You have decided that the stress of being a full-time real estate agent in Illinois is not for you. While researching what to do with your license you find a referral only license holding company. The big question you ask yourself is “Can I make a living doing that?” The answer, like most answers in life is, it depends.
Let’s Break Down the Numbers
One of the first factors that go into whether you can make a living as a referral agent is what you consider to be a living. Let’s break down some numbers.
Let’s say you have sat down, looked at your expenses, and decided that you need to make at least $75,000 a year with your license. The average home selling price in your area is $200,000 and the average commission for a real estate agent is 3%. You refer all your clients to other agents in return for a referral fee of 25% of their commission. You then need to calculate the number of referrals that you need to make to reach your goal:
- Average Selling Price x Commision = 200,000 x 3% = $6,000
- Average Commission x Referral Fee = 6,000 x 25% = $1,500
- Annual Income / Referral Fee = 75,000 / 1,500 = 50 referrals
In this scenario you would need to make 50 referrals a year and each would have to close to make your required income of $75,000 a year. Is every transaction going to net you $1,500? No, some will bring in more and some will bring in less. Use the averages in your area as a starting point.
Is 50 referrals in a year possible as an Illinois referral only agent? Absolutely, depending on how hard you are willing to work at lead generation. The good news is, after you generate the leads and hand them over to a full-time agent all you have to do is wait for the check.
Conclusion
So the answer to the question can you make a living as a referral real estate agent in Illinois is yes, you can. You just have to put in the work.
Joining a license holding company, such as this one, is easy and a smart move for any broker who is not actively engaged in buying or selling real estate.