How Much Do Realtors Make?

When you start a new career, it’s crucial to have an idea of how much you would earn. You also need a breakdown of the factors that determine the amount of income streaming in, that way there’s always room to grow. If you have been considering kickstarting your career in real estate, you may want an idea of how much an average agent takes home annually. This knowledge can help you make better-informed choices when in the transition process.

That’s why we’re breaking down each factor that could influence your annual earnings. Regardless, do not forget that we only consider the average in this article. You can always aim higher. This just gives you an idea when making an important career decision. Let’s get to it.

Average real estate income depends on many factors

To understand a real estate agent’s salary, you must understand the different factors that come into play. It’s almost impossible to give a straight number because there are so many things to account for. Everything from the level of experience, commission splits, to the number of hours worked each week.

The more you work, the higher your pay

This should go without saying, but real estate isn’t your typical industry. The most successful realtors tend to work on nights, weekends, and even some holidays so that they are always available to their clients. Realtors putting in 40 to 50 hours a week can expect to make around $75k. According to the United States Bureau of Labor Statistics, the median pay for realtors per hour is $36.88 and the average hours worked is 47 hours per week, this would bring the annual revenue around $76,720. In addition, if you work around 60 hours a week your income could rise to $112,410. However, it’s important to note that these are only estimates and many other factors can move these numbers up or down.

Job Satisfaction

Job satisfaction could also influence your pay. Workplace culture, career advancement, location, and flexibility of work hours can have a huge impact on how much you bring home. A study about job satisfaction regarding real estate agents has shown that more satisfied workers earn up to three times more each year. Although pay can be a big determining factor in how satisfied you are with your career, you should also rely on other factors that could make you feel better about your job. If you aren’t satisfied, look at changing things up a bit. You could switch brokerages, join a team, apply for a broker’s license, or focus on a niche that will make you more excited to work.

Income increases with experience

As a real estate agent, you learn as you go. You also start to set expectations for yourself, and can work with a coach to meet regular goals. There’s no reason an experienced agent should expect to earn the same amount as a newbie. We’re not going to lie – it’s hard to break into the real estate world. Most realtors aren’t even sure how to navigate leads in the beginning, but it does get better.

Experience also helps you understand the intricacies of the job better. Once you’ve worked successfully with clients, you start to bring in referrals. You will also find what works for you – whether it be social media marketing, finding a CRM that keeps your communication streamlined, or combing through the MLS to find new properties.

This is why the average income of realtors increases the more years you spend in the industry. First year agents make an average of $40,000, and those with five years of experience tend to make north of $80,000.

Again, it is very important to note that your salary can be affected by a lot of external elements, but as a rule of thumb your average income should double after 5 years.

Your niche matters

What an average real estate agent makes varies according to your niche. If for example, you choose to specialize in commercial real estate, you will end up earning more than someone who specializes in residential real estate or property management. Those in property management or affordable housing have notably lower incomes, while realtors that specialize in luxury homes or green properties, have significantly higher earnings.

Another thing to take into account is location. For example, a Los Angeles real estate agent would earn more than a Spokane real estate agent because of the higher home prices. So, therefore, when choosing a niche to specialize in, know that your location does play a huge role.

Income also depends on your brokerage

Another very important factor to consider is your brokerage. If you want to work with a franchise, you have to consider the franchise fees and market caps. There’s also less flexibility and all of that will affect the amount you take home. Realtors in franchises make around $50,000 to $90,000 at entry-level.

If you choose to work for an independent broker, you may have fewer constraints but you bear more risk, but you could make an average of $70,000. No one way is better, you have to choose what works for you. If you become a broker, you also have the option of starting your own business. You’ll need to consider whether the sole proprietorship or LLC route is best for your business.

How can a real estate agent rise above the average income?

Don’t let your earnings be hindered by the “average”. There are always ways to beat the odds, rise above the median level of earnings, and bring home the money. We’ve found that the most successful realtors are earning more by excelling at managing their marketing dollars, finding quality leads, winning real estate listings, and staying updated on best practices.