How Much Does a Real Estate Agent Make?
A high-earning career as a real estate agent is hard work. But for those motivated to do well, real estate can be a very lucrative path. How do the top agents earn high commissions? The real-life earnings of real estate agents depends a lot on an agent’s knowledge and motivation. Finding the right housing market, studying and learning the business, and building your network can all put you on the path to becoming a top real estate agent.
What Is the Average Salary of a Real Estate Agent?
According to the Bureau of Labor Statistics, the average real estate sales agent makes $48,930 annually. Real estate agent salary varies from state-to-state and even from year-to-year. Part-time real estate agent salary tends to be lower, often around $23,600. Agents specializing in luxury home markets can earn $178,720 or more each year.
Most real estate agents work on commission. This means that real estate agents receive a percentage of the overall purchase price of each home that they work to buy or sell. Higher home prices mean higher commissions and earnings for real estate agents.
The cost to become a real estate agent is not very high, with the majority of expenses coming from pre-licensing education, the real estate license exam, and the application fee. If you are already working as an assistant or administrator, your company may even cover some of these costs.
Become a Real Estate Agent
Interested in becoming a real estate agent? Learn more about getting your real estate license and becoming a real estate agent in your state with our free guide:
Certain times of year are busier for real estate agents, such as the summer when families are more likely to move. Their earnings can be significantly higher during these months than in slower times of the year. Experienced agents recommend that all real estate agents plan for this fluctuation in their pay, keeping savings aside for the leaner times.
Talk to a top agent in your area or company about their path. While they may not want to share their earnings information, most are happy to provide advice and tips on how to grow as a real estate professional.
State-by-State Real Estate Agent Salary
See what you can expect to make as a real estate agent in your state, according to data reported by working agents on Indeed and ZipRecruiter. A new agent is defined as someone with one or two years of experience, while an experienced agent is someone who has been working in the real estate industry for ten years or more.
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Where Do Real Estate Agents Make the Most Money?
As expected, the top earning real estate agents work in the cities and states with the highest home prices. The top states include Hawaii ($104,731) and California ($98,489). Large metropolitan areas and desirable destinations can all drive area home prices up.
Specific cities within some states have much higher real estate markets than the more rural or suburban areas. For example, real estate agents in New York City make significantly more than those working in rural areas of upstate New York. The competition in these high-earning areas can be greater, as well.
Keep in mind that the requirements to become a licensed real estate agent are state-dependent. You may find that the licensing fees, education requirements, or other aspects of the licensing process to become a real estate agent are more expensive in some areas.
Commercial real estate commissions can be a lower percentage of the overall sale but often result in higher paychecks per sale due to the higher purchase prices of commercial real estate. Just like luxury homes, commercial real estate is a niche market that you can specialize in if you enjoy buying and selling commercial properties.
How To Make the Most of Your Real Estate Career
The first step on your path to becoming a real estate agent is passing the real estate license exam and applying for your license. You will also need to work under a broker, someone who has more experience and an advanced broker’s license.
Increase Your Real Estate Agent Salary
Your paycheck usually increases with your experience as a real estate agent. This can be due to a few factors.
- Increased Knowledge: The more you work with clients and other real estate professionals, the more you learn about the real estate industry. You will also become more proficient at the paperwork and process of buying and selling homes. All of these can lead to more sales, and therefore, increased earnings.
- Broader Network: Many real estate agents rely on referrals from happy clients to get new business. Everytime you interact with a client, it is an opportunity to build your network. If you make buying or selling their home a good experience, they will be more likely to recommend you to their friends and family. This means more business and earnings for you.
- Leading a Team: Some experienced real estate agents eventually go on to lead teams of agents in their area. There are a variety of ways that this can be done, but it often includes a percentage or fee back to the lead agent for their expertise, leadership, and reputation.
- Offer More Services: Look for additional career opportunities. Some real estate agents also act as property managers for rental properties or project managers for investment projects. The workload and pay structure is different in each area but is generally a percentage of the monthly rent or overall property rehabilitation budget.
Real Estate Broker Vs. Agent Salary
After getting some experience and taking advanced courses, a real estate agent can apply for a broker’s license. As a real estate broker, you can work independently in your own business or as part of a larger national or state company. Many brokers even hire real estate agents to work on their team.
Real estate brokers generally make more on average than a real estate sales agent. If you want to maximize your earning potential, you can get licensed as a real estate broker. The average salary for a real estate broker is $59,720 annually. Real estate agents average $48,930 per year. For both career paths, the area home prices can change those earnings.
If you decide to open your own real estate brokerage, you will need to cover other business expenses, such as advertising, a business license, and office space. These additional items can be expensive, but the higher salary of a real estate broker may still make it worth the cost.
Becoming a Top-Earning Real Estate Agent
The best way to become in the top tier of real estate agent salaries is to work hard and become a respected expert in your local area. You can also take on additional responsibilities, such as property management, leading a team, or becoming a broker. The knowledge and network that you grow over time will translate to a higher salary and a successful career in real estate.
Information on this page has been gathered by a multitude of sources and was most recently updated on January 2021.
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