Get to Know Everything About Real Estate Salaries
A career in real estate does seem like a dream job opportunity. You get to work with people and help them fulfill their dreams of buying their own homes. You can set your own hours and have a fair degree of flexibility when it comes to your workday management. You have a wide range of opportunities to enhance your skills. And the key factor is that your earnings are above par if compared to other professions requiring a similar skill-set.
When it comes to the term real estate, the two most common thoughts that come up in people's minds are investment and real estate agent. Yes, you could earn well from either of these two avenues. However, we are today going to elaborate on the different real estate career choices you have and how much income you can make in each of these career paths.
However, before we delve into the details of how much average real estate professionals' earnings are per year, let us go over some key facts about the real estate field.
Key Statistics About Real Estate
Before you are ready to opt for a career path you must be sure about the earning potential of that particular field. It is true that one must follow one's passion but what is wrong with making money and having good earnings each year? So, here are some key statistics about the real estate business.
Despite the pandemic putting a wrench in all other professional spheres, the real estate market registered growth. Compared to 2019 wherein the sale numbers stood at 6 million homes in the country. The data for 2020 had a clear growth and the sale figures were at 6.5 million homes. This data is further projected to register growth and go up to 7.1 million homes.
There are close to 2 million real estate agents and the number keeps surging every year. A testament to the fact that this is definitely a profitable career path with a very good earning potential.
In the country, there are currently around 106,548 brokerage firms. Which gives a fair idea of the employment opportunities.
So now we shall elaborate on the career in real estate choices and your average per annum earning potential along with the expenses you would need to incur.
Real Estate Career Paths
Residential Real Estate Agent
The first point in your real estate career trajectory is to become a real estate agent. In order to obtain a real estate agent license, you would have to enroll in a pre-licensing course according to the state stipulated mandatory number of hours. For instance, in South Carolina, you would have to undergo a training of 60 hours in order to be eligible to appear for the license test. The cost of the course and the exam application fees and post-exam documentation costs would vary from state to state but the initial expenses are small compared to the gains you get after becoming a real estate agent.
A residential real estate agent represents the interests of either the buyers or the sellers during the property or home sales and purchases. As mentioned above the income for this type of agent is the commission earned through each sale.
The real estate agents are paid on a commission basis. That is a percentage of successfully completed property sales or purchases. Now, it is mandatory for a real estate agent to be sponsored by a broker. The brokerage fees which is either a percentage of the final deal value or at times a flat fee is paid directly to the brokerage house handling the transaction. Out of this, a commission is paid to the real estate agent. The average income is around $82,898 as reported by real estate agents.
Commercial Real Estate Agent
A commercial real estate agent's expertise lies in dealing with the demand for commercial properties. They assist their clients in the sale, purchase, and long-term leasing of properties. Long-term leases are generally dought by business houses, banks, or any other firms. An agent needs to hold a graduate degree as this is the minimum eligibility criteria. The agents are expected to have studied finance-oriented subjects. They should possess a strong command over various aspects of finance, such as business administration, statistics, and economics.
These additional skills are required due to the fact that, unlike a residential agent, a commercial real estate agent needs to wade through substantial financial data and prepare analytics for the client. So, a good grip over numerical skills is a necessity.
Unlike residential real estate agents, a commercial agent can work on their own, they can join a real estate team or be sponsored by a brokerage house. Depending on the agreement between the real estate agents and their employers, their salaries are around $85,000 per year.
Real Estate Broker
A real estate broker is someone who has gained further education in the field of the real estate business. And has successfully obtained a license to offer his services as a real estate broker. The key difference between a real estate broker and a real estate agent is that a broker can offer his services independently. They can even set up their own brokerage house and recruit other real estate agents to work with them.
Their primary responsibilities remain the same as that of a real estate agent, they would have to assist their client in finding the perfect property for purchase according to the clients' requirements and budgets. Similarly, when working with sellers the broker would offer assistance in identifying the true market cost of the home and suggesting ways in which the seller can enhance the value and help them in obtaining that asking price.
There are three principal categories of real estate brokers. They are categorized according to the responsibility for each category of the broker.
1. Associate brokers — If someone has obtained their broker's licenses, however, if he chooses to work under along with another broker then this broker would be referred to as an associate broker. The primary difference, in this case, would be the fact that an associate broker does not supervise any other agents working in the brokerage house.
2. Managing brokers — These are broker license holders whose main duty is to oversee transactions being out through their brokerage house. They are also responsible for ensuring that the day-to-day operations and administrative workflow are smoothly carried out. They are at times also asked to look after the recruiting, training, and managing of new staff members.
3. Principal/designated brokers — These are brokers who are tasked with the entire supervision of all the real estate agents working for the brokerage house to make sure they are in compliance with state and national real estate laws. Each real estate office has one designated broker.
Similar to a real estate agent, a real estate broker is also earning through commissions from the successfully concluded sales and purchases. The key difference in the earnings comes from the fact that all the agents working under a broker have to split their commissions from all the completed deals. So, although as a broker a person might be directly handling one or two clients a month, they are also supervising all the other agents and their deal, due to this they have multiple incomes each month. On average, the annual income of an experienced broker is around $100514 a year. This number could go higher based on the geographical location and brokerage services offered.
A term that you would have come across fairly frequently, a realtor is not the same as a real estate agent. A realtor is an agent who has obtained further qualifications and years of experience than an agent. A realtor also needs to have enrolled in the National Association of Realtor (NAR). The National Association of Realtor is the apex body which frames and governs the guidelines for all realtors in the nation. It is mandatory for a real estate agent to have paid the membership fees and joined NAR. They must also always abide by the strict code of conduct as prescribed by the realtor's association.
The prime benefit of becoming a part of NAR is that the real estate agent gets to use the term realtor. People value this as it signals that they can trust this agent to deliver on his promises. Apart from the usage of the term, there are many perks of becoming a realtor, such as access to real estate-related national-level data, further training, and opportunities to network with pan nation realtors.
Similar to the income earned by a real estate agent a realtor also gets paid a commission on each satisfactorily concluded deal. The commission fee is usually slipt between the buyer's agents and the seller's agents. The fee generally comes from the listing agreement agreed upon between the sellers and their agents. On average, a realtor can expect to earn upwards of $83690 per year. As a realtor gets to work independently they can choose their work hours and have a better work-life balance.
Real Estate Consultant
The final career path that we have rounded up for you is a real estate consultant. They are also at times referred to as real estate advisors or real estate counselors. This is the only category wherein the agent is not directly involved in the purchase or sale of the property. The main role of a real estate consultant is to offer investment-related guidance to their clients.
Their clients are large-scale property developers seeking a consultant for financial and market-related advice for investing in property with an eye for its value appreciation post-development. The real estate consultants also handle clients who are buyers from having a pure investment perspective.
They do the groundwork and carry out extensive research on behalf of their large-scale clients. They ensure that every aspect of the deal has been thoroughly vetted before giving their seal of approval. For instance, if they find out that the property under discussion is stuck in some sort of litigation or new zoning laws may impede the client's plan for the property they would try to safeguard their client's interest. Their goal is not to manage the actual transactions of the property; rather they work hard to ensure that their client's investment is safe and is profitable in the long run.
Although a real estate consultant does possess a license, they mainly work for large consulting firms and handle high-value clients. The income potential of this particular career choice depends on the firm a consultant is employed in and the kind of clients they are dealing with. Their income is generally a flat or hourly charge for offering their expertise. The average income of real estate consultants is around $93,967 per year. This number could go higher based on the firm and the consultant's experience.
When it comes to the real estate world there are many more career opportunities and career paths than just being a real estate agent. No doubt getting your real estate agent's license is the foundation for all of these career verticals. Depending on your drive and willingness to learn in order to move up the rungs of success, you can achieve the kind of career goals along with the monetary recompense that you wish. Like any other field, this profession also comes with its own set of challenges but for people who are dynamic and are willing to put in the hours, this could be a fulfilling career option.
In this article, we have strived to introduce to you and broaden your idea about the scope of your career within the ambit of real estate. This primer could help you chalk out your journey to joins the ranks of real estate professionals along with providing you a basic overview of various real estate agent salaries. Using this as a stepping stone you would be able to achieve your goals of creating a niche for yourself among real estate agents.