Real estate seems like a promising industry to enter. Many real estate agents boast about the flexibility in their careers along with their earnings potential, which seems to be substantially more than most average careers.
But is it too good to be true? Is being a real estate agent worth it?
If you’re contemplating a journey into a real estate career, here’s what you need to know about the responsibilities, earning potential, and educational requirements. You can make an informed decision before you start your new path.
What Is the Job Market Like for Real Estate Agents?
The Bureau of Labor Statistics calculates economic growth and the number of jobs that exist in a particular field. Their calculations show that job growth for real estate brokers and agents will grow by about 4% this year. Although this growth is slower than some other industries, it leaves plenty of room for new real estate agents to pave their way.
They estimate that each year, approximately 47,500 job openings for realtors and brokers will open up. To put that into perspective, this would suggest that about 10,000 people for each contiguous US state will enter the real estate workforce.
The odds are decent that newly minted real estate agents should be able to find gainful employment within a reasonable timeframe.
How Much Money Do Real Estate Agents Make?
The same figures from the Bureau of Labor Statistics estimate that the median salary for a real estate agent in the United States was $49,040. Real estate agents set their own hours and have a flexible schedule.
Some only sell a home a month, while others are more committed, driven, and busy. For this reason, median salaries may not be the best way to predict your paycheck potential as a real estate agent.
What Are the Responsibilities of Real Estate Professionals?
Real estate agents will work under a real estate broker. Brokerages will have limited involvement in the way they run their individual operations. Real estate agents often make their own schedules, and with that freedom comes a significant amount of responsibility.
The typical responsibilities of the average real estate agent will be the same across the board:
- Generating leads and securing potential clients
- Assisting clients who want to purchase or sell their home
- Listing and describing properties if you are the listing agent
- Holding or hosting open houses
- Providing assistance and advice to clients about their local real estate market and giving them realistic expectations
- Helping all parties negotiate a “win-win” situation in real estate transactions
- Preparing, reviewing, and interpreting real estate contracts, paperwork, and negotiations
- Advertising their own services and the properties they’re selling (social media, business cards, hosting podcasts, etc.)
Given the number of responsibilities a real estate agent frequently has to meet, some real estate agents choose to keep their careers part-time and limit the number of potential buyers or sellers they take on.
Full-time real estate agents who develop a steady flow of productivity and a functional system find that they’re able to take on more clients seamlessly and maximize their earning potential.
How Do Real Estate Agents Get Paid?
Real estate agents don’t often get hourly pay or a weekly salary. Instead, they usually get a commission on the properties they sell or help their clients buy. The total percentage varies, so you will never be able to predict your earnings or percentage. The amount you earn from each transaction will be based on negotiations. Keeping your negotiation skills sharp is key.
To speak generally, the average commission is around 6% of the total sale price. Hypothetically that means for every $100,000, the commission is $6,000.
If you sell a home for $300,000, the total commission will be $18,000. Most real estate agents don’t keep the entire commission. They’ll split their commission with the buyer’s agent, each taking in $9,000.
Then, the broker you work for will get a cut of the sale. The broker will take as much as 40% of that commission, which would be $3,600. Each agent makes $5,400 before tax. Closing two deals just like this every month equates to $10,800 per month or $129,600 annually before taxes.
Many real estate agents won’t sell two homes a month. Agents who do real estate part-time may only sell four homes a year. Luxury real estate agents sometimes sell a single property a year. The commission from a multimillion-dollar home sale is more than enough money for them to live quite comfortably.
This may seem like a good amount of money, but keep in mind the expenses that factor into this position: gas, education, and more can quickly add up.
It’s important to have reasonable expectations about what you’ll make coupled with a realistic idea of how much you’re willing to work. Experience and sphere of influence also play a major factor in industry success.
New agents who still have a lot to learn may not rise through the ranks so quickly. If you’re knowledgeable, competent, and competitive, you increase your chances of outshining the competition.
What Are the Requirements for Becoming a Real Estate Agent?
Here’s the real question: is being a real estate agent worth it if you need to obtain a degree and work a different job for several years until you’re able to achieve your goal?
Good news. All you need to obtain a real estate license is a high school diploma or a GED.
The first step to becoming a real estate agent involves a licensing course. Real estate courses vary from state to state but expect about 60 hours of active learning and tests.
Then, each state usually has an exam you must pass before you’re granted a real estate license. Once you have that license, you can apply for a position at a real estate firm or work with a real estate broker.
How Much Education Do You Need To Be a Real Estate Agent?
Even though the educational requirements for obtaining a real estate license don’t involve a college degree, you aren’t out of the woods just yet. Real estate constantly evolves.
Home and marketing trends come and go. Buyers have different ideas about the types of properties they’ll want. Successful real estate agents stay ahead of the game by committing to lifelong learning.
Some real estate agents keep a casual interest in the industry, staying abreast when they have time and taking things moment by moment. If you want to thrive in the real estate business, your best method of competition is to remain a few steps ahead of other agents in your area. If you take learning seriously, potential clients will be able to tell.
Most real estate agents quit within their first year. How do you avoid being part of this statistic?
Increasing Your Chances for Success
Here’s the final answer to the question. Is being a real estate agent worth it? It is if you’re willing to put the work in. If you dedicate yourself to becoming the best real estate agent in your area, chances are significantly higher that you’ll achieve the success you want in the real estate industry.
Educational resources like Harris Real Estate University are designed to empower and educate real estate agents through a vast online learning library and regular coaching calls with a Harris-certified coach who can help them reach their goals.
There’s no such thing as knowing too much about the industry that you work in. Accountability helps to reinforce your learning ventures as you adhere to your goals.
Harris Real Estate University trains real estate agents to generate leads, handle objections, prequalify buyers, and master the art of advertising. Take your real estate education a few steps forward with Harris.
Sources
Real Estate Brokers and Sales Agents : Occupational Outlook Handbook | Bureau of Labor Statistics
Real Estate Commission Laws | SF Gate
