What Does the Average Realtor Make?
What does the average realtor make? According to RadioIowa, Scott Wendl, the president of the Iowa Association of Realtors, says the changing seasons are prompting a slowdown in home sales in the state, but Wendl, who has been a realtor in the Des Moines area for 24 years says 92 percent of all property sales in the U.S. are handled by a realtor.
Now, Wendl says. “We’ve got the most realtors in the Des Moines market, the most in the Iowa market and nationally, we’re at 1.4 million, which is more than it was back pre-recession time.”
I immediately thought, if there are 1.4 Million realtors, they must make pretty good money. There is a shortage of houses, lots of buyers and housing prices keep going up year after year (at least until 2008, but now in many places are back to their 2008 highs).
So, What Does the Average Realtor Make?
Bob Gibbs, Co-Founder of The Gibbs Real Estate Group, RE professional in the East Bay of CA, said, “What I have found is that a new agent working on their own will sell between 0-2 homes their first year, and the homes they sell are usually family members.
t takes several years to generate enough business to make a career out of it. Most agents that are doing well sell between 15-30 homes a year with a few that sell more than 100. However, in order to sell 100+ homes, these agents typically have teams that consist of 2-4 agents, an assistant or two, and a marketing person.”
If a realtor lives in an area of $200, 000 house prices, and sells two houses each year, he would net before taxes about $30,000 a year. That’s practically poverty level. In an area of $1,000,000 houses, the realtor might get by.
Trey Davis, approaching 1000 homes sold, 10 small subdivisions done, 400 flips completed, said,
“In my area, 10 percent of the agents do 90 percent of the selling. It’s the Pareto Principle except more exaggerated.” The Pareto principle states (also known as the 80/20 rule) that for many events, roughly 80% of the effects come from 20% of the causes
And it’s set up to stay that way. The top agents are more knowledgeable and experienced than any low-volume agent will ever be. The more transactions they do, the better they get at dealing with all kinds of personalities, conflicts, situations, etc. Plus they would have also built up more wealth, more contacts, more grit, and more confidence, all of which will help them outlast and outshine the agents that produce much less.“
Should You Become a Real Estate Agent?
Aylen Montenegro, an Author, said, “Should you” you is a second question after “Can you afford a real estate career?” It’s not for the faint of heart, and the sad fact is 87% of agents fail in their first 3 years. It’s harder than most people think and easier when you do the right things and have connections in the right circles and places.Here is a reality check and some things to consider before burning through hundreds, if not thousands of dollars:
What’s your Budget?
Licensing:
Just the expense of getting licensed can range in the hundreds of dollars.Activation & On-Going:
Unlike a new career where you get all resources soon after being hired, real estate agents actually pay for all the starting up costs out of their own pockets. From business cards to office fees, copies and CRM’s, the dollars can begin to add up. Here is when it’s helpful to stay true to the basics until you know your way around. Some brokerages can require you to pay monthly fees, or also, what is known as desk fees. Remember to factor all these expenses into your monthly budget.Business
:Remember that as a real estate agent, on commission, you will get a paycheck when the sale is funded. Given the typical cycle of a real estate closing, often 30 to 45 days, it helps to account for this time as it pertains to all your daily expenses.Other expenses:
Buying a new car or a used one.
A cell phone.
Opening a bank account.
Gas.
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