For entrepreneurs like real estate agents who hustle for their income, every penny counts. Return on investment is important and agents will spend money on technology if it brings in new business. Let’s take a deeper look into the income and how business is generated according to the 2017 Member Profile.
The median gross income for all agents in 2016 was $42,500 and the net income (after taxes and expenses) was $26,820. For members with less than two years of experience, the median gross income was $8,930 and net income was $7,690. For those with 16 or more years of experience, the median gross income was $78,850 and their net income was $46,790.
Income for agents predominantly come from selling homes. Forty-six percent receive 100 percent of their income from their real estate specialty, and another 33 percent receive 50 to 99 percent of their income from real estate. Seventy percent of members surveyed said their primary specialty is residential brokerage and 70 percent are sales agents.
Thirty-five percent of real estate agents receive a fixed commission split (under 100%), 26 percent receive a graduated commission split (increases with production), and 14 percent receive a capped commission split (rises to 100% after a predetermined threshold). Many agents, however, supplement their income from other areas of the real estate business with a secondary specialty, such as relocation services (16 percent), residential property management (14 percent), and commercial brokerage (12 percent).
This paints a picture of the typical real estate agent. Half of all members get their income entirely from their primary real estate specialty, where two-thirds specialize in residential real estate and two-thirds are sales agents.
Source of Income
The typical REALTOR® received 13 percent of their business from repeat customers and clients. For agents that have 16 years of experience or more, that figure increased to a median of 36 percent from repeat business clients, compared to agents that have two years of experience or less that said they received no repeat business.
The typical REALTOR® received 18 percent of their business from referrals of past customers and clients. For agents that have 16 years of experience or more, that figure increased to a median of 25 percent from referrals, compared to agents that have two years of experience or less that said they received no business from referrals.
The typical REALTOR® brought in one percent of their business from their website. Agents that spent more than $1,000 on their website brought in six percent of their business from their website. Sixty-three percent of agents said they brought in no business from open houses and 24 percent said they received 10 percent or less of their business from an open house.
Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission.