The Queensland real estate agents making millions in commission
Queensland’s top agents sold $3.4 billion worth of property, according to an independent report, with expected commissions of up to $3.5 million each. The state’s real estate agents and their estimated commission can now be revealed. Full list.
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Queensland’s top real estate agents have been making millions in annual commission off the back of a booming property market - but often only a third of that cash actually goes in their pocket.
Market intelligence provider REB’s latest performance data has revealed the state’s top 50 agents sold $3.4 billion worth of property in 2020.
As Queensland property owners cashed in on the changing priorities of the pandemic, agents spilt huge commissions back into suburban branches.
Based on REB data and assuming a conservative commission of 1.5 per cent, Queensland’s top 13 real estate agents grossed more than $1 million each in commission each in 2020.
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However, the agent only walks away with an average of 35 per cent of that total with about 30 per cent paid to the franchisor and the final 35 per cent spent on support staff wages and office costs, according to real estate sources.
While agents and the big agencies are cashing in on the real estate boom, so too are vendors with homeowners making $12.75 billion more in 2021 off the sale of their property than they did the previous year.
Core Logic data shows the number of homes sold in 2021 increased by 32 per cent and units up 13 per cent while the average increase in profit from sales jumped by $200,000 for homes and $55,000 for units.
REIQ CEO Antonia Mercorella said they didn’t reap the rewards without a lot of hard work behind the scenes, and significant overheads.
And the most sizeable expense was often bricks and mortar.
“Although we’re all getting better at using technology, you’ll still find that in the majority of cases, a real estate agent will still have a base,” Ms Mercorella said.
“It’s an industry where presentation is important so you’ll find their offices are often located in very prestigious suburbs where rent is very high or they’ve purchased the building.
“They’re sitting in quite expensive real estate and many offices have a beautifully presented reception area where people can come in and transact real estate.”
Public liability, professional indemnity and cyber insurance are also coming out of the commission as well as administration and support staff costs, marketing for the agency and its agents, and sometimes franchise fees.
Real estate is an increasingly competitive industry in Queensland and standing out from the pack can be an expensive challenge.
Ms Mercorella said the state’s top agents would throw a “very significant” amount at marketing their brand and personal profile.
“This is why you’ll often see big billboards, bus stops, lots of money spent on social media and digital marketing- all of that really adds up,” she said.
Ms Mercorella said with the fierce competition came controversy when agents were ranked on various performance factors.
The REB’s list is just one set of rankings based on submissions which were open from July 5 to July 23 last year.
Entrants were required to submit figures from their settled residential sales across 2020 and were ranked according to specific metrics including the number of properties settled, the total dollar value of settled properties as well as the average sale price of properties sold.
The data was verified by Momentum Intelligence to ensure accuracy.
Topping the Queensland list based on all metrics was Alex Jordan from McGrath Estate Agents but it was Michael Kollosche who had the highest total value of residential properties sold.
The Gold Coast agent transacted almost $234 million worth of property and if he was charging even 1.5 per cent commission, Mr Kollosche could have grossed $3.5 million in 2020.
Mr Kollosche has 24 years in the industry and two support staff.
Alex Jordan sold the second highest value, transacting more than $161 million in residential property.
The McGrath Estate Agent has three support staff and assuming a commission of 1.5 per cent, he could have grossed $2,420,270 in 2020.
Next on REB’s list was Adrian Reed who transacted about $128 million in residential property.
The Reed & Co. Estate agent has been in the industry for just six years and has one support staff.
He potentially grossed at least $1.9 million in commission in 2020, if he was charging 1.5 per cent.
Sources have told The Courier-Mail that the average commission of some agents is above 3.15 per cent.
Also high on the list were Tony O’Doherty, Simon Caulfield and Will Torres.
Ms Mercorella said it was important to remember that agents who continually sold multimillion-dollar properties were the exception rather than the rule.
She said 2021 was an extraordinary year for real estate with high activity levels and transaction volumes.
“There’s no doubt that there’s a lot of real estate agents who have done very well this year but the interesting thing about that is there have been a lot of new entrants and it’s been really challenging to get the listings,” she said.
Agents can invest time and money into compiling appraisals and presentations without landing the gig.
They’re often still supporting a team who takes phone calls, answers queries, prepares contracts, creates content, and even presents homes.
And for the agent “who shines out the front”, things aren’t always as glamorous as they may seem.
“Real estate agents will tell you it’s not unusual to get a text or call at 10pm at night,” Ms Mercorella said.
“And what we know about consumer behaviour now is that people expect a pretty immediate response.”