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 per year. But if you’re asking how many houses a realtor typically sells in a given period of time, there’s really no good answer to that.
Every realtor is different and depends on a variety of 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 in a year, and things that may affect a realtor’s earnings.
Who is a realtor?
A realtor is a licensed real estate professional, agent, or broker who is a 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 per year in the United States. This is according to the National Association of Realtors.
It may be surprisingly low, but in this field, it is not about the numbers but the amount from each deal. 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 there is no fixed amount they earn. 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 earning capacity per year.
The Bureau for Labor Statistics estimates that a realtor earns between $30,000 – $300,000 per year. 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 help sell or buy a house for around $200,000. The normal commission rate is around 6%, so that means the realtor gets around $12,000 from that deal.
Now, remember that there are usually two realtors in the deal, the buying end and the selling end. So, both sides get to split this commission 50/50, leaving the realtor with $6,000.
As earlier mentioned, the agency or broker the agent works with gets his own 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 10 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 automatically earn more per house. This is because houses there are sold or bought higher than in normal average cities with few houses.
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 own 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 play a huge role in your yearly earnings as a realtor. There are some realtors that are major assets to agencies or brokers, and these realtors earn higher than others.
To further explain, most of these realtors, due to their level of expertise, 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 kind of deal as they are able to 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.
Is being a realtor hard?
No, it isn’t.
Being a realtor is basically 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 any time between 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 usually faster.
How much can you acquire a realtor license?
The course you need to 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, you must remember 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.