Real estate agent earnings in South Africa can vary significantly based on factors such as experience, location, market conditions, and the type of properties they deal with.
The average income for real estate agents in South Africa ranged from about R20,000 to R60,000 per month.
However, top-performing agents in lucrative markets could potentially earn significantly more, sometimes exceeding R100,000 per month or more.
Remax notes that its top 100 earn an average of R2.5 million each in commission.
It's important to note that these figures are approximate and can change over time due to fluctuations in the real estate market and other economic factors.
Additionally, commissions earned by real estate agents are typically based on a percentage of the property sale or lease price, so high-value transactions can lead to higher earnings.
The standard commission rate can range from about 5% to 7% of the property's selling price, although this can be negotiated between the agent and the client.
To provide a rough estimate, let's consider an example:
Suppose an agent facilitates the sale of a property valued at R1 million
At a 5% commission rate, the agent would earn R50,000 from the sale.
At a 7% commission rate, the agent would earn R70,000 from the sale.
The current average house price in South Africa is around R1.4 million
At a 5% commission rate, the agent would earn R70,000 from the sale.
At a 7% commission rate, the agent would earn R98,000 from the sale.
It's important to note that not all properties sell for the same price, and agents may not always close deals on every property they list.
Additionally, agents typically split commissions with their brokerage firms, and there may be additional expenses involved in marketing properties and running their business.
Niël Cronje, CEO of Keller Williams Realty Southern Africa, states that a general rule of thumb in the industry is that 20% of today’s estate agents sell 80% of all property.
Taking a property of R1 million selling price with a 5% commission = R50 000.
Generally, the seller does not want to pay commission on this amount and that equates to R43 478 net. 50% of this amount is payable to the principal in the traditional model which leaves the agent with R21 739 pre-tax; R17 392 post tax on an average of 20% tax.
He said that the average agent sells seven houses per year: R17 392 x 7 = R121 744 per year … R10 145 per month. “For this reason, many agents change to other agencies that has moved away from the 50/50 commission split and focus on limiting their expenses.”
If an agent sells a property each month and two during peak months, that number quickly stretches to R25,000 per month or a little more.
And if one takes the average house price in South Africa (R1.4 million), that number climbs again, towards the R30,000 level.
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