One of the best ways of making money in the real estate business is by being a real estate agent. However, not all agents make the same amount of money. The pay levels vary based on factors such as education, motivation, and location. In addition, making money as a real estate agent will be determined by whether you are a full-time or part-time agent.
A real estate agent salary is commission-based and is determined by the number of transactions completed. Usually, agents negotiate the real estate agent commission split when they start working at a brokerage. Let’s say you successfully negotiate the sale of a $300,000 house and what you make per sale is 6%. The commission will first be split between the selling and buying agent. If you are representing the selling side, 3% will be $9,000. If this amount is shared on a 60/40 split with your broker, you will take home $5,400. However, how much commission is earned can be renegotiated as you gain more experience.
So, How Much Do Real Estate Agents Make?
At the beginning of their careers, agents don’t earn much since they are still struggling to build a real estate client base. As time goes by, they learn how to generate leads and therefore earn a higher income. According to recent data from the U.S. Bureau of Labor Statistics (BLS), real estate agents made an average annual income of $50,300 in 2018. The best locations for real estate agents were found to be:
- New York
- Rhode Island
On the other hand, the states where agents earned the least money were:
- West Virginia
How to Make More Money as a Real Estate Agent: 7 Tips
If you find that you are earning much lower than the average or that the average is simply not enough for you, there are ways that you can earn more. Here are some tips for real estate agents that want to make more money:
1. Add to your credentials
If you want to make more money as a real estate agent, having an undergraduate degree in real estate and a license is not enough. Building your credentials will make you stand out from the competition, attract more leads, and enhance the chances of earning a higher income.
According to the National Association of Realtors (NAR) and its affiliated institutes, these are some of the certifications and designations agents could pursue:
- Accredited Buyer’s Representative (ABR)
- Accredited Land Consultant (ALC)
- Certified International Property Specialist (CIPS)
- Certified Real Estate Brokerage Manager (CRB)
- Certified Residential Specialist (CRS)
- Counselor of Real Estate (CRE)
2. Improve your real estate lead generation (and qualification) skills
Whether you are a seller’s agent or a buyer’s agent, you will not make more money as a real estate agent if you don’t know how to generate leads. When done properly, real estate lead generation will ensure a strong, dependable database of contacts that will ensure a consistent monthly income. Here are some of the strategies you can use to find more real estate clients:
- Build a professional, personalized site for your business
- Create profiles on online lead generation platforms such as Trulia, Zillow, and Mashvisor
- Promote your business on social media sites
- Attend open houses, conferences, and trade shows for networking with potential real estate customers
- Use local newspapers and real estate publications for real estate advertising
- Write expert articles on different real estate agent blogs
- Ask previous clients to leave reviews
Related: How to Generate Real Estate Leads: 6 Ways That Really Work
What’s even more important is your ability to qualify real estate leads. You might successfully implement the above tactics and generate tons of leads every week, but if you don’t know which are ready to convert now or where any of them fall in your real estate sales funnel, you could be wasting a lot of time and energy only to end up making no money at all. Working with quality leads is what will help you earn more money. The best step you can take is to use tools such as Mashboard for qualifying real estate leads. Schedule a demo now to learn more about this AI-based lead qualification tool.
If you want to make more money, schedule a demo now.
3. Find a mentor
You can learn a lot from successful real estate agents that have been in the business for many years. Such people can share lessons from their knowledge and experience to help you make more money as a real estate agent. Some of these insights cannot be learned on the internet or in a classroom. For best results, find a mentor that specializes in your niche market. Mentors can be found from various real estate associations or via a mutual connection.
4. Become a property manager
After helping real estate investors buy an investment property, you can make more money by helping them manage it. Property managers are usually paid 10% of the money collected as rent. The responsibilities of property managers include:
- Advertising the rental property
- Finding and screening tenants
- Preparing lease documents
- Dealing with tenant emergencies and complaints
- Managing budgets and maintaining records
- Supervising contractors, security personnel, and other workers
- Handling property maintenance and repairs
Related: How to Become a Property Manager in 5 Steps
5. Work as a real estate broker
Being a broker means having several other agents working under you. Your responsibility will be to hire the best real estate agents and give them targets for each month. As a broker, you will get a cut of the agents’ commissions, as well as advertisement money or desk fees from them. However, many jurisdictions will only allow you to start a brokerage after a specific time once you acquire the real estate agent license.
6. Become a commercial agent
If your main focus has been residential properties, consider venturing into commercial real estate. Since commercial properties are typically more expensive compared to residential units, commercial real estate agents usually make more money than residential real estate agents.
Related: How Do You Become a Commercial Real Estate Agent?
7. Invest in real estate
Besides having a lot of insight into the best properties and neighborhoods in the housing market, real estate agents also have great negotiation skills. Therefore, agents can use this knowledge to their advantage and acquire some property. Investing in real estate is a great way to make more money as a real estate agent. Get started now.
If you have ever wondered ‘how much do real estate agents make’, you now have an idea. The key to how to make money as a real estate agent is the amount of effort, money, and time you put into your career. Whether it’s in mentorship, continued education, buying property or lead generation or qualification tools, your efforts will go a long way in helping you make more money as a real estate agent.