If you’re looking to switch careers or work in the real estate industry, you may have asked yourself at times, “How much do real estate agents earn?” Keep in mind that many real estate agents are not under salaried positions. Unlike most professionals, agents don’t always get a stable source of income on a monthly basis. Knowing how much real estate agents make will help you plan and budget better, especially during your adjustment period as you transition onto this new career path.
Are you planning to become a real estate agent? Read on to find out what the average real estate agent salary actually is.
4 Factors That Affect a Real Estate Agent’s Salary
Before we deep dive into how much money real estate agents make, it’s important that we understand what factors can impact the numbers.
Typically, real estate agents can choose their niche — whether commercial or residential — which will determine the type of properties they will focus on. Most people will tell you that commercial real estate agents have the potential to earn more because their commissions are typically higher overall.
Some residential real estate niches, such as affordable housing and property management, have notably lower incomes. On the other hand, niches like green properties and luxury homes can earn you remarkably higher commissions.
When approaching real estate as a career, consider what types of properties you might be interested in most.
2. Work Hours
Another factor that can affect real estate agents’ salaries is the number of hours they put into the work.
Looking at a day in the life of a real estate agent, they don’t really have a structured workday or set work hours. And in a way, this is one of the perks! You have more control over your schedule, when you work, and where you work.
However, in this fast-paced and competitive industry, remember that putting in longer hours usually leads to higher earnings.
3. Working on a Team
Some real estate agents think that working solo or with a very limited network will enable them to get a higher portion of the commission. For some, this may hold true.
However, when you join a real estate team, you’re almost assured that there is constant work to be done. You get a steady flow of leads and clients. You will be able to consistently create market listings, show houses, meet leads and potential clients, manage current clients’ needs, and coordinate with other real estate professionals.
Being part of a real estate team can mean that your income will be more consistent, making your work more stable than doing things solo. And as an added bonus, working with other professionals will prove to be an excellent opportunity to hone your own skills.
4. Years of Experience
In real estate, the amount of time you’ve spent working in the industry may mean you get to perfect your knowledge, skills, qualities, and experience. All of these things will give you an advantage over other real estate agents, which means you could potentially earn more.
Indeed notes that real estate agents in their first to the second year earn about $85,000 annually, while those who have been in the industry for more than 10 years can make around $112,000. Other reports will tell you that experienced real estate agents can potentially earn somewhere between $150,000 to $165,000 every year.
Again, it’s important to note that this can depend on other factors that can influence the average real estate agent’s earnings.
So, are there a lot of variables at play? Absolutely. However, you also have more control over your salary than you might think.
How Much Can Real Estate Agents Earn?
According to data from the U.S Bureau of Labor Statistics, the average annual pay of new real estate agents was $48,930 in 2019, and $59,720 for new real estate brokers. The top 10% of agents and brokers can earn upward of $111,800 and $178,720, respectively.
Do keep in mind that most real estate agents earn their salary through commissions. Commissions are a percentage of the property’s sale price. Generally, this is set at a 4% to 6% fee. For example, if the property sells at a price of $1,000,000, the commission you earn as the agent can range from $40,000 to $60,000. Also, you typically don’t get paid until closing.
For commercial properties, commissions can run up to 10% of the sale price. For others, they may receive a standard commission that sits at just 1%. For those that don’t work based on a percentage, they may receive a flat-rate fee. All of these factors are agreed upon in the earlier stages of the sale process and may vary depending on the location, region, and size of the property.
Essentially, real estate agents' salaries can vary widely as this will mostly depend on the commissions you make.
While there are reports on annual average salaries that real estate agents earn, there are always ways to earn above the median level of earnings. Work on honing the qualities required to succeed as a real estate agent. Get out there and network with leads, clients, other real estate professionals, and your community members. Don’t forget to market yourself (or your business) as an industry leader. Learn how to find quality leads and win listings.
Ultimately, stay updated and implement best practices. And with hard work, patience, and time, you’re well on your way to maximizing your earning potential as a real estate agent.
If you’re interested in joining a team of elite real estate agents in Las Vegas, contact the Brendan King Group today.