When it comes to real estate, agents are the ones who make everything happen. They are the go-between for buyers and sellers, and their skills and expertise can mean the difference between a smooth transaction and a total disaster. So it’s no wonder that many people want to become real estate agents. But what does it take to be successful in this career? And how much can you expect to earn? Let’s take a closer look.
How much money can you make as a real estate agent?
Many people are interested in becoming a real estate agent because of the potential to make a lot of money. But how much money can you really make? And how does it vary based on experience, real estate market, and other factors? These are all factors in real estate agent pay.
There is no simple way to estimate a real estate agent salary. Real estate agents typically do not earn a base salary. They are paid a commission on any sales they help broker. How much commission they earn depends on the sale price of the property.
So how much can you expect to make in the real estate industry? It really varies based on your experience, the broker you work with, and the location in which you sell. But generally speaking, most real estate agents earn between $50,000 and $100,000 per year. Of course, there are some agents who earn much more than that, and there are also some who earn less.
It’s important to keep in mind that these numbers are just averages. Your salary as a real estate agent may be higher or lower depending on your skills and experience, as well as the market conditions in your area. Take a look at our article, What Does a Real Estate Agent Do?
How do real estate commissions work?
As we mentioned, real estate agents typically do not earn a base salary. They are instead paid a commission on each sale they help broker. The commission is usually a percentage of the sale price of the property.
In New Jersey as in most states, a realtor must be connected to a broker where he or she does business. The agent will be required to split their commission with their real estate brokers based on an agreed-upon commission split.
Example of a Real Estate Commission
Let’s say you help to sell a house for $200,000. If the commission rate is 5%, the total commission on the sale would be $10,000. The commission is typically split between the buyer’s agent and the seller’s agent and their brokers. So in our example above, if the commission was split evenly, each broker would receive $5,000 to then be split with their agent based on the agreed-upon commission split.
Some real estate agents also receive what’s known as a “bonus” or “override” from their broker. This is an additional amount of money that the broker gives to the agent, above and beyond the commission that they earn on each sale. The amount of the bonus or override can vary based on the broker, but it’s typically a percentage of the total commission earned.
For example, let’s say you help to sell a house for $200,000 and the commission rate is 5%. The total commission on the sale would be $10,000. If your broker has a 50/50 split with their agents and also offers a 10% override, you would earn a total of $6,000 from the sale ($5,000 + 10% of $5,000). This is not extremely common in the New Jersey markets.
What skills and experience are helpful for real estate professionals to succeed?
If you’re considering a career in real estate it’s important to understand some of the key skills needed to succeed. Following is a list of a few key skills we feel are most important:
Be able to negotiate well
As a real estate agent, you’ll be responsible for negotiating both the sale price of properties and also the commission rate that you’ll earn on each sale. So it’s important to be able to negotiate well in order to get the best possible outcome for yourself and your clients.
Have excellent communication and people skills
In order to be successful in real estate, you need to have excellent communication and people skills. This is because you’ll be dealing with a lot of different people on a daily basis, including buyers, sellers, landlords, tenants, and other real estate agents.
You will also be working with attorneys, lenders, home inspectors, and title agents. You need to be able to effectively communicate with all of these different groups of people in order to do your job well.
Be able to work independently
Real estate agents typically work independently, so it’s important to be able to work well on your own. This means being self-motivated and organized, as well as being able to keep track of your own appointments and deadlines.
It’s also important to be able to generate your own leads since you won’t have anyone else to rely on for new business. You should expect to get out what you put in when it come to being a real estate agent.
Be organized and efficient
Since real estate agents typically work independently, it’s important to be organized and efficient in your work. This means keeping track of your own appointments and deadlines, as well as being able to quickly and efficiently find the information that your clients need.
You should also have a system in place for tracking leads and following up with potential clients. The more organized and efficient you are, the more successful you’re likely to be as a real estate agent. As your business increases you may consider looking into several companies that offer services as a transaction coordinator. These companies will take over many administrative duties once you get a client under contract for a sale.
Have a good understanding of contracts
As a real estate agent, you’ll be responsible for drafting and reviewing contracts for your clients. So it’s important to have a good understanding of contract law. You should also be familiar with the different types of contracts used in real estate, such as purchase agreements, lease agreements, and listing agreements as a listing agent.
If you don’t feel confident in your ability to draft and review contracts, you may want to consider working with an attorney or real estate broker who can help you with this aspect of your job. This may take time to get comfortable but the key is to continue asking questions and getting assistance as needed.
In order to become a licensed real estate agent in New Jersey, you must first complete the 75-hour pre-licensing course from an approved real estate school. Once you’ve completed the course, you’ll need to pass the state’s real estate licensing exam.
After you’ve passed the exam, you’ll need to submit your application for a real estate license to the New Jersey Real Estate Commission. Once your application is approved, you’ll be issued your license. Once you decide on the real estate broker that you will be working with you’ll be able to start practicing as a real estate agent in the state of New Jersey.
What are some of the challenges and rewards of being a real estate agent?
In short, some of the challenges of being a real estate agent include long hours, irregular work days, and working on weekends. While some of the rewards of being a real estate agent include the flexibility to set your own schedule, the opportunity to make a good income, and the satisfaction of helping people buy or sell their homes. Following we discuss these elements in a bit more detail:
The challenges of being a real estate agent
The hours can be long
One of the challenges of being a real estate agent is that the hours can be long and irregular. You may find yourself working late nights and weekends in order to accommodate your clients’ schedules.
This can make it difficult to maintain a work-life balance, which is why it’s important to make sure that you’re comfortable with the irregular hours before you start working as a real estate agent.
The work can be stressful
Another challenge of being a real estate agent is that the work can be stressful. You may have to deal with difficult clients, tight deadlines, and last-minute changes. This can be especially challenging if you’re working with buyers who are trying to purchase a home in a competitive market.
It’s important to be able to handle stress well if you’re considering becoming a real estate agent. Otherwise, you may find yourself feeling burned out and overwhelmed by the demands of the job.
The rewards of being a real estate agent
The flexibility to set your own schedule
One of the rewards of being a real estate agent is that you have the flexibility to set your own schedule. This means that you can work around your personal commitments, such as childcare or other obligations.
However, it’s important to keep in mind that you’ll need to be available when your clients are available, which may mean working evenings and weekends.
The opportunity to make a good income
Another reward of being a real estate agent is that you have the opportunity to make a good income. Real estate agents are typically paid on commission, which means that they earn a percentage of the homes that they sell.
The average real estate agent in the United States earned a commission of $5,730 in 2019, according to the National Association of Realtors. However, agents who work in high-end markets or who have a lot of experience can earn significantly more than this.
The satisfaction of helping people buy or sell their homes
Finally, another reward of being a real estate agent is the satisfaction of helping people buy or sell their homes. This can be a very rewarding experience, especially if you’re able to help someone purchase their first home.
Becoming a real estate agent can be a great way to start a new career. Just make sure that you’re aware of the challenges and rewards of the job before you get started.
Becoming a real estate agent can be a great way to start a new career and make a great income. Just make sure that you’re aware of the challenges and rewards of the job before you get started. In this article, we’ve discussed some of the challenges and rewards of being a real estate agent. We’ve also talked about how to become a real estate agent in New Jersey and what you can expect from a real estate agent’s salary. Are you thinking about becoming a real estate agent? The best place to get started on your real estate journey is The Ocean School of Real Estate.
Frequently Asked Questions
Q: How is a commercial real estate agent paid?
A: Commercial real estate agent salaries are typically a commission similar to a residential real estate agent, which is a percentage of the sale price of the property. The national average commission for a commercial real estate transaction is 6%.
Q: Do real estate agents need a college degree?
A: While there are no formal education requirements to become a real estate agent, most states require that agents take a certain number of classes and pass an exam before they can receive their license.
Q: What is the difference between a real estate agent and a broker?
A: A real estate agent is a licensed professional who helps people buy or sell property. A broker is a more experienced agent who has additional training and who also supervises other agents.