If you’re considering a career as a real estate professional in Iowa, you’re likely wondering about your earning potential. Iowa’s real estate market offers unique opportunities and varying compensation structures.

So, How Much Does a Real Estate Agent Make in Iowa exactly? In this comprehensive guide, we cover the average real estate agent salary in Iowa as well as the underlying factors that determine what you might expect to earn in this dynamic and competitive industry.

Real Estate Agent Salary Iowa

Real estate agents’ salaries can vary greatly, depending on a range of factors. Here are some key factors that might affect an agent’s salary in Iowa or any other state:

• Experience: The average salary of a real estate agent in Iowa is $75,717 per year. An experienced agent who’s spent years in the field often can earn a higher salary or commission rate compared to a new agent
• Location: The region or city in which an agent works also can significantly impact their income. More prosperous areas — or those with a robust real estate market — may result in higher commissions that thereby increase an agent’s overall income
• Market Conditions: In a strong housing market with high demand and prices, an agent likely will earn more because of higher commissions from their sales. Conversely, a period of fewer sales and lower prices can reduce an agent’s income
• Sales Volume: Real estate agents typically get paid on commission by their broker companies. Therefore, they can make more money when they sell more properties
• Specialization: Some areas of real estate might offer higher potential earnings than others. For example, an agent who specializes in commercial properties, luxury properties, or certain niche markets may be able to earn more
• Working Hours: A career in real estate often can require working outside of traditional business hours. Those willing to work longer or irregular hours might have the opportunity to complete more sales and thereby increase their income

In this primarily commission-based business, real estate agents’ incomes often vary greatly from year to year and even among real estate agents within the same region or brokerage firm.

Understanding Commissions

Real estate agents are paid on commission, which means their income is based on the sales they make. In Iowa, like most places in the United States, the typical commission rate for a real estate transaction is between 5% and 6% of the property’s selling price. This rate can vary, though, and is negotiable.

The buyer’s and seller’s agents usually split the commission with each receiving around 2.5% to 3% of a property’s sale price. Each agent may then split their share of a commission further with their brokerage company. Their agreement with their broker can range from a 50-50 split to a 70-30 split in favor of the agent — or even higher for experienced agents.

If a house sells for $300,000 with a commission rate of 6%, for example, the total commission for the transaction would be $18,000. If the buyer’s and seller’s agents then split this commission equally, each would receive $9,000.

If one of the agents works under a broker with a 70-30 commission split, that agent would keep 70% of the $9,000 ($6,300) while their broker would receive the remaining 30% ($2,700).

Remember, most real estate agents also have expenses like licensing fees, association dues, marketing costs, and more. They’ll need to deduct these expenses from their commission income to calculate their take-home pay.

Variable Expenses

Real estate agents often manage a variety of expenses in their line of work, including:

• Licensing Fees: Agents must take continuing education courses and renew their licenses periodically. These costs can vary from year to year
• Professional Dues: Agents often join local, state, and national real estate associations that typically charge annual membership dues
• Office Expenses: While some agents may work in an office provided by their brokerage firm, others may maintain their own office space. This can lead to costs for rent, utilities, office supplies, and office equipment
• Technology Costs: This can include costs for maintaining and updating technology tools like customer relationship management (CRM) software, multiple listing service (MLS) access, virtual tour software, digital signature platforms, and more
• Marketing and Advertising Fees: This can include costs associated with listing properties, conducting open houses, preparing marketing materials like brochures or flyers, maintaining a professional website, and running advertising campaigns on social media or other platforms.

These costs can vary, depending on the volume and type of transactions an agent handles, their marketing approach, and the structure of their business. It’s crucial that agents keep careful track of these expenses for budgeting and tax purposes.

How to Become a Real Estate Agent in Iowa

Becoming a real estate agent in Iowa involves a process mandated by the Iowa Real Estate Commission. Here are the general steps you’ll need to take to get your real estate license:

1. Complete pre-licensing education. You must complete 60 hours of pre-licensing coursework approved by the Iowa Real Estate Commission. This includes a 36-hour course on “Real Estate Principles and Practices” and a 24-hour course on “Real Estate Law.”
2. Pass the licensing exam. After completing the required pre-licensing coursework, you must pass the Iowa real estate salesperson exam. Administered by a third-party testing service called PSI, the exam has a national section and a state-specific section. You’ll need to pass both sections to be eligible for licensure.
3. Submit your license application. After you pass the exam, you’ll have 12 months in which to apply for your real estate salesperson license through the Iowa Professional Licensing Bureau. The application process includes submitting fingerprints for a criminal history check.
4. Get a fingerprint-based background check. The Iowa Real Estate Commission requires that all applicants undergo a background check before they may become a licensed agent in Iowa.
5. Obtain errors and omissions (E&O) insurance. As part of the license application, licensees must provide proof of uninterrupted E&O coverage in Iowa.
6. Find a sponsoring broker. You’ll need a licensed Iowa real estate broker to sponsor you before you can activate your license. This broker will guide you as you start your real estate practice and supervise your real estate activities.
7. Complete post-licensing education. Within 12 months of receiving an active license, new salespersons must complete a 36-hour, post-licensing curriculum.

Obtaining a real estate license is crucial because it legally authorizes you to represent buyers and sellers in real estate transactions. It also will ensure you comply with state laws and regulations in Iowa.