If you’re considering getting into real estate, there are a few things to consider beforehand.
But if you’re interested in the industry and are curious about how much money an agent makes, the truth is that it varies.
The first thing is to understand what real estate agents do, which is they help individuals buy and sell homes, commercial property, and other types of land.
Agents act as intermediaries between buyers and sellers to ensure that transactions are legal and fair and benefit both parties.
Once you have an idea of what real estate agents do, you next must understand that there is a process you need to go about to get licensed and active in assisting clients and their real estate needs.
Getting Started As A Real Estate Agent
Getting started is fairly easy. You’ll want to check with your state’s regulatory commission, as each state has its own set of guidelines. Still, the process generally includes taking some accredited courses, passing a state licensing exam, joining a broker, and signing up for the local MLS board.
Education: Take an accredited course and pass so that you’re cleared to take the state license exam. To pass, you’ll be required to take anywhere between 40-150 hours of instruction to be cleared to sign up for the exam.
Take the test: Sign-up and take your state’s licensing exam. Expect to pay between $50-100 to register and take the exam.
Choose a broker: After you pass your exam, choose a broker to hang your license with. “Hanging your license” is jargon for working with and representing the broker in any real estate transaction.
Join your local MLS board: The MLS or multiple listing service is a board that provides marketing for all available and off-market real estate in your area. It’s the lifeblood of knowing what homes are for sale, how long it’s been on the market, and their past sale history.
How Real Estate Agents Get Paid
For most agents, you work as an independent contractor, meaning you are your boss and business operating under the broker. You’ll get paid by commission, and from that gross commission income (GCI), you’ll pay your split to the broker and whatever other costs you may have.
In some cases, agents are paid a small salary and get bonuses based on performance. Still, in those situations, you’re technically an independent contractor, but the setup is like that of an employee.
So, once you’re licensed and active, understand that making your first commission will take some time.
Of course, some people get a sale immediately. Still, the industry standard is about 6 months, so you need to create a system that can accelerate your opportunities and earn your commission faster.
There are ways that real estate agents can earn more than just their base salary.
For example, in some cases, they may receive commissions from sales or leases of properties, as well as bonuses for meeting specific goals or quotas.
Additionally, some real estate agents may be able to negotiate higher commission splits or salaries with their employers depending on their experience and qualifications.
Finally, a real estate agent really has the hustle and drive. In that case, there’s the potential to increase their income by working additional hours or taking on extra projects outside of their regular duties.
Becoming a real estate agent can be a lucrative career choice depending on where you live and how much effort you put into work.
How Much Can A Real Estate Agent Make
Like all businesses, real estate agents have a wide variety in their income range and potential.
In some parts of the United States, they are highly sought-after professionals who can expect to make a good salary, with the average base salary for an experienced real estate agent running between $84,459-$95,603 per year.
For new agents, it’s estimated they make an average of $42,600 the first year depending on location.
One hack to consider is to get a mentor or coach to help you with your real estate business. A mentor can show you systems they’ve used that have worked for them, while a coach can help you set achievable goals, keep you accountable, and help you organize your business to its greatest potential.
What Do Real Estate Agents Do
Real estate agents are responsible for helping people buy and sell properties.
They work with clients to determine their needs, show them properties, negotiate deals, schedule inspections, and repairs, and handle the paperwork.
The amount of money a real estate agent makes depends on several factors, including experience level, location, and the type of property sold or bought.
Experienced agents specializing in high-end properties can earn significantly more than those focusing on lower-priced homes. Additionally, agents who work in large metropolitan areas tend to make more money than those who work in smaller towns or rural areas. Real estate agents also can earn additional income through commissions and bonuses from successful sales.
The amount of money real estate agents make each year depends on several factors, including how many transactions they complete, what commissions they bring in, and how much of that commission is split with their sponsoring broker.
Due to larger commissions, agents who work in higher-end markets may earn more than those who work in lower-priced areas.
Additionally, agents specializing in specific properties—such as luxury homes or commercial properties—may command higher fees than those focusing on residential sales alone.
Ultimately, how much money an agent makes depends mainly on their experience level and market conditions. Therefore, it’s vital to get organized and have systems in place to help you achieve your salary goals for the short-term and the long-term of your business.
