest is invested in it.
An adept real estate agent knowing all the pros and cons of his profession tend to earn primarily on homely and even an hourly basis.
He is a commission expert, whenever he makes anyone buy or rent or even lend a property like a home, he has the fixed amount of commission that is to be collected from both the parties; buyer and seller.
So, every time a home is purchased or sold via the estate agent, fix percentage on the total amount has to be given to the person who performed the role of a bridge between seller and buyer, as a fee for his work.
Being A Realtor 