Want to work as a real estate agent but don’t know how much you can earn on average per year? Then it’s time that you did some research or read articles that pertain to real estate careers. To help you get the correct information before you start planning a career in real estate, we have laid out the salient points you need to know in this article. Making use of our information you can plan your real estate career, after you finish your education and ensure that you are paid well on the job.
Basic qualifications or licenses required by a real estate agent
If you want to work as a real estate agent, you will need a certain amount of minimum qualifications. In many countries real estate agents do not need to have a college education or a degree but they have to be registered with the government. Other countries which have stricter real estate regulations require agents to graduate from high school or have a college degree. Additionally to work in some countries agents are required to take a pre-licensing course, and then get a license to work from the state. Once licensed in these states, often a real estate agent cannot work until they are sponsored by a broker or a large firm.
Average earnings of a real estate agent
A real estate agent earns a larger amount if they close a higher amount of sales. However, their earnings also depend on the commission that they get after their sponsor has taken their share. Usually a percentage of the commission that is due to the agent is outlined in the agreement, associated with the listing. This agreement is negotiated with the seller who usually pays the commission, and also the brokerage through which the property is listed. One major advantage that the real estate agent has is that they can negotiate commission rates for each listing and these can vary considerably.
According to statistics most real estate agents who work full time earn around $45,990 per year. However, for agents that work part time or who are not as successful as others the annual earning in commissions can be around $23,000. While the most successful real estate agents often earn in excess of $110,000 per year.
The typical commission rates offered to real estate agents
Most real estate agents negotiate their commission rates so that they split the amount equally with the sponsoring broker. The commission is calculated based on the amount for which the property is sold. So if a property is sold for $500,000 and the commission charged is 5% then the real estate agent would earn $12,500 while an equal amount is earned by the broker.
Expenses eat into earnings
Since agents also need to spend on advertisement and invest in a CRM to keep in touch with their clients they need to curtail expenses. Keepings expenses under control ensures that the agent’s earnings do not decrease significantly.
As you gain experience in the real estate sector and spend a few years working as an agent you will build a wider customer base. Therefore, as you spend more time working as a real estate agent and accumulate several decades of experience, you will automatically be able to close more sales per year and earn more in the form of commissions.