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Real estate agents are in high demand. The Bureau of Labor Statistics indicates that the median salary for an agent was $47, 584 per year as of May 2017. However, agents can make up to six figures if they work in big cities like Chicago and New York City.
In 2019, the typical real estate agent compensation was $49,700, according to the National Association of Realtors. Almost majority of real estate agents, however, operate as independent contractors within their brokerages and make money by collecting commissions rather than being paid a salary, and variables such as the number of hours worked and years of experience may have a substantial influence on each agent’s earnings.
How Do Real Estate Agents Get Paid?
The majority of a real estate agent’s income is determined by the commissions collected by the brokerage in exchange for assisting a buyer in purchasing a property or a seller in listing it, as well as how these fees are distributed between the brokerage and the individual agent. So, when we speak about pay, we’re referring to how much a real estate agent earns through commissions.
Because the brokerage determines so much of what you may expect to earn as a real estate agent, you should do a lot of research before deciding on one. You may boost your earning potential by choosing a real estate agency that provides you with the resources, skills, or mentoring you need in addition to a competitive commission structure. More in-depth information on how to pick a real estate business to work with may be found here.
Affecting Factors for Real Estate Agents’ Salary
Agents’ earnings vary greatly based on a variety of circumstances. Real estate agents, for example, might work part-time or full-time, resulting in vastly different earnings. Furthermore, a major portion of a top-earning real estate agent’s revenue comes from recommendations, which tend to rise as the agent’s expertise grows. Because markets differ, a real estate agent’s location is also a significant consideration. A median yearly income, on the other hand, may give you an indication of what to anticipate.
The number of hours
The median gross income rises in tandem with the number of hours worked each week. However, many agents work part-time in real estate, lowering the typical salary for all real estate agents. A median gross income of $65,630 or more is earned by agents who work more than 40 hours per week, and a median gross income of $100,000 is earned by agents who work more than 60 hours per week.
Years of Professional Experience
The majority of agents, 56%, have been in the profession for less than two years. Real estate agents with more experience clearly earned substantially more money than those with less. Furthermore, many new agents will not remain in the field for long or will work part-time, both of which have a substantial influence on real estate agent pay data.
It’s also worth noting that recommendations accounted for around 20% to 30% of the revenue for brokers with higher experience. The longer you’ve been in the company, the more customers you’ve acquired, and the more essential those clients are to your bottom line. The majority of your revenue will come from repeat and reference customers, therefore generating new leads will become less and less significant. Agents with fewer than two years of experience, on the other hand, claimed that recommendations accounted for just 16 percent of their revenue.
Business Address
In terms of income potential, the adage “location, location, location” applies to real estate brokers just as much as it does to property. You may succeed in real estate anyplace, but if you reside in a region where homes are sold for extremely cheap prices, your income will be restricted. These are the top ten cities for real estate in 2020, according to Realtor.com:
- Idaho
- Texas
- Tucson
- Chattanooga,
- South Carolina
- Rochester
- Colorado Springs
- Winston-Salem
- South Carolina’s Charleston
- Memphis
Expenses of Operations
It’s worth mentioning that real estate brokers with greater commission revenues had higher costs on average. This is due to the fact that the more money you can put into your profession, the more money you can earn. For real estate brokers making $10,000 or less per year, the median expenditures were just $1,640. Real estate agents who made $150,000 or more per year had a median expenditure of $35,220.
Real estate investing is similar to rolling a snowball down a hill. It may begin tiny, but within a few years, it will expand significantly. As a result, we advise new agents to devote the majority of their cash to marketing.
Early investments in expanding your consumer base may pay off handsomely in the long run. Top-earning agents get a lot of business through recommendations and repeat clients, which may take years to build up. Investing in your pipeline and using the appropriate tools can help speed up the process.
Tools to Assist Real Estate Agents in Increasing Their Earnings
A “chicken and egg” challenge confronts new agents: It’s difficult to create new sales without a network of previous customers who can suggest you. Building a network, on the other hand, is impossible without fresh sales. When we look at how much real estate agents earn, we may use the following tactics and tools to improve their bottom line (and the timetable for higher referrals):
The Internet and Social Media
As a real estate agent, you’ll rapidly lag behind if you don’t have an internet presence. You have to be where your prospective customers are to locate them and build connections with them, and the majority of them are on Facebook and Instagram.
Utilize tools to help you use social media more efficiently while you’re setting up your accounts. You can download two free guidelines to assist real estate agents to manage Facebook and Instagram, both of which are meant to help them generate more leads.
- Learn how to utilize hashtags, what kind of photographs to upload, and what kinds of material to submit for optimum results on Instagram for Realtors.
Marketing through email
You want to maintain your name in front of customers’ thoughts while they’re buying or selling a house. Sending frequent emails that give value to former and potential customers is a wonderful method to achieve this. As you can see, recommendations and repeat business will be one of your main sources of revenue.
Email marketing software is easily accessible, affordable, and simple to use. While you’re creating your customer list, Mailchimp is free and contains useful tools like tracking and layouts.
Software for generating leads
Everyone wants to be known as the neighborhood’s go-to agent. By having your identity established online, you may break into even the most congested sectors using real estate technologies like lead-generating software.
Among the methods you may use to improve your web presence are:
- Zillow Premier Agent: This is the most effective strategy to boost your online visibility as a neighborhood agent. They are both free and paid solutions for staying in front of the correct audience, from building reviews to becoming visible and selling oneself.
- BoldLeads: Offers marketing automation and advertising, as well as capabilities that may help you uncover unique, unscrubbed buyer and seller leads.
- Placester: Provides agents with an IDX website that may assist them in establishing an internet presence as well as marketing highlighted properties.
Customer Relationship Management
The more sales you complete, the more delighted customers you’ll have, leading to a significant boost in recurring business and recommendations. Whether you’re just getting started or fostering your network, you need to remain on top of your communication to avoid prospective customers sliding through the gaps.
Conclusion
Real estate is a profession that values hard effort and experience, and real estate agent salaries reflect this. Agents with 16 years or more in the market had a median gross income of $86,500, according to the 2020 NAR study. You may, however, enhance your real estate agent compensation by employing the correct tools and methods.
While first real estate agent pay projections seem to be modest, the good news is that the ceiling provides limitless possibilities. Starting a real estate career might be one of the finest decisions you ever make, and Real Estate Express can help you get there. Online learning may happen virtually anywhere and fit into almost any schedule, giving you the flexibility to grow your income from the comfort of your own home.
Frequently Asked Questions
Do real estate agents get paid good money?
Real estate agents are typically paid a base salary and usually receive commissions from selling properties. The amount they make varies depending on the type of realtor that is employed, as well as market conditions at the time.
How much salary do real estate agents make?
The average salary for a real estate agent is $45,000/year.
