REAL salary numbers for Agents?

Question

Hello everyone,

I'm considering pursuing a career as a real estate agent, and would like to have existing agents chime in if you could! I've read many books and watched countless videos on the experiences and challenges of the industry, but always seem to find the same Google answer when trying to get a general idea of what to expect salary-wise the first, second, or third year as an agent. According to salary.com, agents earn an average salary of $36,000 (USD) per year. But this includes all info from all levels of experiences, and includes both full-time and part-time agents (making the info very vague!).

I was hoping some people could leave some feedback on what to expect income-wise my first, second, and third years as an agent. Let's assume I am working 40 hours a week, and I'm in a pretty big market (Atlanta). I'm NOT asking people for exactly what they earn each year, just some ranges perhaps on what to expect!

Thanks in advance!

Joel Owens · Answer

New agents OVER VALUE themselves.

Dany Namou said: "As a new agent, I would't mind trading a higher commission split for more training/coaching/support. However, I would not stay there too long after I learn the ropes."

This is EXACTLY why brokers put new agents on a 50/50 split the first so many deals. They will need tons of training and then eventually leave to go somewhere else with better splits or try to renegotiate down the road when they are a proven performer. Only a small percent make it past the first year so brokers want to make the money off of the new agents NOW before they peter out.

Brokers were once new agents! lol

I was about 14 years ago. You don't think brokers do not know what runs through newly licensed agents heads? It's like a white belt in karate trying to put moves on a 6th degree black belt. Brokers know what new agents are going to say before they say it. If your new that knowledge that you are learning is worth a lot of money from the brokers experience especially someone highly successful.

I saw this last time in a hot market. Every new agent thinking they are a gift to the broker etc............. :  )

I don't have agents by choice at my commercial firm these days. I like working one on one with my clients.

On the residential side lot's of drama. For every 50 agents you babysit maybe 10 to 15% are closing something a month. On a per transaction fee the broker before expenses might make 5,000 or 6,000 a month. Back away business costs before taxes and it is much less. The rest of the agents are rusty as they never hardly close a deal maybe a few a year. The real estate commission sends letters for agents to the brokerage that their license is being suspended for back child support, student loan debt, not doing continuing education requirements, not paying license renewal fees, IRS request for brokerage to send agents portion to them for back taxes owed etc.

Lot's of babysitting and drama with life issues for these newer agents. They tend to not have money and trying to make it on a shoe string budget.

I enjoy the simple and fun life these days but after 14 years I have earned it. Good luck. Hope you Ron Turner finds a good fit.

Joel Owens · Answer

Yes that number is about right for many.

The number is skewed lower by investors who only occasionally make a sale, retirees who do a few deals a year for mad money, and part time agents who work another job and do real estate on the side.

First year in 80% of new agents do not survive and leave the business. Of those that survive the 1 st year by year 5 about only 20% of them remaining survive.

First 1 to 3 years is about 80% prospecting and 20% referral, 4 to 7 years is about 50% prospecting and 50% referral, years 8 to 10 and on is about 70 to 80% referrals and 20 to 30% prospecting. These numbers are based on if you market right and grow your brand. Being at whatever brokerage isn't going to make you successful. It's also not about working 40 hours a week. I have seen people before work 20 hours a week but get in 100 hours of work versus someone working 40 but really taking fluff out they have 15 hours of productivity.

If you are in residential plan on long nights and weekends and working with first time home buyers to get started. Owners with listings when your new do not like to usually give you business when inexperienced.

Some new agents join a team or work for a builder constructing new houses. This way you can sell multiple houses in a single subdivision without driving people all over creation.

Income is not created equal. Making 100,000 a year in California is not the same as making 100,000 in Georgia due to cost of living expenses. In California you are squeaking by versus GA on 100,000 you can get pretty comfortable living on a reasonable budget.

Starting out most brokerages will take a 50/50 split. Currently after 3 years you can sit for a brokers exam if your license has been active and in good standing. Then you can decide if you want to go out on your own or be an associate broker at a firm.

It's not unreasonable for a full time broker/agent in residential who applies themselves and constantly learns to make 75,000 to 100k plus a year.

I only do commercial real estate as a principal broker about 14 years in the business. I am in the top percentile for commercial income. Average makes about 90k a year. If you do it right some brokers can average about 1,000,000 a year in income but they are at the top of the business.

Steven Greenhill · Answer

Depends on who you know, how well you can convince them to sell, how good of a job you do. I know people who sold $50 million within their first year -- pocketed over $800,000 first year -- but this is a well-connected kid. Others sold 0.

Joel Owens · Answer

Become a specialist. In this way by studying and learning everyday you likely can become a world class expert at it after so many years.

20% of the brokers and agents do 80% of the business. Especially as you move up into larger properties in the millions to tens of millions in price per transaction the buyers and sellers expect you to be the best at what you do. Mediocre doesn't survive in those waters.

Being mediocre might get people by so far in residential or small mom and pop type commercial properties that are 300k to under 1 million. All the parties involved on larger transactions will know right away if you do not have the experience.

If you are really interested in commercial then get rid of residential all together as a broker/agent. Go work at a specialized firm such as large apartment buildings,retail,office,industrial,etc. to hone your craft.

Keith Jourdan · Answer

I am in my third year as a residential agent. After all broker fees etc, 1st year a little over $50k, second year a little over $70k.

From what my broker told me this is great success for the first 2 years. Our market is mostly $50k-300k homes.

If you really apply yourself and do a ton of open houses/networking you can do great your first few years.

I personally know agent who make $500k+ per year, but they all have 10+ years experience.

Dany Namou · Answer

@Joel Owens

@Ron Turner

50/50 split is quite low IMO. I would definitely shop around. I currently have a $7500 cap with a $750 fee per transaction (After the tenth transaction, I am 100% commission), and my offices are in the most expensive parts of our state, and they have quite a bit of support (albeit not as much as other brokerages with higher fees).

As a new agent, I would't mind trading a higher commission split for more training/coaching/support. However, I would not stay there too long after I learn the ropes.

Also, as a heads up, do not sign a non compete agreement with any brokerage. I foolishly made this mistake and now it's costing me big time.

Ron Turner · Answer

Hi @Ralph C., thanks for the response. I don't have a background in real estate, and yes, everything I've read and people I talk to say the same thing, prospecting is king. I've always been interested in Real Estate, have been in a career the last 30 years of coaching and consulting Olympic level athletes and Coaches, and am ready for something new. I'm halfway done with my online pre-licensing course and will take the agent exam in October...

Ralph C. · Answer

Based on the current market activity and number of new agents entering( of which a bunch don't even know what they are doing)

Get ready to prospect, prospect and prospect.....And prospect.  Listing homes  is super competitive right now. You have to get your name out there and get some sort of deals done to get homeowner's comfortable with listing with you.

Just as working with buyers, it's the least desired side of the transaction but then again it also depends on what your strengths are either Listing or working with buyers.

Do you have any background in real estate?

Just out of curiosity what drove you to become an agent?

I originally  got my license for investment purposes to list and sell my own deals, but it's also nice when i close on regular transactions from referrals I receive and help either sell or buy for my clients.

Ron Turner · Answer

Thanks for the great answer, @Joel Owens!

REAL salary numbers for Agents?

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