Oh yes, the coveted real estate agent. We hear about them and talk about them all the time, but how much do real estate agents make in a year? Would you believe me if I said they make it as much as they want? Well, in all honesty, it’s quite a wide range and depends on how good they are at selling. A good chunk of them do you make six figures and up. What are the actual numbers though?
In this article, we will go over how much real estate agents really make, what it takes to become successful at it, and what the statistics actually tell us. Let’s Jump Right In.
How Much Do Real Estate Agents Make?
According to the Bureau of Labor Statistics, the average real estate agent earns $49,040 a year. 1 in10 real estate agents are in less than $23,000 per year, whereas another 1 in 10 real estate agents earn more than $110,000 a year. That’s quite a huge range!
Most real estate agents get paid on commission. Basically, this means that they earn most of their money when they sell a house. When a real estate agent helps a seller sell a house, the seller will pay the real estate agents 5% to 6% commission of the sale price. This commission is then split between the selling agent and the buying agent.
As an example, if a house sells for $300,000, then a 6% commission would be $18,000. This amount will then be split between the buying agent and the selling agent by half. Each agent within received $9,000 for the sale. If these agents average 15 houses in a year, they would earn $135,000 a year. Not bad.
How do I become a real estate agent?
Like any career choice, becoming a real estate agent requires time, money, and effort. The requirements in each state might also be different, so make sure you do your own legwork and figure out what your state requires:
1. Take a Prelicencing Course
Before you sit down and take an actual real estate license exam, you are also required to take a pre-licensing course. This is a general requirement across the United States. Depending on where you live, they are options like online classes, and actual real estate school, and classes at community colleges.
2. Take the Licensing Exam
Once you’ve taken and completed the pre-licensing course, you will then take the actual licensing exam. These exams are typically done online and cover your State’s real estate laws. Before you take this, make sure you study hard and study well. Nobody likes taking exams more than once 🙂
3. Submit your Real Estate License application
Now that you passed your licensing exam, congratulations! It’s now time to submit an application and send over any documentation you’re States realistic regulatory organization might need. Once your application is approved, your state will mail you your real estate license certificate.
When do you usually earn your first comission?
Once you become an agent and you’re in the game, it’s obviously natural to become impatient and wonder when your first commission will be. Unless you are an absolute natural, it can usually take a little time before a brand new agent makes their first Commission. Don’t get discouraged though.
Your first commission is usually the most significant. Once you have done that, you have success is on your back and can start earning referrals too. Business after the first commission almost always goes higher.
It’s also usually a good idea to start off working at a real estate agency. This will get you familiar with the processes, get a few connections, and learn the ropes. Starting off completely on your own might be a tad bit harder, but not impossible. This really depends on your own work ethic and goals. Feel free to do it either way 🙂
Unlike a typical nine-to-five job, you need to remember that being a real estate agent usually means you don’t have a base salary. If you don’t make a sale that month, you make no money. The trick here is to keep the houses moving!
Succeeding in real estate as a real estate agent is hard but not impossible. Like I mentioned earlier, 1 and 10 real estate agents earn more than $110,000 a year! If you want to be part of that 10%, you will need to kick some butt and take some names. You got this!