If you’re contemplating a career change, you want to know as much as possible about the path you’ll potentially follow. Salary is a very important part of a career choice. While it’s important to engage your passions and enjoy the work you do, it’s only feasible to fully commit to that path if you’re comfortable with the amount of security it provides.
Real estate careers have the potential to be very lucrative. If you’re knowledgeable, experienced, and following market tested guidance, you’ll have every chance to succeed as a real estate agent. Should you choose this career path, here’s what you can expect in terms of salary.
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How Much Does a Real Estate Agent Make in an Hour?
Real estate agents don’t typically receive hourly pay. They receive commissions when they make a sale or help their client make a purchase. This process can take anywhere from a few hours to a few months, and real estate agents typically work with multiple clients at a time.
Pay for real estate agents can differ greatly depending on a wide variety of circumstances affecting the market and the purchase or sale of a particular property. An hourly rate would be an estimate based on how much a real estate agent makes each year divided how many hours an agent spends actively working each year.
However, because real estate agents are almost always paid on commission, this estimated hourly rate should only be used as a benchmark or point of comparison. The existence of an hourly rate estimate does not mean that an agent is paid a biweekly or monthly salary.
Some real estate agents treat their profession like a part time job, while others happily work beyond 40 hours a week because they find their career ignites their passion. When you combine real estate agents of all experience levels in all markets working any amount of hours annually, the national average comes out to about $49,000 a year.
What Is the Average Hourly Rate For Real Estate Agents?
The demand for real estate agents varies from state to state, and even from city to city. Here are a few examples of the average real estate agent’s estimated hourly rate would be in these states according to Census data.
- Alabama – $33.45 (or $50,300.00 year)
- California – $39.72 (or $59,830.00 year)
- Colorado – $33.75 (or $71,880.00 year)
- Delaware – $41.01 (or $43,250.00 year)
- Florida – $32.28 (or $43,670.00 year)
- New York – $42.28 (or $93,100.00 year)
- Oregon – $34.26 (or $38,560.00 year)
- Texas – $34.96 (or $61,720.00 year)
Real estate agents in Delaware, Maryland, New Hampshire, New York, Virginia, and Washington will usually make a very comfortable living, but all averages suggest that real estate is a lucrative career opportunity in every state.
It’s important to keep averages in perspective. Some real estate agents, particularly new and inexperienced real estate agents, will inevitably make less than the state or national average. Very knowledgeable and competent real estate agents can potentially make substantially more. It’s also worth noting that like with all business ventures, some deals will be more profitable than others.
The Top 10 Highest Estimated Hourly Real Estate Rates by City
Real estate agents in large cities, developing cities, and cities that have recently become hotspots will make more than real estate agents who work in smaller surrounding towns. The stronger the market and the greater the property values, the higher the earning potential for experienced real estate agents there.
- 1. Lakes, Alaska – $45.72
- 2. Danville, California – $49.07
- 3. Palmdale, California – $45.21
- 4. Pleasanton, California – $45.45
- 5. Richmond, California – $48.77
- 6. Santa Clara, California – $45.04
- 7. San Francisco, California – $45.71
- 8. Stamford, Connecticut – $47.49
- 9. Shakopee, Minnesota – $46.37
- 10. Bellevue, Washington – $47.38
If you’re a real estate agent, it may seem like California is a profitable place to be. You’ll face a wealth of competition from other real estate agents looking to make a substantial annual salary in several major cities. Before you pick up and move to a new town or a new state, consider what you’d be getting yourself into.
Different Locations, Different Incomes
Cities where real estate agents are making substantial salaries typically don’t require more real estate agents. Many of those agents work for companies that hold up an important part of the market. They have the resources to dominate, and smaller real estate agents cannot afford to compete.
It’s important to note that real estate agents working for these large companies still earn their salaries through commission. The benefits of working under a larger company can include mentorship, pre-made marketing materials, training, and exposure.
However, real estate agents often need to split their commissions with these companies. While working for a real estate company can provide a foot in the door for new real estate agents and may be a necessity in certain high-profile markets, that convenience comes with compromise. Still, splitting a commission on multiple sales facilitated by your company will be more fruitful than only selling one or two homes a year due to steep competition.
In states like California, real estate agents are legally required to work under a real estate broker. Oftentimes, these brokers will open their own real estate companies—called brokerage firms—in which multiple agents are supervised by one or more brokers.
These larger real estate companies seldom hire, and when they do, they’re seeking agents with a wealth of experience. If you’re new, it may be a wiser idea to practice closer to your hometown.
Real estate agents are also likely to make more money when there aren’t enough real estate agents in their area. When a smaller pool of real estate agents is serving a community, there may be times where the demand for real estate agents outweighs a city’s supply.
These real estate agents often make higher estimated hourly rates based on the volume of their clients, rather than the prices of the property they’re selling.
How Can I Make Money as a Real Estate Agent?
Real estate agents have complicated and nuanced jobs. They have a significant workflow to manage, and they need to see it through while managing lead generation, performing market research, sending out regular follow ups, advertising their services, and crafting perfect listings. It gets very busy, and if you don’t know where to start, it’s hard to find the proper work life balance while achieving success in the real estate industry.
Harris Real Estate University provides coaching to real estate agents in all areas of their businesses, from new real estate agents to well-established realtors. We offer one on one training sessions, as well as a large catalog of lessons in our learning library. We offer the tools and courses you need to strengthen your knowledge and confidence, empowering you to achieve the success you deserve.
Try a free coaching consultation with our team of certified coaches to learn what we can do to help you succeed.
Sources:
Full-Time, Year-Round Workers and Median Earnings: 2000 and 2013-2019 | Census
Competition and Real Estate | United States Department of Justice
Real Estate Brokers and Sales Agents | U.S. Bureau of Labor Statistics
