How Real estate agents make money

Posted by Felix Okoli on Thursday June 14, 2012 7:41:55:

A real estate agent is a person that helps other people to secure or invest in real estate. If someone is looking for an accommodation, an agent can help him find one fast and based on his preference such as location, budget, available utilities and so on. Also for people seeking to acquire land, homes or other property, such an agent can help him facilitate it and they do this for commission which is at around 10%.

In Nigeria, real estate business is booming with the growing population that has not been matched with sufficient housing provisions. Houses and lands are getting scarce by the day and prices keep rising moreso in growing cities than in the urban places.

You can make good money as a real estate agent in Nigeria as all you have to do is link real estate buyers to the sellers and earn our commission. There is not much regulation about this business by govt as there is free entry and exit. You can start with little or no capital as long as you have connections with people who are interested in investing in it.

Let me give an example of how this works. Assuming you have a client that is seeking accommodation within the range of say N400,000 per year and you were able to secure one for them through a landlord friend you know, you stand to earn about N40,000 when they make payment to the landlord. Some real estate agents even collect payment directly from the clients and deduct their commission by source but you can as well make arrangement with the landlord to keep your commission for every client your bring for him. That's how it really works.

Some real estate agents even make more money by first selling application forms to clients who have requested for their services. You could sell such forms for N500 to N2000 and this allows you to get the details f the client such as name, address, marital status, size of family and so on.

How does one start real estate agency business?
- You may need to register your business in order to look legit but you can still start as a sole proprietor
- You need to have a contact address like an office where clients and sellers can meet you
- You need to have a contact phone
- You need to do marketing to let people know what you do
- You also need to decide on how much commission you want to be paid. It is normally based on rate such as 10%.

Some real estate agents even have a porfolio of places and homes they've linked up buyers with so having pictures and proof of your past work can help boost customer confidence in you. Two very important things you should always have are your contact phone and address. Once you make a contact, chances are that you can keep holding on to them for the long term and always keep a good reputation.