Can you make $1 million in your first year selling real estate? It can be done. In fact, it has been done. But it doesn’t happen by luck or accident. This is the first in a series of articles detailing how you, as a newly licensed agent, could set yourself up to be successful enough to to make $1 million in your first year. In this initial piece, we discuss the “where” of the dream—the markets and brokerages that statistically give you the best odds of success.
The Dream
Most individuals who dream about a career in real estate include making lots of money to fund a lavish lifestyle rich with expensive automobiles and a luxurious home in a distinguished neighborhood.
The dream of what it takes to make a lot of money in real estate usually involves activities that people have observed real estate agents in their environment perform, including holding open houses, putting up yard signs, driving buyers around, showing houses, and so on.
The Reality
According to the National Association of REALTORS® Member Profile for 2016 (the latest year available), 68% of real estate salespeople (not brokers) who have been in the real estate business for two years or less earn $10,000 or less after taxes and expenses.
Clearly, there is a gap between the dream most people possess about the glamour of the real estate profession and the practical reality of what the real estate business consists of. To avoid falling into this trap, a strategy founded on facts and a sound business plan is called for.
Looking to sharpen your real estate negotiating skills? Download the 17 Essential Tips for Successful Real Estate Negotiating.
If You’re Going to Dream, Dream Big (and Plan Even Bigger)
Consider what it would take to make $1 million in gross commissions your first year selling real estate (before expenses and taxes). It would involve selling approximately $50 million of real property with an average salesperson commission of 2%.
Real Trends is a real estate consulting service that has been analyzing what real estate licensees and companies do for over 30 years. They have just published their 2018 The Thousand, which is a report of the “Best Real Estate Agent Rankings” in America. Real Trends identifies 250 individual agents who have achieved the above level of income, or more. Following are some insights into what it takes based on the Real Trends survey.
Top 5 States Where Individual Agents Sell $75 million to $1.9 billion Per Year
Out of the 250 top producing agents identified in the Real Trends survey, the following percentages of agents are found in the following five states:
- California: 44%
- New York State: 24%
- Florida: 7%
- Massachusetts: 6%
- Colorado: 4%
This means that 85% of all multi-million dollar selling real estate agents are located in just five states. If new salespersons want to operate in this environment, it only makes sense to locate their business in one of the above states.
Top 20 Cities to Make a Million Dollars Selling Real Estate
If one wants to have a successful career selling expensive homes, it would be even better to identify the best cities in each of the best states to operate as a real estate agent. Following is a list of the best cities where agents are finding success (ranked from 1 to 20 in order of the number of successful agents in each market):
- New York City, New York
- Beverly Hills, California
- San Francisco, California
- Menlo Park, California
- Boston, Massachusetts
- Aspen, Colorado
- Los Angeles, California
- Los Altos, California
- Saratoga, California
- Bridgehampton, New York
- Palm Beach Florida
- Encino, California
- East Hampton, New York
- Brooklyn, New York
- Burlingame, California
- Southampton, New York
- Naples, Florida
- Wellington, Florida
- Wellesley, Massachusetts
- Greenwood Village, Colorado
Top 12 Real Estate Brokerage Companies Who Specialize in Expensive Properties
Having decided on a state and city to operate in, the next step is to identify a brokerage operation with which to associate. While there are a number of real estate brokerage firms that don’t draw the attention of national surveys, such as the National Association of REALTORS® or Real Trends, these boutique operations may do a substantial amount of exclusive property business in a particular local marketplace and could provide an excellent opportunity for an agent. The following listing includes some of these types of brokerages, and some of the larger national operations that have carved out a substantial market share of this category of business.
The following brokerage operations are listed in order by the number of identified million dollar producers in the Real Trends survey:
- Sotheby’s International Realty
- Coldwell Banker
- Corcoran
- Compass
- Alain Pinel
- Douglas Elliman Real Estate
- Pacific Union
- The Agency
- RE/Max
- Rodeo Realty
- Keller Williams
- Engel & Volker
Next: Developing a Million Dollar Marketing Plan
Having established some ideas about where to locate a million dollar real estate sales business, and provided some direction for finding a broker to associate with, the next installment in this series will explore the type of marketing plan it takes to result in $1 million in gross commissions your first year in the real estate business. We will explore how to develop an international clientele and how to sell to celebrities. We will also discuss the one category of super-wealthy client who is involved in a multi-million dollar real estate transaction every 1.8 years (as opposed to the average homeowner, who is involved in a $200,000 transaction every 7 years). Stay tuned and learn how to develop your million dollar marketing plan.
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This is the first installment in a series of articles exploring the steps a newly licensed real estate agent could take to earn $1 million in their first year in the business.
Can you make $1 million in your first year selling real estate? It can be done. In fact, it has been done. But it doesn’t happen by luck or accident. This is the first in a series of articles detailing how you, as a newly licensed agent, could set yourself up to be successful enough to to make $1 million in your first year. In this initial piece, we discuss the “where” of the dream—the markets and brokerages that statistically give you the best odds of success.
The Dream
Most individuals who dream about a career in real estate include making lots of money to fund a lavish lifestyle rich with expensive automobiles and a luxurious home in a distinguished neighborhood.
The dream of what it takes to make a lot of money in real estate usually involves activities that people have observed real estate agents in their environment perform, including holding open houses, putting up yard signs, driving buyers around, showing houses, and so on.
The Reality
According to the National Association of REALTORS® Member Profile for 2016 (the latest year available), 68% of real estate salespeople (not brokers) who have been in the real estate business for two years or less earn $10,000 or less after taxes and expenses.
Clearly, there is a gap between the dream most people possess about the glamour of the real estate profession and the practical reality of what the real estate business consists of. To avoid falling into this trap, a strategy founded on facts and a sound business plan is called for.
Looking to sharpen your real estate negotiating skills? Download the 17 Essential Tips for Successful Real Estate Negotiating.
If You’re Going to Dream, Dream Big (and Plan Even Bigger)
Consider what it would take to make $1 million in gross commissions your first year selling real estate (before expenses and taxes). It would involve selling approximately $50 million of real property with an average salesperson commission of 2%.
Real Trends is a real estate consulting service that has been analyzing what real estate licensees and companies do for over 30 years. They have just published their 2018 The Thousand, which is a report of the “Best Real Estate Agent Rankings” in America. Real Trends identifies 250 individual agents who have achieved the above level of income, or more. Following are some insights into what it takes based on the Real Trends survey.
Top 5 States Where Individual Agents Sell $75 million to $1.9 billion Per Year
Out of the 250 top producing agents identified in the Real Trends survey, the following percentages of agents are found in the following five states:
- California: 44%
- New York State: 24%
- Florida: 7%
- Massachusetts: 6%
- Colorado: 4%
This means that 85% of all multi-million dollar selling real estate agents are located in just five states. If new salespersons want to operate in this environment, it only makes sense to locate their business in one of the above states.
Top 20 Cities to Make a Million Dollars Selling Real Estate
If one wants to have a successful career selling expensive homes, it would be even better to identify the best cities in each of the best states to operate as a real estate agent. Following is a list of the best cities where agents are finding success (ranked from 1 to 20 in order of the number of successful agents in each market):
- New York City, New York
- Beverly Hills, California
- San Francisco, California
- Menlo Park, California
- Boston, Massachusetts
- Aspen, Colorado
- Los Angeles, California
- Los Altos, California
- Saratoga, California
- Bridgehampton, New York
- Palm Beach Florida
- Encino, California
- East Hampton, New York
- Brooklyn, New York
- Burlingame, California
- Southampton, New York
- Naples, Florida
- Wellington, Florida
- Wellesley, Massachusetts
- Greenwood Village, Colorado
Top 12 Real Estate Brokerage Companies Who Specialize in Expensive Properties
Having decided on a state and city to operate in, the next step is to identify a brokerage operation with which to associate. While there are a number of real estate brokerage firms that don’t draw the attention of national surveys, such as the National Association of REALTORS® or Real Trends, these boutique operations may do a substantial amount of exclusive property business in a particular local marketplace and could provide an excellent opportunity for an agent. The following listing includes some of these types of brokerages, and some of the larger national operations that have carved out a substantial market share of this category of business.
The following brokerage operations are listed in order by the number of identified million dollar producers in the Real Trends survey:
- Sotheby’s International Realty
- Coldwell Banker
- Corcoran
- Compass
- Alain Pinel
- Douglas Elliman Real Estate
- Pacific Union
- The Agency
- RE/Max
- Rodeo Realty
- Keller Williams
- Engel & Volker
Next: Developing a Million Dollar Marketing Plan
Having established some ideas about where to locate a million dollar real estate sales business, and provided some direction for finding a broker to associate with, the next installment in this series will explore the type of marketing plan it takes to result in $1 million in gross commissions your first year in the real estate business. We will explore how to develop an international clientele and how to sell to celebrities. We will also discuss the one category of super-wealthy client who is involved in a multi-million dollar real estate transaction every 1.8 years (as opposed to the average homeowner, who is involved in a $200,000 transaction every 7 years). Stay tuned and learn how to develop your million dollar marketing plan.
You May Also Be Interested In:
To start, the pursuit of a $1 million income in the first year as a real estate agent isn't a feat for the faint-hearted. It involves a meticulous blend of strategic market selection, thorough brokerage research, and an elaborate marketing blueprint. Now, let's break down the core concepts highlighted in the article:
Core Concepts:
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Real Estate Dream vs. Reality: The article emphasizes the gap between the glamorous perception of real estate and the actual business reality. It's crucial to debunk misconceptions and ground oneself in practicalities.
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Statistics and Real Trends Analysis: The article draws on the National Association of REALTORS® Member Profile for 2016 and Real Trends' data, particularly their report "The Thousand," which identifies top-performing agents. This data informs aspiring agents about the scope of success within the industry and where top earners are concentrated.
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Geographic Analysis:
- Top States for Real Estate Sales: California, New York State, Florida, Massachusetts, and Colorado house 85% of multi-million dollar selling agents.
- Top Cities for Real Estate Earnings: Locations like New York City, Beverly Hills, San Francisco, Menlo Park, and Boston rank high for successful agents.
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Brokerage Selection:
- The article lists top brokerage companies based on the number of identified million-dollar producers, ranging from Sotheby’s International Realty and Coldwell Banker to Keller Williams and Engel & Volker. It emphasizes the significance of aligning with the right brokerage for success.
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Future Content Teasers:
- The article hints at forthcoming content, focusing on developing a million-dollar marketing plan, targeting international clientele, selling to celebrities, and tapping into high net worth clients.
Insights to Consider:
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Strategic Location: Success rates for high earnings in real estate are significantly higher in certain states and cities. Choosing the right location plays a pivotal role.
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Brokerage Association: Aligning with a brokerage known for its success in luxury properties or high-end markets can significantly impact an agent's potential earnings.
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Market Positioning and Marketing: The upcoming content aims to delve into the crucial aspect of crafting a comprehensive marketing strategy tailored to tap into affluent markets and high net worth individuals.
To succeed in this ambitious endeavor, aspiring agents must not only dream big but meticulously plan and execute strategies backed by market data, strategic partnerships, and a comprehensive marketing approach. Success in real estate often hinges on a blend of industry expertise, networking, and targeted marketing efforts aimed at high-value clientele.
