So, What is a Real Estate Agent’s Average Salary?
Many people choose to get into the real estate industry for the money, and as we’ve discussed many times before in Lab Coat Agents, there is absolutely nothing wrong with having money as a motive. That being said, we know that what you earn has a lot to do with what you’re willing to put in. Unlike other types of jobs, being a real estate agent, a Realtor, or broker, has no guaranteed salary.
And, aside from that, there can actually be a huge range for what professionals earn, depending on their experience, credentials, the market they are working in, and the time they invest. Agents should never compare themselves to one another, but if you’re looking to make more, it would be helpful to know where you stand in terms of you salary.
What Influences an Agent’s Salary?
There are agents, brokers, and Realtors. To start, remember that a Realtor is a designation. Not all agents and brokers are Realtors, and your salary may not have anything to do with whether or not you are a member of the NAR. While NAR members have the potential to earn more due to this designation, there are many different factors that can determine what a person in this industry is expected to take home.
The first factor refers to a person’s credentials. If you are a licensed real estate agent but you are not licensed as a broker, then there’s a good chance your salary will be lower than those who are more qualified on paper.
Next, is how many years you’ve been in business. Those who are new to real estate will likely make less than someone who has been doing it for more than a decade. This is not to say that those who are new can’t earn as much as someone with experience – they absolutely can.
But, this could also have a lot to do with where you are operating, too. According to Forbes, the pay gap between those working in the state that has the highest-earning real estate agents (New York) versus those working in the state that has the lowest-earning real estate agents (Ohio), was well over $50,000. Of course, these numbers are always fluctuating and what you earn is usually relative to the cost of living in that state.
Lastly, those who were putting in more hours – more productive hours, that is – had a higher salary than those who did not.
The Average Salary of Agents, Brokers, and Realtors
Based on the review by NAR, 54% of new Realtors – classified as someone who has been a member of NAR for less than two years – made less than $10,000, with a median gross income of $9,300 in 2018. Surprisingly enough, this is an actual increase from the year prior.
In general, the average median gross income of a Realtor was $41,000 in 2018.
Okay, so getting your NAR designation could mean more money, but not necessarily. The Bureau of Labor Statistics reported that the median annual wage for real estate agents was $48,690 in 2018. That is, of course, more than what the median income was for Realtors. Also, the College Investor says that “… the range in income is massive. One-tenth of real estate agents earned less than $23,000, and 10% earned more than $110,000.”
These numbers in no way assume that these agents have their NAR designation, so it’s worth nothing that their salary is, on average, about the same as those who do. Otherwise, there is not necessarily a correlation between the two.
Now, experienced Realtors are a different story, and it’s these numbers could be appealing appealing to those that are considering switching to this line of work and becoming a member. The National Association of Realtors 2019 Member Profile states that members with more than 16 years of experience made a gross median income of $71,000 in 2018. But, a real estate agent in Texas, for example – who may or may not have had a designation or this level of experience – made $72,480, on average according to Forbes.
And, what broker’s make? That number is even more variable, because it’s based on the agreements brokers make with their agents, and how well their agents do.
What we can gather from this is that a real estate agent’s salary does depend on those factors mentioned earlier. Being a Realtor does not, in any way, guarantee that you’ll make more, but it certainly doesn’t hurt to have this designation. Instead, it’s worth looking at the competition in your state to see where you stand and how you can make yourself stand out from the rest by investing in yourself, first.
How to Increase Your Salary
If you’re interested in increasing your salary as an agent, then there are a few things you can do. Keep in mind that this might be a bit of trial and error until you learn what it is that has really made a difference in your earnings:
- Take as many classes as you can, not just to move up in the industry, but to learn skills, make connections, and gather resources that can help you close more deals.
- If you’re an agent, negotiate the best deal you can with your brokerage. If you’re a broker, same goes for you (we understand the irony in this).
- Find ways to be more productive. The average agent is said to make 11 transactions a year. If you are doing less than this, see how you can bring up your numbers.
- Get a mentor.
- Referrals, referrals, referrals!
Things to Consider
There are plenty of agents that do this job simply because they like the flexibility of it and the extra income. In this industry, a lot of what you put in is what you get back. It’s also important to understand that when we talk about “gross income” we’re talking about how much an agent has earned on paper.
But, what doesn’t show, is how much an agent may have to invest in themselves to earn that salary to begin with. Many agents need to pay fees at their brokerage (for example, “desk fees”) or spend a lot of money on transportation, driving from place to place meeting with their clients and showing homes. So, take all of these points into account if you’re wondering how much your salary is an indicator of how you are doing an a real estate professional.
Lab Coat Agents has tons of tools and resources available to agents who want to step up their game and eventually, make a higher salary.