Every real estate agent dreams of selling more homes than ever before. But how many houses does a typical realtor sell per year? The answer may surprise you.
According to the National Association of Realtors, an average realtor sells 2 – 12 houses yearly. But if you’re asking how many homes a realtor typically sells in a given period, there’s no good answer.
Every realtor is different and depends on various factors (such as the current market conditions, location, etc.).
In this article, I will discuss how much realtors make in a year, how many houses an average realtor sells, and things that may affect a realtor’s earnings.
What is a realtor?
A realtor is a licensed real estate professional, agent, or broker member of the National Association of Realtors. They help people rent, sell and buy all types of houses or real estate while abiding by the association’s rules or ethics.
How many houses does an average realtor sell per year?
An average realtor sells anywhere from 2 – 12 houses annually in the United States. This is according to the National Association of Realtors.
It may be surprisingly low, but it is not about the numbers but the amount from each deal in this field. Some realtors sell 12 houses per year, and some 7, but the amount they make can still be the same.
How much does an average realtor earn per year?
Realtors are paid based on the commission of the houses they help buy or sell, so they earn no fixed amount. Their income relies solely on their ability to close or finalize deals.
Basically, realtors can work many hours a day or for months and still not be paid. Even after getting paid, various factors might reduce their annual earning capacity.
The Bureau for Labor Statistics estimates that a realtor earns between $30,000 – $300,000 annually. However, they also stated that many factors influence these statistics.
Below are some factors that affect the yearly income of realtors.
1. Commission paid
Realtors work with brokers or agencies that, in return for giving them clients to work with, get a commission off the deal. Depending on the agreement made, it is usually around a 60/40 percent split.
Let’s look at a practical example; let’s say an agent helps sell or buy a house for around $200,000. The average commission rate is about 6%, meaning the realtor gets about $12,000 from that deal.
Now, remember that there are usually two realtors in the deal: the buying and selling ends. So, both sides get to split this commission 50/50, leaving the realtor with $6,000.
As mentioned earlier, the agency or broker the agent works with gets his share of the commission. If the realtor gives the broker a 40% share, he or she is left with $3,600.
Now, let’s say the realtor sells or buys ten houses of the same price; his or her earnings for that year sum up to $36,000. In comparison, if the realtor sells or buys at a higher price, his or her earnings for the year would be higher.
2. Area the realtor buys or sells houses
It is no new thing that the prices of houses vary drastically from city to city. Now, let’s consider how the location can affect their yearly income.
A realtor who deals with houses in major cities like Los Angeles will earn more per house. This is because homes there are sold or bought higher than in average typical towns with few homes.
Although the downside of buying, selling, or renting houses in major cities is that it is generally more competitive, it also requires more time, hard work, and convincing from the realtor to close a deal.
In turn, this affects the number of houses they help clients buy, sell, or rent in a year. However, they might still make as much as those who closed up to 10 deals.
3. Hidden cost
All realtors spend money on various things before closing any deal. It is quite true that brokers or agencies cover marketing and external cost. However, they don’t cover all.
Realtors are expected to pay various fees and dues. Furthermore, they are responsible for their transportation while trying to help buy, sell, or rent a property. These expenses may, in turn, affect the final earnings of the realtor.
Some even after incurring these expenses are unable to close the deal. The realtor ends up losing money rather than gaining from the deal.
4. Level of experience or expertise
Your experience level can greatly affect your yearly earnings as a realtor. Some realtors are major assets to agencies or brokers, earning higher than others.
To further explain, due to their level of expertise, most of these realtors get better commissions than other realtors. Instead of the standard 60/40, they get higher cuts. Sometime it could be 70/30.
The agencies benefit from this deal as they can close top-priority deals through the realtor’s experience. In return, the realtor gets a better cut.
Is becoming a realtor right for you?
As with any other career in sales, your success is determined by how much work you put into it. If you work adequately and effectively, a career as a realtor can be the best choice for you.
FAQs
Is being a realtor hard?
No, it isn’t. Being a realtor is very easy; this is why there are over 3 million licensed realtors in the US.
How long does it take to be a realtor?
Being a realtor can take 1 – 6 months, depending on the process used. Online courses usually take long as you work at your own pace, while in-person courses are generally faster.
How much can you acquire a realtor license?
The course you must take to acquire this license usually costs around $800 – $1,000.
What is the estimated yearly earning of a first-year realtor?
Basically around $40,000. However, it would be best if you remembered that other factors may affect these earnings. Ranging from the location of the properties and your commission rate as a realtor.
Conclusion: Is being a realtor worth it?
A career as a realtor can be quite challenging. This is because it is very competitive and requires hard work and commitment. However, it is a highly-valued profession, and it is worth it.
If you enjoy working with people and you are good at negotiating or convincing clients, then a career as a realtor is worth considering.
I hope you enjoyed this article. Read more interesting content like this on LMS Hero.
Thanks for reading.
