Licensed real estate agents have huge income potential. Investopedia published a median annual pay figure of $48,930 for 2019 as recorded and verified by the U.S. Bureau of Labor Statistics. The same report cited a median earnings figure for brokers of $59,720. It is important to remember that these median figures are much lower than what the top 10% of brokers and agents earned with agents in that elite category making more than $111,800 and brokers earning $178,720 or more in 2019.
How Much Time Will You Be Working?
The more time you put into real estate, the greater your earning potential. Not so surprisingly, part-time real estate agents earn considerably less on average than full-time agents.
Working 40 to 50 hours a week should generate income in the neighborhood of $68,000, while workaholics clocking 51 to 59 hours weekly can expect to top $85,000 annually. It is important to remember that these are estimates and are significantly impacted by the locale, training, and marketing dollars spent.
Granted, new real estate agents should expect to put in more hours at first as they learn the basics. Writing a tight contract and prospecting are important skills learned on the job through experience. As these skillsets become second nature over time, then real estate agents can work efficiently, getting better results in less time.
By signing up with a broker that has a reputation for being a good trainer for new agents, a new agent can more easily master the steep learning curve associated with starting a business. As an entrepreneur, agents are not employees. They must keep up with receipts, manage marketing expenses, and perfect marketing and negotiating strategies.
Where Do You Live?
Where a real estate agent lives and works determine to a large extent their income potential. As a commissioned-based business, the larger the sales price for a home, the more an agent earns. That’s why large, metropolitan areas provide fertile ground for larger commission checks.
It’s no secret that the real estate industry is a zip code business. Some real estate agents choose their marketplace accordingly.
While it is possible to make an excellent living in most geographic cities around the country, there is no denying the fact that some areas make it easier than others. Hot real estate markets share common characteristics. Appreciating sales prices that are linked to a tightening inventory of homes on the market often equates to a hot market. Forbes reports that when the bidding wars begin, then that market is considered to be on fire.
As of the writing of this article, Forbes published a list of the hottest housing markets based on Zillow’s data. Three of the best markets are Austin, TX, Stamford, CT, and Raleigh, NC. Agents capable of exploiting these hot markets would be wise to do so, since these cities represent more than a momentary uptick that is likely to wither with an economic shift or some other unexpected market change. These cities have been hot for years based on geography and economic opportunities.
Other cities currently occupying a spot on the hottest real estate list are Columbus, OH, Provo, UT, Boise City, ID, Phoenix, AZ, Salt Lake City, UT, Spokane, WA, and Tuscon, AZ. Successful real estate agents learn the ins and out of their target market. If you’re lucky enough to live in a top market or near one, your earnings opportunity will be greater.
What Type of Customers Will You Work With?
The real estate niche you choose will definitely impact your income since it varies significantly based on whether you work as a commercial or residential agent. Property management and affordable housing tend to pay less. Commercial and relocation specialty niches typically pay more.
There are a large number of niches ripe for prospecting. For Sale By Owner (FSBO) properties are one of those specialty markets. Many FSBO properties ultimately end up being listed by an agent once the seller realizes how complicated the home selling process is. Smart agents successfully market to this niche realizing great profits.
Vacation homes represent an excellent opportunity for agents living in or near these prime real estate areas. The challenge is to reach out to people searching for a getaway in your target area. The internet can be used as a tool for positioning yourself as the expert in your area.
By giving out free information, you can attract new customers. Find out where these customers are doing their research and give them what they need.
Are You Brand New or Do You Have Some Real Estate Experience?
Seasoned agents typically earn more on average than inexperienced agents. Real Estate Express reports that agents with several years of experience usually earn somewhere in the range of $60,000 to $80,000. New agents must be patient and recognize that like most professions, having experience translates into a higher paycheck.
One of the most obvious ways that seasoned agents bolster their income is through referrals and repeat customers. As a new agent, you won’t be benefitting from this attractive source of income. But imagine getting calls from satisfied buyers and sellers after working as an agent for seven or ten years. If you take care of your customers, they will continue to take care of you.
Another benefit of having experience is that you develop and perfect the skill of negotiating, prospecting, and time management. These crucial skills can make or break an agent. Once an agent masters them, income soars. Efficiency is rewarded with higher income.
One of the most exciting facts about becoming a real estate agent is the unlimited income potential. Few professions offer this upside. The key to success in real estate is to strategically approach the marketplace with your income goals in mind. Commit to the training and time it takes to build your network and real estate business.
Real Estate License Requirements by State
Pennsylvania Real Estate License Requirements
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Florida Real Estate License Requirements
Texas Real Estate License Requirements
Georgia Real Estate License Requirements