There are several factors that impact how much real estate agents make per year. Real estate agents earn their salary through a commission-based process. Typically, agents make a commission of up to 6% of the purchase price that is split with a broker. As a real estate agent, you could be making more than $42,000-$49,000 annually. You get paid when the house or property closes, transferring from the seller to buyer. Here are the top factors that impact how much real estate agents make per year.
Rate Of Home Sales
The rate of home sales impacts how much real estate agents make per year. Of course, your income will depend on the amount of houses you sell and for how much. Focus more on the home value rather than the quantity of houses sold. You can sell over 15 cheap homes for a low commission and still earn less than an agent selling four luxury homes using real estate agent business plans. Therefore, targeting the real estate’s median market allows you to easily earn a higher annual income. For example, by selling 10 homes at a median price while earning 3% commission for each, you can earn $75,000 per year. Certainly, pay attention to the rate of home sales when calculation how much real estate agents make annually.
Location Of Operation
Of course, the location of operation will affect how much a real estate agent makes per year. You earn more if you sell real estate located in New York, Texas, Hawaii, Alaska and Rhode Island. On average, New York agents earn an annual income of $102,310 while Texas agents earn $72,480. Texas’ average annual income for real estate agents has increased 13.1% in one year. Additionally, Hawaii agents earn $72,470, Alaska agents earn $71,450 and Rhode Island agents earn $70,450. However, Rhode Island’s average annual income for real estate agents has increased 52.1% in two years. Certainly, the location of operation will impact how much a real estate agent earns annually.
Personal Costs & Expenses
Additionally, personal costs and expenses impact how much a real estate agent brings home annually. If you work as an independent contractor, you will be responsible for your own expenses. This includes health insurance, vehicle expenses, MLS fees, brokerage fees, and errors/omissions insurance. Additionally, about 80% of agents surveyed by the Real Estate Services Alliance (RESA) pay up to $750 for a consultation. This staging consultation determines how your real estate value increases with staging. However, more than half of real estate agents offer to pay for staging services. Staging services can cost as little as $700 if there is already furniture at the estate. Depending where the estate is located, full house staging services could cost up to $5,500 a month. Certainly, calculate personal costs and expenses when factoring how much a real estate agent makes a year.
Sale Commission Rate
Furthermore, sale commission rate influence a real estate agent’s annual income. Typically, the total amount of commission is based on percentage. However, the percentage differs between locations. Generally, sellers pay about %5 of the home’s final price. That percentage is given to the listing agent who splits the income with the buyer’s agent. For example, if a house sold for $300,000, the listing agent would receive $18,000. You would then receive half of that, leaving you and the listing agent with $9,000 in profits. Of course, factor in the sale commission rates when determining how much a real estate agent makes per year.
Marketing & Advertising
Finally, marketing and advertising impacts how much real estate agents make a year. Agents need to brand themselves and focus on making successful marketing campaigns. Their campaigns need to be based off their income to determine what they can afford. Typically, agents use social media engagement and content marketing as it is relatively inexpensive. However, by implementing pay-per-click marketing, campaigns can be targeted by demographic and region. This allows agents to get the most out of their investment. Furthermore, real estate agents can invest in an all-in-one platform. The platform includes a website, social media management and real estate marketing software that can give access to marketing tools that may be out of reach for those with a tight budget. Certainly, advertise your business through networking events as people like to make physical connections. Definitely look at an agent’s marketing and advertising budget when determining how much they make a year.
There are multiple factors that impact how much real estate agents make per year. Of course, the rate of home sales impacts income as the price of the house can earn you more than the quantity of the houses sold. Additionally, the location of operations effects annual income as states pay their real estate agents differently. Certainly, personal costs and expenses influence income as agents are responsible for their health insurance, vehicle expenses and estate staging. Furthermore, the sale commission rates affect annual income as you get half of the total percentage. Finally, marketing and advertising impact income as agents need to use their own money to advertise their business. These are the top factors that impact how much real estate agents make per year.