If you’ve been kicking around the idea of becoming a real estate agent, you’ve probably been watching the housing market closely and wondering if now is the right time to jump in. You have the desire to help people find their dream home and the market is as hot as it’s ever been with no foreseeable end in sight. Does that mean the money will come easily? How much are real estate agents earning in this unprecedented market? Well, that’s a loaded question with some interesting answers. Here’s to shedding a little light on the subject:
ZipRecruiter reports that the average annual income for a realtor in 2021 is around $86,700 per year. A first year realtor can expect to make between $15,000 and $38,000. However, don’t let the lower first year income discourage you; it can take a couple of years to build up your business and the effort is well worth it. Average incomes across the country range from $52,000 to $100,000. Of course, realtors work on commission so earnings can go up or down depending on their hustle and the local market. Thanks to continued high demand, technology and the willingness of all parties involved to adapt to change during a pandemic, these numbers are holding firm and are expected to stay strong.
Location, Location, Location
According to Zillow, Georgia boasts one of the strongest economies where the average agent earns $71,241. Those in the big city of Atlanta average $79,649. Texas is one of the fastest growing states in the country with agents averaging $64,070. In the booming town of Austin, that average goes up to $73,529. Aging baby boomers seeking a warmer climate are fueling the Arizona market. Phoenix realtors are averaging $78,010 while statewide average is $50,640. It helps that the average home value across the country is now over $266,000 and they’re still selling like hotcakes!
Landing A Big One
The National Association of Realtors (NAR) reports that the average commission charged by agents is 6%. That’s a chunk of change considering the average price of a home in 2021 is $287,000! Even with a standard commission split between the buyer’s and seller’s agents, a single agent could earn over $8,600 on the home sale after the broker’s split. Now consider this: On the high end of the market, a homeowner who sells a penthouse in downtown Dallas or a mansion in River Oaks for $10 million could potentially be writing a fat commission check for around $500,000! Wowza!
Sharing The Wealth
While selling homes can be lucrative, real estate agents need to be aware of commission splits. The typical 6% commission fee is split in half between the listing and selling brokers with each brokerage company (representing the listing and buyer’s agent) receiving around 3% commission. Additionally, the agent’s personal broker also gets a cut. But don’t let commission splits dissuade you from becoming a real estate agent. Real estate agents will always be the best source for buying and selling homes.
You can learn the real estate business and obtain a real estate license in just a few months. Pre-licensing classes, exams and licensing fees vary in each state. Check out LicenseClassroom.com for more information.