WHAT IS THE SALARY OF REAL ESTATE AGENTS IN THE USA?

 WHAT IS THE SALARY OF REAL ESTATE AGENTS IN THE USA?

In the United States, as in many Western countries, real estate agent salaries are closely correlated with market developments. When the economy is prosperous and property sales are also booming, real estate agents earn substantial salaries, including attractive commissions. However, during a recession, real estate agent salaries are significantly impacted, as property sales and purchases slow significantly.

What is the salary of real estate agents in the USA?

Homeowners selling real estate, like buyers, are likely to engage with a real estate agent. Most agents are paid through commissions based on a percentage of the sale price of a house or apartment.

The annual compensation of real estate agents in the USA depends on a number of factors, including, of course, the number of transactions completed, the commissions they receive and the distribution of income between the agent and the sponsoring broker, if applicable.

How does the real estate commission work in the USA?

Most real estate agents earn money through commissions, which are payments they receive in exchange for services rendered in the sale or purchase of a property. A commission is typically a percentage of the property's sale price. However, sometimes the commission is awarded upfront and is based on a fixed amount.

The remuneration of real estate agents and real estate brokers

To understand how real estate agents in the US are paid, it is important to understand the relationship between them and brokers.

Real estate agents are salespeople authorized to work under the auspices of a designated broker. Agents cannot work independently and are prohibited from receiving commissions directly from their clients.

Brokers, on the other hand, can work independently and hire real estate agents as employees. All real estate commissions must be paid directly to a broker, who then shares the amount received with all other agents involved in the real estate transaction.

Both agents and brokers can be referred to as real estate agents. In the United States, the title of real estate agent refers to professionals (agents and brokers) who are members of the National Association of Realtors. These individuals adhere to the NAR's strict code of ethics.

Payment of a real estate commission in the USA

The real estate broker's compensation is stipulated in the contract between them and the seller. The real estate professional's commission rate is negotiable. While market participants may wish to standardize commission rates, it's important to note that this goes against federal antitrust laws, and any such practice would be considered a violation of current rules.

Real estate commissions generally range between 4 and 6% of the property price. They fluctuate depending on the market and can be higher or lower than these indicative rates.

Payment of the real estate agent's commission is the seller's responsibility, unless the buyer and seller negotiate to split the amount owed. Most sellers include the commission in the asking price when listing the property for sale, so it's safe to say that the buyer ultimately pays part of the commission.

Each agent enters into an agreement with the broker to whom they are associated, specifying their share of the commission. Just as the commission split can be equitable, with half for each agent, there can be different agreements depending on the case.

Sharing real estate agents' commissions

Real estate commissions are often split among several real estate professionals involved in a real estate transaction. Typically, the commission is divided between:

– The listing agent who generated the seller’s real estate listing

– The listing broker, with whom the agent works

– The buyer's agent, responsible for representing the buyer of the real estate

– The buyer's agent's broker, for whom the buyer's agent works.

On average, how much do real estate agents make in the USA?

In the United States, it's important to know that not all real estate agents earn the same amount. Real estate professionals come from different backgrounds, with varying levels of education and motivation, which can influence their income.

Some real estate agents work for the money, while others are drawn to the glamour, buzz, and challenges of selling real estate.

Most new real estate agents earn little, mainly because they use their first few years to learn the ropes and build a network of clients. They can usually rely on referrals from satisfied clients to grow their business over time and learn other techniques for attracting clients.

As of April 15, 2021, Indeed reported that the average salary for a real estate agent in the U.S. was $88,846 per year. The site details salary based on experience, including:

– $80,099 for 1 to 2 years of experience

– $105,096 for experience of more than 10 years

Real Estate Agent Salary Differences Across U.S. Cities

Still based on data provided by Indeed, the cities in which agents earn the most are:

Long Beach, CA: $100,736

San Diego, CA: $97,395

Orlando, FL: $92,243

San Antonio, TX: $89,949

Miami, FL: $89,358

How many properties do agents sell?

Ideally, a real estate agent would like to sell as many properties as possible each year, earning a corresponding salary. In reality, some agents only sell a handful of houses and apartments... it all depends on their clients and the market.

The belief in the real estate industry in the United States is that 20% of agents do 80% of the business... While no agent wants to be part of the 80% who sell very few properties, the reality is sometimes hard to accept!