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Managing Your Commission to Last the Year

January 14 2018

hdc managing your commission to last the year

The first commission check you earn in real estate feels amazing. After receiving it, it can seem like you're set as far as finances go. After all, you just have to keep doing what you're doing and the commissions will keep rolling in. It's easy to forget that there are good months and bad months, and that you have to make each check last. Find tips to make your commission last the year here!


It's hard to budget for the year when you have no idea how many transactions you'll complete. Try to get an estimate by examining your last two or three years in real estate. Determine what your average annual income was each year, how many leads you generated, how many appointments you booked, how many lead sources you used, what your conversion ratio was per lead and appointment, and how many homes you actually sold.

Do your numbers stay consistent year to year? Which of the above factors may have influenced changes you see in your annual commission? Take these into account to generate a realistic prediction of what your income will be. If you end up having an exceptional year that smashes your expectations, all the better!

If you're still new to real estate, know that 59 percent of Realtors® who have two years experience or less made less than $10,000 in 2015, so you may need to supplement your income for a while.

Daily Expenses

Food, shelter, electricity, clothes, a car, entertainment—these are all things you need even if you have a slow month. Figure out how much it takes to maintain your household at a comfortable level and at an emergency level. Once you've done that, create a monthly budget to run your household at a comfortable level and make sure you maintain enough savings to last at least a few months at your emergency level in case you run into business hurdles.

Emergency Savings

An emergency savings fund is one of the best ways to make sure your commission lasts all year. Set aside a portion of each commission to cover unexpected expenses such as car repairs and health care co-pays.


Real estate agents need vacations, too, especially after a year's worth of careful budgeting. Take some stress off your wallet by budgeting the cost of your vacation into each month's commissions.


Being a real estate agent is amazing, but there may come a day when you're ready to retire, and as Linda McKissack said, "The day you sell your last house is the day you make your last dollar." So inflating your cash flow with passive income can add to your financial security now and in retirement.

Now that you have some budgeting guidelines, go forth and blow your commission out of the water! How? Find out in our free monthly webinar series, Secrets of Top Selling AgentsSecrets of Top Selling Agents! Our first webinar in 2018 will feature Tom Ferry sharing proven strategies from his latest book, Mindset, Model, and MarketingRegister for the January 31st webinar here!

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