The path to becoming a real estate agent in New Jersey can lead to a significant earnings potential. While it’s a fulfilling career, the question many people ask is, “How much money can I make as a real estate agent?”
The average real estate agent salary in New Jersey can greatly vary based on multiple factors, such as your location, experience, skill set, and the property market’s condition.
In this How Much Does a Real Estate Agent Make in New Jersey guide, we will cover the earnings potential of real estate agents. By understanding New Jersey’s real estate pay structure and job-related expenses, you can make more informed decisions about your career path and financial goals.
Real Estate Agent Salary New Jersey
Several factors can influence the salary of a real estate agent in New Jersey. These include:
- Experience: Entry-level agents typically earn less than experienced agents with an average salary of around $67,850 per year. As agents build their clientele and develop their negotiation skills over time, their income can increase substantially to an average average salary of $86,616
- Sales Volume: Real estate agents primarily work on commission, meaning they earn a percentage of a property’s sale price. Their income can vary, depending on the price of the properties they sell and the number of transactions they complete
- Market Conditions: The health of the real estate market in New Jersey or in a specific area of the state can significantly affect an agent’s income. When the market is strong, there are more transactions and property prices tend to be higher
- Specialization: Agents who specialize in high-end or commercial properties often earn more than those who handle residential properties because these types of real estate typically sell for higher prices
- Work Hours: Real estate isn’t a typical 9-to-5 job. Agents who put in more hours might earn a higher income because they have more time to work with clients and close deals
- Location: Some parts of New Jersey have more expensive real estate than others. This can influence the price of the properties an agent sells and, ultimately, their income
Keep in mind that real estate agents’ earnings are often commission-based, which allows for greater earning potential. However, it also means income can fluctuate based on market conditions and an agent’s performance.
Interested in becoming a real estate agent? Check out our How to Get Your New Jersey Real Estate License guide.
Real estate agents typically earn their income through commissions on the sale of properties. This commission usually is a percentage of the property’s sale price.
In New Jersey, the standard real estate agent commission is approximately 5.13% with 2.63% going to the listing agent and the remaining 2.50% going to the buyer’s agent.
If you sell a house in New Jersey for $500,000, for example, you’d receive $25,650 as your standard agent commission for this example sale would be $25,650 that, ultimately, gets split between the listing agent (you) and the buyer’s agent. In this scenario, the listing agent would receive $13,150 and the buyer’s agent would receive $12,500 as their respective commissions.
You also may include brokerage fees, which typically range from 30% to 50% of the agent’s commission depending on the agreement price.
It’s important to note that while these are the average rates, commissions can vary somewhat from agent to agent. Most, however, charge rates close to the average.
Real estate agents in New Jersey should expect to pay several variable expenses, including:
- Licensing Fees: To become a real estate agent in New Jersey, you must first obtain your real estate license. Getting a license involves paying for your pre-license education course(s), exam fees, and application fees among other expenses
- Transaction-related Expenses: Agents may have to cover various expenses related to individual property transactions, including professional photography, home inspections, title searches, property surveys, and closing costs
- Marketing and Advertising Fees: Real estate agents often incur expenses for marketing and advertising their services. This can include posting online listings, building a professional website, using online paid ads, creating signage and brochures, and more
- Office and Administrative Costs: These expenses include rent for office space, utilities, office supplies, technology equipment, software licenses and/or subscriptions, and administrative staff salaries
- Professional Membership Dues: Real estate agents are typically members of professional organizations, such as the National Association of Realtors (NAR), that require annual membership fees
Your specific expenses may vary, depending on your business model, marketing strategies, and client needs. You should keep track of your expenses for tax purposes and to effectively manage your business finances.
How to Become a Real Estate Agent in New Jersey
To start a career as a real estate agent in New Jersey, you must complete the state’s licensing requirements.
Here are the common steps required to get your real estate license:
- Complete pre-license education. You’ll need to enroll in a New Jersey Real Estate Commission-approved pre-licensing education course. You must complete 75 hours of real estate education, which typically cover topics like real estate principles, practices, contracts, and laws.
- Pass the real estate salesperson exam. After completing your pre-licensing education, you must pass the New Jersey Real Estate Salesperson Exam. The exam, which consists of both national and state-specific sections, is administered by PSI Services LLC.
- Complete a background check. As part of the application process, you’ll undergo a criminal history background check.
- Submit a license application. Next, you must submit your application for a real estate salesperson license. Include any necessary documentation, such as proof of education and exam results, and payment of all applicable license fees.
- Obtain a broker sponsorship. Before you can practice as a real estate agent, you must be affiliated with a licensed real estate broker in New Jersey. Find a sponsoring broker who’ll oversee your real estate activities and provide guidance and support.
Obtaining your real estate license in New Jersey enables you to pursue your career as an agent legally and professionally. It opens numerous opportunities to help you succeed in the real estate industry.
For New Jersey real estate pre-licensing education classes, StateRequirement recommends:
Real Estate Agent Salary New Jersey FAQ
How much money do real estate agents make in New Jersey?
The average annual salary for real estate agents in New Jersey is around $86,616. However, this may vary widely based on factors like the agent’s location, education, certifications, sales skills, and years of experience in the profession. For more information, take a look at our How Much Does a Real Estate Agent Make article.
How long does it take to become a real estate agent in New Jersey?
The time it takes to complete the licensing requirements can vary.
For example, you can complete the required 75-hour real estate pre-license education course in a few weeks if you focus on it full-time. However, it may take longer if you take the courses on a part-time basis. The time needed to study for and pass the exam can also vary as can the time it takes to secure a sponsoring broker.
What is the highest-paid type of real estate agent in New Jersey?
In terms of specific roles, real estate brokers can potentially earn more than real estate agents. A real estate broker in New Jersey can expect to receive an average salary of $81,630 per year. These figures can vary widely based on location, experience, and commissions, so the number of transactions can affect overall earnings.
Is a career as a New Jersey real estate agent a good way to make money?
In New Jersey, real estate agents have a strong earnings potential, but their success and income can vary based on several factors. These include the number of transactions they complete, their commission rates, their location, their experience and expertise, and the market conditions.
How much does a new real estate agent make in New Jersey?
For entry-level real estate agents, the average annual pay is $67,850. For those in their first year, real estate agents can earn as much as $84,015 per year. New Jersey has a diverse and active real estate market with a range of residential and commercial properties that can provide opportunities for agents to earn significant commissions. See our How Much Does a Real Estate Agent Make in New Jersey article for more information.
Is it worth getting a real estate license in New Jersey?
Determining if it’s worth getting a real estate license in New Jersey will depend on your personal interests and career goals. You should consider several factors, such as the state’s licensing requirements, your income potential, and the market demand. You can do some research, speak with a real estate firm and professionals in the industry, and evaluate your own skills to make an informed decision.