This is the classic question that many ask when thinking about a career as a real estate agent? After all, what job is this? What is the salary? How much can I earn as a real estate consultant?
This is, without a doubt, the question that lingers in the minds of many who are considering a career in the real estate sector. After all, what does this profession involve? Is there a fixed salary? What are the income potential in real estate consultancy?
If you are looking for definitive answers, you may be disappointed, but don't be discouraged. Here are some considerations that may help you make a decision about whether real estate consultancy is the ideal career path for you. First I will address the "bitter" questions and then the "sweet" ones;)
The reality of remuneration in Real Estate Consulting
Firstly, it is crucial to clarify the reality of "employment" as a real estate consultant, which is quite different from other professions. As a general rule, there is no fixed salary, established hours, right to paid vacation or extra allowances. Social benefits are also not enjoyed, and the "employment" can end at any time, without the right to compensation. There is even the possibility that, at the end of a working month, you will not receive any financial compensation for the effort expended. This was my reality in the first year of activity, in 2016, and it is an experience shared by many Top Producers in the sector.
Another important point to highlight is that, despite the attractive promise of generous commissions, don't be fooled. Avoid being dazzled by the apparently high value of the real estate commission, which is levied on often large transaction amounts.
If you earn a 5% commission, calculated on a transaction worth €200,000 — which is equivalent to €10,000 — this may seem quite advantageous at first glance, but don't forget that:
- It has a "partner" that patiently waits for its share: the Tax Authority. :) In this scenario, taxes will apply that can reduce the amount by half, or less, depending on the volume of your IRS, or the IRC if you have a company.
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There is a high probability that you will have to share the real estate business, dividing the commission with a colleague, if he is the one introducing the client and you are the one raising the property, or vice versa. In this way, the aforementioned 10.€000 in commission can reduce to a modest €3,000... or even less.
- And finally, the expenses are all your responsibility:
- Car, Maintenance and Fuel - Avoid depending on public transport, except in sporadic situations. In this profession, the customer values punctuality and does not like to wait.
- Promotion and Marketing Costs - If you aspire to a successful career, set aside around 10% of your income to invest in promoting and marketing properties and their services.
- Fees and Other Expenses - It is common for large real estate agencies operating in Portugal to request a monthly fee, which can vary between €50 and €100, to cover administrative, marketing and legal expenses.
- Autonomy Costs - If you want benefits such as health insurance, paid vacations and others, know that these costs will be your responsibility. However, there are real estate agencies that have an incentive program that rewards the most productive.
Current Panorama of Real Estate Consulting in Portugal
According to data from the National Statistics Institute (INE), as of June 2023, there were 56,100 professionals involved in real estate activities in Portugal, which include buying, selling, leasing, administration and mediation. Real estate mediation is the segment that most attracts professionals, many of whom hope to achieve income that would be difficult to obtain in other areas. The real estate boom that has been taking place since 2015 contributed significantly to this increase, as in December 2014, the number was just 31,700 professionals. We are currently the country in Europe with the most consultants per capita!
But does this mean that everyone achieves the desired success? No! I would even say that many of the professionals working in this area came quickly and will leave even more quickly. Why? Because, while the earnings can be high, being a consultant is not for everyone. And with the current housing crisis in Portugal and access to credit, many of them are unable to even earn the minimum wage. In line with this thought, we can observe that almost 2/3 of the new unemployed people registered in employment centers, in July 2023, come from real estate activities.
So, what makes Real Estate Consulting such an appealing choice?
Based on my experience, I would highlight:
- Professional Autonomy: The freedom to be an entrepreneur and chart your own path, without the need to report to a hierarchical superior, is very rewarding.
- Personal Time Management: As for any self-employed professional, time control is entirely yours, which is simultaneously rewarding and challenging. You can take your child swimming in the middle of a weekday, go on holiday in the winter without having to ask for permission, etc. etc.
- High Earning Potential: Although uncertain, income can be significantly higher than in other professional areas. In Portugal, a few hundred Top Producers earn annual income close to or even greater than €200,000
- Expansion of the Contact Network: For those who value interpersonal relationships, this is a profession that allows you to expand your social circle, help a wide range of clients and establish new friendships. For a consultant, his circle of friends often intersects with his professional circle.
How do real estate consultants make money?
Most real estate consultants sign a service contract with the agency, which establishes the clauses of reciprocal rights and duties, but which does not mention any concrete fixed or variable remuneration system. Most advisors only make money after completing a real estate transaction: a sale or lease of a home, or other type of property. In most real estate agencies, the part of the commission that is owed to the consultant for their work is indexed to their productivity and depends on how many transactions they manage to carry out, on a usually annual basis.
In addition to the main income, other sources of income are added, although of a smaller scope. Here are some examples:
- Intermediation Commissions: These can come from banking services or life insurance, among others.
- Growth Share Commissions: When you help recruit a new advisor to your branch network, you become eligible to receive a percentage of future transactions made by that advisor.
- International or Interregional Referral Commissions : If you acquire a client outside your usual area of activity, or even in a different country, you can refer them to a colleague (usually within the same franchise network). If this referral results in a real estate transaction, you will receive a portion of the commission, which is generally set at around 25%.
- Commissions for Supplier Referral : This includes builders, decorators and other professionals in the sector. Many companies encourage consultants to refer them by offering a commission based on the volume of business generated.These commissions can reach up to 5%, 6% of the value of the business carried out.
Therefore, the success of a real estate consultant is intrinsically linked to his personal commitment. However, as a professional and often as an entrepreneur running a small business, it is crucial to consider several variables when projecting your annual income potential.
Factors that influence the income of a Real Estate Consultant
If I had to list 4 factors with a direct impact on a consultant's performance, I would choose:
- Experience – This one is obvious. When we look at the path of a successful professional, two things stand out: the amounts earned and the stability of income grows with the number of years of experience;
- Location - In addition to the importance of dominating your area, Oeiras is Oeiras and Arrentela is Arrentela. Two different cities, parishes or even neighborhoods can have very different prices. And the higher the average transaction price, the higher the yield.
- Specialization - The commissions received are proportional to the value of the property, and the consultant's specialization in certain segments (luxury, developments, new homes, etc.). The greater the degree of specialization, the greater the volume of transactions and their income.
- Commission System - This is a variable that depends on the choice of real estate agency, as each one has a different system that can provide different revenue. E.g.KW's remuneration system encourages the consultant's entrepreneurship and rewards him with commissions of 98% of the amount paid by customers, after he has accumulated €25,000 for the brand. This process is repeated every year. Below we can find, for some of the most important real estate agencies in Portugal, a table of commissions in 2023:
| Mediator | Commission paid by client |
% of this commission actually received by the consultant | Origin | Team | Agencies | |
| KW Portugal | 5% | Initially, the consultant receives 50% of the commission (40% in the 1st year), based on the date they joined KW.This rate is valid until you reach €50,000 in annual turnover and receive the distinction of 'Capper'. After that, the commission increases to 98% until the end of that year of activity and the remaining 2% is shared with your Growth Share network. The process is repeated in the following year of activity. | USA | 2,785 |
32 |
|
| Remax | 5% | The consultant's commission varies between 40% and 72.8%, depending on the chosen system and if you own a company. In the RAAP System, the commission is calculated based on the income of the last 12 months: if it is less than €25,000, it is 40%; between €25,000 and €50,000, the commission is 48% (or 45% for companies); over €50,000 results in a commission of 50% (or 47% for companies). In the Pure System, the commission is 72.8%, with a minimum fee of €1,000. The rest goes to the agency and the master franchise. | USA | 11.608 | 399 | |
| ZOME | 5% | The remuneration is very similar to that of KW. The main difference lies in the designation, which changes from 'Capper' to 'Topliner'. This status is achieved after accumulating €70,000 in commissions during the year. From that moment until the next 'birthday' date, the percentage of commission received increases to 95% of the amount paid by the customer. There is also an incentive program that aims to reward Top Producers. | Portugal | 1,258 | 44 hubs |
|
|
MoreConsul- tors |
5% | From the 1st day, consultants earn 50% commission until they reach €50,000 in accumulated annual revenue, and then earn 100% commission until the end of that same year. | Portugal | 869 | 32 | |
| Century 21 | 5% | USA | 4.032 | 169 | ||
| Sotheby's | 5% | On average, the consultant receives 50% of the commission charged to the client. | USA | 145 | 8 | |
| Decisions and Solutions | 5% | Portugal | 1.500 | 116 | ||
| iad Portugal | 5% |
From the 1st day, consultants earn 69% commission until they reach €70,000 in accumulated annual turnover, after which they earn 87.8% of the commission received for each transaction, until the end of that same year. |
France | 965 | ? | |
| Small agencies | between 2% and 5% | There are many small agencies (unrelated to this universe of international brands) with different remuneration models. E.g. A mixed model is common, in which they offer a fixed monthly remuneration (between €300 and €2,000), complemented by an amount between 1% and 1.5% of the commission obtained on each transaction. |
But specifically, what “salary” can a real estate consultant earn?
As I already mentioned, there is no fixed salary, since income depends almost exclusively on the commissions received by customers for transactions carried out. And these do not have a specific date to occur.
Therefore, to compare a consultant's income with a conventional salary, we would have to extrapolate from the annual accumulated income, divided by 14 months. As an example, I will use the KW Portugal commission system to carry out some simulations.
If we consider a beginner consultant ("rookie") who manages to sell just two apartments in a year, with an average value of €300,000 each in the Oeiras area, a commission of 5% would result in a total of €30,000 charged by the agency to clients. In this case, the consultant would receive an annual accumulated income of €12,000. Extrapolating to a monthly salary, we would have a gross salary of €857.
However, if the consultant carried out these two transactions in his second year of activity, the commission received would be 50% instead of 40%, and the monthly salary would increase to €1,071. In other real estate agencies, this value would be similar or slightly lower.
But is two transactions per year a small or reasonable number? In my experience, it's a small number. If a consultant maintains these results for more than 2 years, it would be prudent to reconsider remaining in this profession.
With total dedication, adequate training and the right commercial skills, after two years, it would be expected to reach an annual income of €50,000, that is, a gross salary of €1,785. From this level onwards, at KW, the performance becomes significant, reaching the distinction of 'capper'. For example, if you were to sell four apartments per year, this would result in a total commission of €60,000, corresponding to a salary for the consultant of €2,486 gross! In other real estate agencies, except for example ZOME and MaisConsultores, this value would be lower.
But is €60,000 in commissions a year too much or too little? I consider it a medium-low value. A Top Producer , in urban areas, can achieve a gross annual value close to €100,000, which would correspond to a gross salary of around €5,000.
It is important to note that the example of four apartments sold in a year may result in a lower total commission value, especially if there are shares with other colleagues. However, for a Top Producer , the average number of transactions is significantly higher, around two per month, i.e. 24 per year.
This is the minimum level that a Top Producer aspires to and that motivates many consultants to work hard to reach it. But, as with everything in life, it's not enough to want; You have to work and deserve it.
And of course, there are hundreds of real estate consultants in Portugal who reach much higher accumulated values, in the order of €200,000 or more. In my case, this value is clearly higher than €500,000.
How to get the best remuneration as a real estate consultant?
So in the face of this scenario, what to do? If you have some of the following characteristics, don't despair, you're in the right business, it's just a matter of time before "luck" knocks on your door :) 
- Commercial skills and a taste for human relations - This skill is essential for your success, if you don't have it innately, then you have to work on it. Even the most timid, when imbued with the right spirit, are able to make progress and improve their social and commercial skills.
- Resilience - No consultant can afford to give up after each disappointment. And believe me, many are waiting :) Imagine that you have a deal with CPCV scheduled for tomorrow and when you get to the notary the owner apologizes and gives up. Or when the buyer is unable to get approved for a home loan, or when there is a very interested buyer for your property under an open contract, and your colleague and competitor appears with a proposal overnight... these are just some of the buckets of cold water that await you in this profession. That day, drink a glass and the next day forget it and go fight! Falling down is allowed, getting up is mandatory.
- Passion for learning - This is a profession where the constant desire to learn is not just a valued quality, but an indispensable state of mind. As in many other areas, continuous learning is the key to success.
- Focus: The Indispensable Ingredient for Success - This is, without a shadow of a doubt, one of the best kept secrets in the industry. I can say with conviction that I have never met a Top Producer who did not consider focus to be the most valued and meticulously cultivated quality in his career. But what makes this attribute so vital? Simple: it is what separates a consultant who is content with a stable income from one who aspires to higher levels, both in terms of personal fulfillment and financial success. If you value your personal time, focus is the pillar that supports it.
In addition to these, there are other skills that can help you maximize your income:
- Have some savings that allow you to get through the initial year of activity without any remuneration.
- Master languages, with English being an almost essential option. If you don't know it yet, there's still time to learn.
- Possess a degree. You can always choose to take a course at the Higher School of Real Estate Activities, it's useful for the profession and helps you to elevate your academic skills.
- Have some digital skills. If you don't have them, take a course. You can't afford to use just the phone. You need to know how to use various types of messaging programs, have accounts on different social networks, etc. etc. Those who are digitally excluded have a harder path ;)
Frequently Asked Questions About a Real Estate Consultant's Compensation
1. Is there a fixed salary for real estate consultants? Or a base salary?
No, in Portugal and for most real estate agents there is no fixed salary, not even a base salary. Compensation is primarily based on commissions generated from completed real estate transactions.
However, some real estate agencies pay a fixed base amount, to which is added the amount of commissions relating to the consultant's transactions. In these cases, the commission rate is usually lower, between 1% and 1.5%.
Furthermore, there are situations in which consultants may receive a fixed base fee due to other functions performed, such as serving at the branch counters.This type of alternatives is suitable for consultants who are new to the profession or when they have a more limited entrepreneurial profile.
2. What are the expenses associated with the profession?
Expenses include vehicle costs, promotion and marketing, administrative fees and other expenses related to professional autonomy.
3. How is the commission calculated?
The commission is generally a percentage of the value of the real estate transaction and may vary depending on the agency and the remuneration system chosen. For example, if it is a property that is sold for €100,000 and the commission paid by the owner is 5% and the consultant's share is 50%, then the consultant would receive the amount of €2,500. For leases, it is normal for the commission to be worth 1 to 2 monthly rents.
4. What factors influence a real estate consultant's income?
Experience, location, specialization and the commission system are some of the factors that can influence income.
5. Is it possible to have other sources of income besides commissions?
Yes, other sources of income may include commissions for banking services, life insurance, and referrals to other professionals or agencies.
6. Is any specialization necessary?
It is not strictly necessary, but specializing in certain market segments can increase transaction volume and revenue.
7. What are the risks associated with real estate consulting?
Risks include the possibility of not receiving any financial compensation in certain months and the lack of social benefits such as paid vacation and health insurance.
8. What are the advantages and disadvantages of being paid through green receipts?
Advantages include greater flexibility and less bureaucracy. If you receive commissions through Green Receipts and opt for the Simplified Regime (gross annual income of up to 200 thousand euros), you will have to pay VAT (if the annual volume of services provided exceeds €13,500), contributions to Social Security (rate of 21.4%) and IRS (IRS category B, according to the level and household).
The disadvantage is that you will not be able to account for all the expenses associated with the profession, to do so you will have to switch to the Organized Accounting Regime or create a company in your personal name. If you opt for Organized Accounting, you will be able to deduct most charges and expenses related to your activity from your gross income subject to IRS.
9. How do taxes work for real estate consultants with their own company?
If you have a personal business, you will have to pay VAT: on commissions received, as well as IRC and other extra taxes. Having a company can be more advantageous as it will be possible to deduct various expenses and tax deductions not directly related to the activity, but it also involves more costs and administrative and accounting responsibilities.
10. Is there a maximum limit on the commissions a consultant can earn?
No, there is generally no maximum cap on commissions. Your earning potential is influenced by your productivity and market conditions.
11. How can I optimize my remuneration as a real estate consultant?
Focusing on more profitable market niches, investing in training and marketing, and maintaining a good relationship with customers can be strategies to optimize remuneration. Choosing a real estate network that offers the largest share of the commission charged to the client is also an option to consider.
12. Is it possible to negotiate the commission percentage with the agency?
In some agencies, it is possible to negotiate the commission percentage, especially if you have a history of high productivity, but for most real estate agencies there is a Commission System that is the same for all their consultants.
13. How are commissions shared between different consultants handled?
Shared commissions are usually divided based on pre-arranged agreements, which can vary from agency to agency, but the 50/50 split is widely accepted by the real estate industry, with the exception of Remax and ERA which have been criticized for creating entropies, some of them are in the retreat phase. In the case of Remax, the 70/30 ratio prevailed for some time (a situation that has not yet been fully reversed by some professionals) and in the case of ERA, many consultants in this network refuse or put obstacles to sharing their properties.
14. What are the best practices for financial management as a real estate consultant?
Keeping a detailed record of all transactions, reserving a portion of earnings for taxes and investing in tools that increase your efficiency are some of the best practices.
If you read with interest and are not afraid to face a challenge that could change your life, find out more about the career change that changed my life and that of more than 190,000 colleagues around the world! Check out my page: https://ana-macao-kw.pt/en/working-at-kw-keller-williams