09/02/2019 by Deb Federico
Real Estate Agent 101
The image of a real estate agent is glamorous. We are entrepreneurs, choosing our own hours, making obscene amounts of money, driving fancy cars and eating in high-end restaurants. Isn’t it what some television shows portray? For a very small minority it might be true but according to an article in Forbes (sourced salary.com) the average real estate agent’s salary as of January 2019 was $41,289. The average can vary widely based on location and the health of the real estate market in the area that the agent works in.
Speaking to clients, I have discovered there are many misconceptions regarding real estate agents. Today’s blog is dedicated to sorting out some of the confusion.
- Not every real estate agent is a REALTOR, but most are. REALTORS have pledged to a higher code of ethics, pay dues to the National Association of REALTORS (NAR) and our local Association of REALTORS for the advocacy of homeownership and the protection consumers across the country. These are a couple examples of the many things that our dues support.
- The Association of Real Estate License Law Officials (ARELLO) estimates there are about 2 million real estate licensees in the U.S. (Approximately 1.3 million members of NAR)
- 87% of REALTORS are independent contractors not employees.
- A real estate agent must work under the umbrella of a Broker (aka Bean Group, Keller Williams, Berkshire Hathaway Home Services, Coldwell Banker….etc.)
- Commission is paid out to the Broker or Brokers involved in a home sale. Real estate agents that worked on the sale are paid a percentage from their broker. Commission can never be paid directly to an agent.
- The median gross income of REALTORS in 2018 was $41,800.
- As an independent contractor we pay our own health insurance and taxes.
- We are small business owners and pay to market ourselves and our client’s listings.
- Apps like Zillow and Trulia charge agents to be featured on their website.
- Generally, real estate agents receive no compensation unless the home successfully closes.
Real estate agents come from all walks of life and may have very diverse personalities, but we collectively believe home ownership provides stability and wealth. We use our experience and knowledge to help you navigate the sometimes very stressful and unpredictable transition of home ownership. For most people this is the biggest financial investment you will own. We understand this. We have chosen to become real estate agents to serve you and our communities.
Thanks for reading.
All REALTOR statistics from NAR publication 2019