Many aspiring real estate agents wonder about their income potential in Kentucky’s lucrative real estate industry. This article will discuss the key factors that can influence the average real estate agent salary in Kentucky — from experience level to market conditions.
Whether you’re considering a career as a real estate agent or simply curious about the financial aspects of the industry in Kentucky, this How Much Does a Real Estate Agent Make in Kentucky guide explores the earning potential for agents in the “Bluegrass State.”
Recommended: Interested in getting started? We recommend The CE Shop’s online study packages, which come with a money-back-guarantee and flexible pricing.
Real Estate Agent Salary Kentucky
The average salary of a real estate agent can vary greatly based on a number of factors, including:
- Experience: The average salary of a real estate agent in Kentucky is $79,193 per year. More experienced real estate agents often earn higher salaries than entry-level agents
- Location: Certain parts of Kentucky may offer higher average salaries because they have a more active real estate market, higher average home prices, and/or a higher cost of living
- Transaction Volume: Because many real estate agents get paid on commission, the number of transactions they complete in a year can greatly impact their income
- Market Conditions: In a seller’s market, where demand exceeds supply, agents might close deals more quickly and at higher prices. In a buyer’s market, where supply exceeds demand, agents might find it more challenging to close deals and may need to lower their commission rates to attract business
- Specialization: Agents who specialize in certain types of real estate, such as luxury homes or commercial real estate, may be able to earn a higher commission if these properties are in high demand
The exact impact of these factors can vary for each individual agent and depend on many other variables. Real estate agents often face periods of boom and bust along with the property market so their income can fluctuate significantly from year to year.
Interested in becoming a real estate agent? Check out our How to Get Your Kentucky Real Estate License guide.
Real estate agents primarily earn their income through commissions — a percentage of the final sale price of the properties they help their clients sell or buy.
The typical commission rate is around 5% to 6% of a property’s sale price, but this can vary. The seller’s agent and the buyer’s agent usually split the commission between them.
If a home sells for $300,000 and the agreed-upon commission rate is 6%, for example, the commission would total $18,000. If the buyer’s and seller’s agents split that commission equally, each would receive $9,000 before any splits with their respective brokerage firms.
Most agents work under a broker with whom they share a portion of their commissions. This split can vary, depending on an agent’s agreement with their broker. If a new agent has a 50-50 split with their broker, they’d keep $4,500 from the $9,000 commission in the above example. An experienced agent might have a more favorable split, such as 70-30, so would keep $6,300 of a $9,000 commission.
Agents often incur additional expenses related to their work, such as marketing costs, licensing fees, and more. As a result, a real estate agent’s net income may be quite a bit lower than their gross commission earnings.
A real estate agent’s income isn’t solely profit because a range of business expenses can significantly impact their net income. Here are some common costs real estate agents may need to cover:
- Licensing Fees: Real estate agents must obtain a license from the state in which they operate. This requires passing an exam and maintaining the license through continuing education. Both the initial licensing process and continuing education courses come with fees
- Marketing and Advertising Costs: From listing properties online and hosting open houses to getting professional photographs taken, printing flyers, advertising their services online or in local media, and maintaining a professional website, an agent’s marketing expenses can add up quickly
- Professional Association Dues: Many agents belong to local, state, and national real estate associations — all of which charge annual membership dues
- Office Supplies and Technology Costs: These can include a smartphone, a laptop or desktop computer, customer relationship management (CRM) software, office stationery, a printer, and more. If an agent works from home, they could have expenses related to setting up and maintaining a home office (e.g., furniture, utilities, or even a portion of their mortgage or rent)
While these expenses can reduce a real estate sales agent’s overall income, agents can write off many of them as business expenses for tax purposes and potentially reduce their tax liability.
How to Become a Real Estate Agent in Kentucky
To become a real estate agent in Kentucky, you’ll need to meet specific requirements and take several steps. Here are the basic steps required to obtain a real estate license in this state:
- Complete pre-licensing education. To start, you must complete 96 hours of pre-licensing education from an approved real estate school. This coursework will cover topics like real estate law, the principles of real estate, and other necessary knowledge for real estate professionals.
- Pass the Kentucky real estate sales associate exam. Once you complete your pre-licensing coursework, you’ll need to pass the Kentucky real estate sales associate exam. This exam includes two sections: a national section that covers general real estate principles and practices and a state-specific section that covers Kentucky real estate laws and regulations.
- Get a fingerprint-based background check. The Kentucky Real Estate Commission (KREC) requires all applicants to undergo a background check before they can apply for a license in the state.
- Apply for your license. After passing the exam and your background check, it’s time to submit your license application to the KREC. You’ll also need to pay the licensing fee at this time.
- Find a sponsoring broker. You must be sponsored by an actively licensed Kentucky broker to legally work as an agent in the state. This more experienced real estate professional will supervise and mentor you as you navigate your new career.
- Complete post-licensing education. Kentucky also requires new real estate agents to complete post-licensing education within two years of obtaining their license. This additional training ensures new agents feel well-prepared to handle the challenges of their profession.
Obtaining a real estate license in Kentucky is crucial because it’s a legal requirement for conducting property transactions. It also assures clients of your professional competence and compliance with state regulations.
For Kentucky real estate pre-licensing education classes, StateRequirement recommends:
Real Estate Agent Salary Kentucky FAQ
How much do Kentucky real estate agents make?
The average salary for real estate agents in Kentucky varies, but is currently around $79,193 annually. An agent’s income can fluctuate significantly based on factors like their location, experience, and the number and type of transactions they complete. Learn more about real estate agent salaries by reading our How Much Does a Real Estate Agent Make article.
How much is a real estate agent license in Kentucky?
Getting licensed as a real estate agent in Kentucky involves several costs. For example, the pre-licensing education course costs between $349 and $679, fingerprinting is $10, the background check will cost $18 (FBI) or $33.35 (Kentucky State Police), the real estate exam fee is $100, and the license application fee is $130.
What does it take to be a real estate agent in Kentucky?
To become a real estate agent in Kentucky, you must be at least 18 years old, complete 96 hours of pre-licensing education, pass the state licensing exam, submit a license application, and obtain sponsorship from a licensed Kentucky broker. The state also requires new agents to complete post-licensing education within two years of their initial licensure.
Do you need a real estate license in Kentucky?
Yes. A Kentucky real estate license is required to facilitate real estate transactions like buying, selling, or leasing properties for others. It ensures you have the necessary training and adhere to state regulations, providing clients with confidence in your professionalism and expertise.
Are there expenses that can impact a real estate agent’s net income?
Yes. Real estate agents often have to cover a number of work-related expenses that can impact their net income. Some common examples include licensing and education costs, marketing fees, transportation costs, professional association dues, broker fees, technology and office expenses, and even insurance costs (e.g., errors and omissions policies).