According to the National Association of Realtors (NRA), the average real estate agent sells 4 homes per year. Even with the median U.S. home selling for $219,800 (Source: NRA) in September of 2006, this suggests less than a $20,000 annual salary for the average real estate agent.
For those who are not familiar with the real estate industry and commissions, real estate agents are paid for listing and selling a house. The average real estate commission fee is around 6%, but that does not mean the agent receives 6%. This fee is split 50/50 between the listing broker and the selling broker. If the agent works for a broker, then this fee is once again split 50/50 with the broker receiving 1.5% and the agent receiving 1.5%.
Simply speaking for each $100,000 sold, the real estate agent receives $1,500 For the median home, this translates into $$3,297 per home or $13,1888 annually. Even if the agent is selling higher end homes around $500,000, then the annual sales for the agent is $2,000,000 ($500,000 times 4 homes). Using 1.5% commission, the agent is bringing home $30,000.
Since the data from the NRA also suggests that 10% of the agents account for 90% of all transactions (selling and listing), the average of 4 homes per year sold by real estate agents makes sense. So what can you do as a real estate agent not to be average and to make more than $20,000 a year?
Remember these 2 statements:
Motion does not mean progress. Activity does not mean results.People confuse motion with progress. For example, the realtor is out making contacts (motion), but not making appointments and not closing sales(progress).
Additionally, people confuse activity with results. An activity would be a networking event or a luncheon meeting. Results are securing signed contracts.
To stop this confusion begins by tracking your daily efforts and establishing your sales to close ratio. For example 100 calls or contacts, delivers 20 appointments, yields 10 meetings and turns into 1 sold or listed home. When you have actual hard and measurable numbers, you can increase your activity knowing that your results will also increase. You will then turn from the average realtor into the above average realtor and earn more than $20,000 per year.
P.S. If you would like to be really successful real estate agent, read the Top 7 Tips for Real Estate Agents' Success
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