HustleBlog

My interest in real estate is based on the desire to obtain a portfolio of properties. I had always thought, however, that it would be worthwhile if I were to buy just one home and save my commission. Here are the calculations to determine if it is worth it. I calculate a per hour rate for the effort I have had to put into it.

• Connecticut requires 60 hours of in class training to obtain a salesperson’s license.
• The studying per class (20 classes) is about a half hour or 10 hours total.
• The two tests will require about 5 hours of studying each or 10 hours total.
• The tests themselves take about 2.5 hours or 5 hours total.
• Miscillaneous activities such as applications and phone calls are worth another 5 hours.

The total hours required assuming you pass both tests the first time is 90 hours.

The houses that I am interested are in the $300,000 range. The total commission on the house is usually 5%. This is typically split 50/50 between the selling and buying brokerages. The rate that the salesperson receives can very greatly but it is not unheard of for a salesperson to negotiate a very high rate for their personal transactions. The broker will often deduct expenses before this cut as well. I will assume the salesperson can negotiate for at least a 65% commission.

• 5% of $300,000 is $15,000.
• My broker gets $7,500 of this.
• He gives me 65% or $4,875.
• I paid $500 for the class.
• I will pay about $500 more in various fees.

I have worked 90 hours and got paid $3,875. This ends up being $43 an hour. Thats a decent wage. Hopefully I gained some knowldege along the way too and was able to negotiate a better sales price, see through the mortgage scams and write up a beneficial contract.

If I already had a house and it was in the same range I would end up with close to $100 an hour for the work I did. Most people will own more than one home in their lifetime so this could pay off for you!

Wish me luck on the state test!