The short answer… $50,730 average annual salary (but, the possibilities are endless in real estate!)
The detailed version… This is a very broad question to answer, so we will have to break the question down a little more into specifics, as to cover everything. The median salary for a certified real estate agent is around $51,000 per year and depends on several factors, for instance, performance, location, competition, the average size of the houses you sell, and the experience you bring to the job. With that being said, it is fair to say that there is no median salary, and your ability to make more money really has no top out level. In most cases, a real estate agent’s salary is not really salaried; rather, it is based on commissions. What you make in commissions depends solely on how well you negotiate the sale of the house. Pay can also vary with how well the market is doing, along with supply and demand in the area the home is located.
What most people do not know is that real estate agents can have education all the way up to a master’s degree in real estate, which allows these people to get into other areas of the real estate business. You may be able with the extra education, qualify and break into areas of work like large residential development, portfolio, or asset management, along with areas like rental home management. Further education goes a long way to open up more options than you would have with the primary real estate licensing course.
Recommended Schools
You, as a real estate professional, may be paid as a 1099 employee, meaning that you are responsible for your taxes, social security, insurance cost for personal needs, errors and omissions insurance, your car, fuel, advertising material, and any other business expenses you may incur while doing your job as a real estate agent. So, with that being said, what you make on your gross pay is before deducting your business costs. You may look at this as bad; however, it really is best due to the fact that you may pay fewer taxes because with all the overhead cost… comes with some great tax breaks. If you are an ordinary W2 employee and paid by the hour, your employer would take all that directly out of your check. You will not find very many tax breaks if you are a W2 employee.
The commission paid to the real estate agent comes from a percentage of the sale of the house or property. The average commission is between five and six percent of the value of the sale. The percentage paid is split between the buyer and seller agents, and then again by the agent and the broker. Sometimes the commissions will be less depending on if there is any possible high competition in the housing market, and your brokerage has to compete for the customer base available. Some real estate brokerages will drive the percentage down into the lower numbers in bigger cities where home prices are higher.
What you make as a licensed realtor is not set in stone, and in the end, it all just comes back to you, your goals, and the choices that you make along the way. There is no limit as to what you can achieve as a professional licensed real estate agent.
Check out our picks for the Top Online Schools for Real Estate Programs!