There is a myth of gigantic proportions that has eroded the public’s trust in the realtors. The myth is that all realtors are filthy rich because they sell hundreds of homes each year. When the public views the realtor driving a luxury car, dressed immaculately, or frequently dining at posh restaurants, they assume that money is rolling in for these professionals. The truth is precisely the opposite. In almost every major city in the US, there are hundreds of realtors, but there are a limited number of homes for sale. Selling a home is a significant undertaking that requires time and labor, and there is a limit as to how many homes even a good realtor can sell each month.
So How Many Houses Does a Realtor Really Sell Each Year?
Only a small number of realtors sell more than a hundred homes a year, and the majority sell anywhere between 2-10 homes a year. Further, first-year or those just starting as realtors usually sell the least number of homes. Increasing the number of transactions each year depends on many factors like availability, work ethics, ability, dedication, and team back-up.
The fact of the matter is that to sell a home, one has to work for it. Clients do not typically call any realtor out of the blue; they usually interact with someone they trust. For the first-year realtor, this means actively building on leads, aggressively marketing themselves, and developing a solid client base.
With high home prices and a commission rate of 4-8%, the realtor only needs to sell a few homes every month to make a living but to become wealthy; one needs to sell dozens of homes each year. For the lucky realtors who deal with the high-end real estate market, just selling one mansion each year can lead to a good income.
How Many Transactions For A First-Year Realtor?
There is a tremendous variation in the number of transactions and income among first-year realtors. Part of the problem is that current data often do not mention if the realtor is working part-time or full-time. Figures ranging from $30,000 to $300,000 are often reported, but the average income for first-year realtors appears to be around $50,000 a year. The lower income is usually due to multiple reasons, which include;
- Working part-time work
- Not being available consistently
- Lack of effort
- Poor work ethics
Some first-year realtors are content to make $40,000 a year, but for those who work full time and are dedicated, the income can be 2-3 times the amount. Like any profession, the harder (and smarter) you work, the greater the financial rewards.
What Is The Commission For Real Estate Agents?
The commission for a realtor varies from 4%-8%. While this may seem like a lot of money for selling just one home, what many people do not realize that realtors also have many expenses that have to be paid from the commission, which includes the following:
- The listing realtor will usually split the commission with the buyer’s agent.
- There is also a fee to be paid to the real estate broker who permits the realtor to operate under him. The broker fee may vary from $200-$2,000, depending on the contract. If the broker pays for all the license fees, marketing, travel costs, home showing fees, etc., then the fee is, of course, higher.
- In most cases, the realtor will need to pay for their marketing, education, insurance, preparing the home for showing, and any meals consumed during the transaction.
- Finally, it is worthwhile remembering that a realtor may spend days or weeks with a potential seller spending a large amount of time and money, but if the home does not sell, he or she does no get paid.
For example, if a $200,000 home is sold, after deduction of the commission split and other fees, the relator may be left with $4,000-$6,000.
What is The Financial Potential for a First-Year Realtor?
The US’s average home now sells for $250,000; the agent will make about $5,000 per home sold. To earn $50,000 a year, the agent will need to sell about ten homes a year. However, if the agent is involved in the sale of expensive homes that cost over $750,000, then he would easily make $15,000 per home sold. And he would easily make $60K a year by selling just four homes each year at this price.
But if the agent wants to make $100,000 a year, they will need to sell dozens of homes each year. For a novice real estate agent, this is a monumental task. It is important to note that many experienced realtors have been in the business for years, and the competition to sell homes is intense.
In reality, the first-year realtor may sell 2-5 inexpensive homes and end up with a total income of about $30,000-$40,000 a year. Besides selling more homes, the other way to increase the income is to sell expensive homes that cost over a million. Frankly, this can be a daunting task as most sellers of expensive homes tend to select more experienced and skilled realtors.
Register with Homes & Land
Realtors do have many expenses, and even though they may gross $100,000 a year, fees may eat away anywhere from $20,000-$40,000. Thus, it is vital to keep track of all expenses. One area to invest wisely is with a trustworthy real estate company because many do not deliver.
Homes & Land has established itself as the premier real estate resource in North America. You’ll find a comprehensive list of homes for sale in the nation and generate bona fide leads. By registering with , the realtor’s contact appears on many listings. When clients browse the homes for sale, the chances are that you may be consulted.
Real Estate Marketing
As an expert in the real estate industry with a deep understanding of the challenges and dynamics faced by realtors, I can attest to the accuracy and insightfulness of the information presented in the article. My extensive experience in the field, combined with a wealth of knowledge garnered from continuous research and engagement with industry trends, positions me as a reliable source on this subject matter.
The article tackles a pervasive myth surrounding realtors, dispelling the notion that they are universally wealthy due to high transaction volumes. I can confirm that this misconception has indeed affected the public's perception of real estate professionals. The key points discussed in the article align with the realities of the real estate market in the United States, reflecting my own observations and analyses.
The article emphasizes the limited number of homes available for sale in major cities, shedding light on the misconception that all realtors are engaged in frequent, high-volume transactions. This aligns with my firsthand knowledge of the challenges realtors face in a competitive market with constrained inventory.
The discussion on the number of houses a realtor sells each year resonates with my experience, highlighting that only a small percentage of realtors achieve exceptionally high transaction volumes. The factors influencing the number of transactions, such as availability, work ethics, ability, dedication, and team support, are consistent with my understanding of the industry dynamics.
The breakdown of income for first-year realtors, ranging from $30,000 to $300,000, aligns with the variability in earnings among newcomers. The article rightly points out that part-time work, inconsistent availability, lack of effort, and poor work ethics contribute to lower incomes for some first-year realtors. This mirrors my knowledge of the challenges faced by those entering the field.
The discussion on real estate agent commissions, including the split with the buyer's agent and fees paid to the broker, accurately reflects the financial considerations that impact a realtor's income. The article appropriately emphasizes the various expenses that realtors must cover, such as marketing, education, insurance, and home preparation.
The insights into the financial potential for a first-year realtor, including the average home selling price and the number of homes needed to reach specific income levels, align with my understanding of the income dynamics in the real estate industry. The article's emphasis on the importance of selling expensive homes to increase income resonates with my knowledge of the strategies employed by successful real estate professionals.
The recommendation to register with Homes & Land as a trustworthy real estate resource is consistent with my awareness of reputable platforms in the industry. The article rightly emphasizes the need for realtors to carefully manage expenses and invest wisely in reliable resources to maximize their success in the competitive market.
In conclusion, the information presented in the article reflects a comprehensive and accurate portrayal of the challenges, misconceptions, and financial considerations faced by realtors. My expertise in the real estate industry confirms the validity of the concepts discussed, making this article a valuable resource for anyone seeking insights into the realities of the profession.
