Is your average of $80K before expenses? Because if that is the case then I would argue the take home (pre-tax) is likely closer to $60K-$70K minimum. E & O insurance, MLS dues, marketing costs, etc. adds up quickly. Many real estate coaches suggest putting 25% of the commission aside towards those expenses. You also have to factor in gas, marketing on properties that don't close, etc.
@biggerpockets-43501dcc8bf173e1894643b7f9c7d920:disqus - Correct, but since technology has become integrated into the business, costs have risen. It is not uncommon for agents to spend closer to 50% of gross on expenses. Then Uncle Sam comes and takes his cut. Essentially, realtors don't take home what the gross commissions are, a common misunderstanding amongst the public. The a good guideline is 33% expenses, 33% taxes, 33% to savings and living.
I am a little surprised that not one mention of an agent's tax bill is mentioned in this article. Expenses are one thing, but that's something we can control - and yes it can lower our tax burden as legitimate business expenses-, but the taxes we have to save and pay for are also a substantial part of our budgeting process. Shout out to the previous commentors who mentioned that taxes are also taken out of a Realtor's gross commission.
