Real estate agents earn from $ 20,000 to over $ 100,000 per year.
The wide range occurs due to the wide variety of types of real estate agents.
There are those who are just starting out and doing the job as a side gig. There are the top performers who work during all their waking hours.
Which one are you? The earning potential of a real estate agent is limitless. If you don’t mind working long hours – including evenings and weekends – and you enjoy helping people, this field is for you.
How Are Real Estate Agents Paid?
First, a few key definitions. A real estate agent can act as a buyer’s agent or a seller’s agent.
A buyer’s agent represents the buyer. The seller’s agent (or listing agent) represents the seller. It is possible that real estate agents can handle both ends of the transaction, bringing a buyer into a home that the agent has listed for a seller.
Real estate agents are paid by commission, usually split 50-50 between the buyer’s agent and the seller’s agent. If the property is cheap, agents may instead earn a fixed fee. If you are just starting out, you should know that marketing plays a very important role in your long term success. Keep an eye out for the latest real estate marketing tips to stay competitive.
How does the real estate commission work?
Real estate agents work under brokers. The broker is a real estate company.
How does the commission work? The typical commission fee for a real estate agent can be 6%, or 6% of the sale price. The 6% commission split is 3% for each agent (seller and buyer).
Not every real estate agent gets the full 3%. Instead, the individual agent typically shares the 3% fee with the broker. The split is usually 50-50.
Realtors may charge a higher or lower percentage commission fee, depending on what is set by the real estate broker. Real estate agents generally also receive a base salary.
How To Make Money As A Real Estate Agent
Most real estate agents manage residential properties. Some agents specialize in the sale of land and commercial properties.
Real estate commissions for land and housing sales range from 6 to 8%. Commissions on commercial sales may be higher.
An agent earns a commission for every real estate transaction. The amount you earn depends on the land, commercial property, or the selling price of the house.
More sales equals more money. Whether it’s a single brokerage or one of the many real estate franchises, be sure to carefully review payment details as they differ significantly from business to business.
Here are 2 ways to make money as a real estate agent:
1. Listing agent or listing broker
The listing agent meets with the seller and sets a selling price for the property. Listing agents take care of obtaining the necessary descriptions and pictures, so that they can be published on real estate websites. They can offer suggestions of things that can be done to help sell.
Once the listing contract is signed, the agent advertises the property on the real estate agency’s website and on a multiple listing service.
2. Buyer’s agent
Buyer’s agents meet with people shopping for a home, land, or commercial location. They listen carefully to the opinions expressed by the buyer. Then the agent tries to find them the type of place that meets their needs. Most real estate agents also put the buyer in touch with companies that can perform pre-sale inspections, such as appraisals and testing for pests, radon, and mold.
10 key responsibilities involved in real estate transactions
1. Agents make appointments with sellers and buyers, and other agents. They juggle many factors, such as other showings already scheduled, houses where tenants need to be notified, and even weather conditions.
2. Most agents organize open houses. Many real estate agents use open houses to network by connecting with more potential buyers.
3. Many agents make sure the buyer is prequalified. The buyer goes to a bank or lending institution, provides financial information, and knows how much money can be borrowed.
4. Officers schedule screenings. Screenings often take place after working hours and on weekends. To work in the field, you must be prepared to work these hours.
5. The buyer’s representative plans and coordinates assessments and inspections.
6. Both agents earn their real estate agent commissions by overseeing negotiations. They usually work from a sort of âchecklistâ, dealing with necessary items one by one, such as a home appraisal as part of the services rendered. The average real estate transaction takes at least a month or more.
7. The contracts are drawn up and signed. Property taxes must be calculated and prorated. There are also other taxes and fees, as well as legal fees. The seller pays the commission. Both seller and buyer should receive an overview of closing costs before the closing date.
8. The seller’s agent should update the property’s status as a pending sale.
9. The vast majority of successful agents monitor the flexible real estate market, pay attention to sales, and conduct market research.
10. There are key differences between average agents and top performing agents. As with other professions, the person who focuses on networking and building relationships in the community will earn the most money.
How Much Do Realtors Make Each Year?
After obtaining a real estate license, these new field agents most often work for a broker. They will receive a base salary plus a commission. There are several factors – like the amount of salary – but how much each person earns depends on the number of trades they negotiate. Statistics on the average salary come from the National Association of Real Estate Brokers.
Perhaps the worst performers are those who dedicate themselves to real estate part-time to earn extra income. They can earn around $ 20,000 a year.
Many real estate agents are very successful and earn $ 100,000 or more per year.
The average salary for a real estate agent is $ 44,000.
Where Do Realtors Make The Most Money?
Where are the highest payouts? Of course, this relates to where the average home sale is the highest, according to labor statistics.
Here are the top 5 states as of 2021:
- New York $ 103,907
- Colorado $ 103,371
- South Dakota $ 101,124
- West Virginia $ 101,068
- $ 100,507