Bookkeeping for Real Estate Agencies

Agency income is earned in a way that makes accurate accounting genuinely difficult. Work begins at listing, commission is contingent on a sale completing, and payment arrives at settlement, which may be months later and may not happen at all. In between, the agency has carried marketing costs, agent time and office overhead. Recognising commission at the wrong point produces a set of accounts that looks strong in a month where several properties went under offer and poor in a month where those same properties actually settled.

Commission then has to be divided. Splits between the agency and the selling agent, referral fees to introducers, conjunction arrangements with other agencies and any override to a principal all come out of the same amount, and each needs to be calculated from the correct base. A split applied to a gross figure where it should have been applied to a net one, repeated across a year, is not a rounding difference. Clawbacks on failed settlements add a further complication, because commission already recognised and in some cases already paid to an agent has to be reversed cleanly rather than left as an unexplained gap.

Trust accounting sits over the top of the sales business. Agencies handling client money in Western Australia operate under trust account requirements administered by Consumer Protection, with prescribed record keeping and an annual examination of those records. Marketing money paid in advance by vendors is client money until it is spent on the campaign it was provided for, and treating it as agency income before that point is a serious error rather than a presentational one. We support your trust reconciliation and keep your records ready for the auditor appointed to examine them.

Agent engagement is the third area. Real estate has a long tradition of commission only and contractor arrangements, and the description in the agreement does not determine the treatment. Where an agent is paid mainly for their labour, superannuation may be payable, and payroll tax may apply once the threshold administered by RevenueWA is reached.

We reconcile commission from settlement through to agent payment including splits and referrals, handle agent and office payroll, support your trust reconciliation, and prepare your BAS. Reporting shows what each agent contributes against what they cost.