If you love houses and working with people, becoming a real estate agent might be right for you. However, you may wonder what the salary of a real estate agent is and whether it is enough. That’s why we have put together this guide to help you understand what real estate agents get paid.
How much does the average real estate agent make in their first year?
What real estate agents get paid will depend on a number of individual factors and considerations. The state you are working in, the broker you work for and other important circumstances will make all the difference. Because of this, you will want to understand exactly what you need in order to get by in today’s economy.
There will always be differences in what someone will make when starting a new career. It is best if you have in mind what you would like to get paid and use that as a touchstone. This way, you can set goals every year and try to meet them in accordance to your needs.
On average, the salary of a real estate agent is around $59,000 per year. It is important to note that this is an average and will not necessarily be exactly what you make. The bottom 20% of agents make closer to $27,000 and the top 20% make around $129,000.
How much is a real estate agents commission?
One of the reasons that real estate agents get paid such a varied salary is that they work on commission. This means that you will get a percentage of the sale price of the home when you close a sale. For this reason, a real estate agent must be a good salesperson as well as have interpersonal skills.
Since home prices vary so widely depending on the state and on the housing market, the numbers can change. Some housing markets are much more profitable and lucrative than others. For example, an apartment sale in Manhattan is going to net you more money than a home sale in Alabama.
However, on average, a real estate agents commission will be the same no matter what. Most real estate agents will charge a 6% commission on any sale regardless of where the sale is made. Because of this, the higher the sale price of the property, the more money you can make as an agent.
What percentage does a real estate agent get?
This 6% commission is by far the most common percentage that real estate agents get paid. However, it is not a strict number that is set in stone and can’t be deviated from at all. Many real estate agents will make certain concessions depending on the situation.
Some agents will accept a lower commission if there is a reason for them to do so. If, for example, the asking price of the home or property is incredibly high and could be lucrative. Many agents will adjust their fee for the opportunity to sell this property and potentially make more money.
In cases like this, agents may adjust their fees to 5% or even 4% to get the sale. This is something that only you can decide when the time comes and is not standardized. If you stand to make more money from a sale by adjusting the fee, it is up to you to make that decision.
How do real estate agents get paid?
In general, there will be more people involved in a real estate transaction than just yourself. In that case, the commission that is made on the sale will have to be divided up between the participants. The 6% commission does not all go to you as a real estate agent.
In most states, real estate agents have to work under the umbrella of a brokerage when they are first starting. Because of this, you will have to split the commission with the brokerage you work for. This is usually done as a 60/40 split with the agent getting the 60% and the broker getting the 40%.
Most buyers will also have a listing agent and a listing broker as well. The commission will also have to be split with these entities. Usually, the transaction will be split 50/50 between the listing entities and the buying entities. This splits the commission up four ways at the end of the transaction.
Who pays a real estate agent?
The seller of the home will almost always be the one who pays the salary of a real estate agent. The commission comes out of the sale price of the home and is then split up between all entities. This is the 6% fee that is agreed upon by everyone before the sale begins.
Most sellers will build the price of the real estate agents commission into the price of the home. That way, they do not get left with the cost of the commission at the end of the transaction. This allows the seller to not worry about the agent’s commission throughout the process.
The commission being built into the asking price also motivates all the realtors involved. Since agents get paid on commission, they will be much more inclined to sell a home that includes their fee. This is one of the benefits of commission-based selling that many agents find to be exciting and interesting.
Do you get paid hourly as a real estate agent?
Because of the commission-based compensation, the salary of a real estate agent is not hourly. Depending on what your needs are for a career, this could either be good or bad. Many agents feel that this kind of compensation makes them more competitive and driven.
Because real estate agents do not get paid by the hour, there are more chances for them to make money. When you get paid hourly, you are bound to the schedule and can only make more by working more hours. Real estate agents are not locked into a schedule and have more flexibility.
This kind of compensation makes it so that there is no limit to how much money you can make. However, if you are someone who prefers to have the stability, it may not be the job for you. Real estate agents are generally competitive people who are very self-motivated because of this model.
How much does a commercial real estate agent make?
Commercial real estate agents are realtors who deal with business facilities rather than homes. This is a completely different set of skills and requires a different mindset than a residential realtor. It is less people-based and will require more business savvy on your end.
Commercial real estate agents also tend to make more money than residential realtors. Because commercial real estate has a much higher price point, your commission will be higher. This is where it pays to take a percentage of the sale price as opposed to an hourly wage.
The salary of a real estate agent for commercial property will, of course, vary by the state. However, on a national average, commercial real estate agents make around $75,000 per year. This is higher than the average for a residential agent, which is why many realtors want to become commercial agents.
How much does a real estate agent make in Texas?
Texas is quickly becoming one of the most sought after states to live in the United States. With many technology companies moving their headquarters to the state, there are more opportunities every day. This makes the state a great place to get started as a new real estate agent.
According to the Bureau of Labor Statistics, the average salary of a real estate agent in Texas is $65,000. Since this is just the average, the actual numbers will vary depending on which city you work in. Many of the bigger metro areas will be more lucrative than the smaller, more rural counties and cities.
While this is the current average salary of a real estate agent in Texas, it is always changing. With so many people migrating to the state, there are more chances for lucrative work every day. This average could very well skyrocket within the next couple of years.
How much does a real estate agent make in California?
California has always been a real estate agent’s dream as far as opportunities go. With an expensive housing market, the commissions that a realtor could earn are almost limitless. Someone with the right connections and the right skills could easily make a very good living.
However, many of the large tech companies that California is known for have been leaving the state. This makes it difficult to assess just how lucrative it will remain in the future with this exodus of commerce. With so many large cities, though, it is reasonable to assume the market will always have some major opportunities available.
The average salary of a real estate agent in California is around $70,000 per year. While this is projected to grow 3% yearly, it’s hard to say whether or not the market will remain growth-oriented. With the high cost-of-living in the state, it might not be as profitable as it once was.
How much does a real estate agent make in New York City?
New York City is one of the crown jewels for a real estate agent as far as money goes. With a high cost of living and a high-end market, the opportunities are limitless. The commissions you could make are incredibly high just based on the housing market alone.
However, New York City is an incredibly competitive place for nearly any occupation. This is especially true for someone trying to break into the real estate market. It will be important that you have some connections and know how to network in the city.
In New York City, real estate agents get paid, on average, $90,000 per year. While this is quite a bit, it is important to remember just how expensive the cost of living is in the city. This should be taken into consideration before deciding to try and break into that market.
How much does a real estate agent make in Florida?
Florida is another great example of a state that is always growing and making more opportunities. The fact that it has so many attractions and is desirable as a retirement state makes it profitable for realtors. This growth can translate into much higher real estate agents commissions.
The average salary of a real estate agent in Florida is around $85,000 per year. Because of this, many agents work in Florida and to capitalize on the growth and desirable weather. Any time a state is popular with retirees, realtors stand to make more money there on commissions.
How long does it take to become a millionaire in real estate?
Only 5% of American households contain someone who has made a million dollars. When you consider this statistic, it can be a little discouraging if that amount is your end goal. However, it is still possible and is not completely out of reach for most people.
The thing that is most attractive about being a real estate agent is that there is no cap to your income. Unlike with an hourly job, your income is limited only by your success and not your hours. If you have the right connections and networking abilities, you could potentially make a million dollars.
For most people, it takes upwards of ten years to become a millionaire. However, there have been people who have made that much within just two years. If you are motivated enough and have the right opportunities, you could be one of the latter. It all depends on your drive and dedication to the business.
How can I make a lot of money in real estate?
The best way to make a lot of money in real estate is to work in a market that is expensive. Since agents make money based on commissions of sales, the higher the price of the house, the more your commissions are. By working in a lucrative market, your salary will go up as well.
Making a lot of money in real estate is also dependent on working with a seasoned broker. Brokerages can help get you the opportunities necessary to make those higher commissions. They can act as your connection to the market and your success could be dependent on them.
Can real estate make you rich?
If you are someone who can network and likes to work with people, real estate can make you rich. However, what “rich” means to you could be different than what it is to someone else. This will all depend on the cost of living where you reside and other factors like your expenses.
If you have a lot of determination and drive, real estate could be a lucrative business. The thing that makes it so attractive is its lack of a ceiling of income. The amount you make is limited only by your work ethic, opportunities and, sometimes, luck.
Who is the richest real estate agent?
Los Angeles real estate agent Aaron Kirman is the richest and most successful real estate agent. He has sold over 6 billion dollars worth of properties in his career. Because of this, he brings in over seven figures every year and has enjoyed tremendous success.
Part of Kirman’s success is rooted in the fact that he works in Los Angeles. There are many opportunities there to sell high-dollar properties and make big commissions. This factor alone dictates his income and could be a deciding factor in your own.
There is no secret to Kirman’s success. He has been dedicated and driven, and he networks with the right people and makes the right connections. These are the reasons many people get into the industry and they could work well for you as well.