Real estate agents’ salaries vary depending on their job description, whether they work in sales or non-sales roles, and whether they work in residential or commercial real estate. Incentive pay can also affect their total compensation, and brokers who close their own deals can earn six or seven-figure incomes. Ultimately, an agent’s work ethic and productivity determine their salary.
With a wide variety of possible job descriptions, a real estate agent’s salary can vary greatly. One of the main determinants of a realtor’s salary is whether the realtor uses his license to do business on his own account or acts as a manager for a realtor, setting a set salary with incentive pay. Furthermore, real estate agents can also use their license for positions completely unrelated to selling real estate, which can also affect their salary.
One of the most important factors in determining a real estate agent’s salary is whether they are involved in a sales role or have a non-sales staff position. In a sales position, a real estate agent typically earns some or all of his income from incentive pay. A real estate agent’s salary for work outside of sales will generally be higher, but the agent will have fewer, if any, incentive pay opportunities, often resulting in lower total compensation.
The typical real estate agent acts as a sales agent and also employs other salespeople. He usually works as a contractor, receiving compensation for closing deals rather than a salary. For brokers who close their own deals and close a portion of each deal for sellers, this deal can be extremely lucrative, and in 2011 it is not uncommon for brokers working as sales agents to earn six-figure incomes. Other brokers receive a salary and a small gap on transactions. In exchange for the security the salary brings, the lower performance-based pay share means they often earn less in good years when they perform well.
Real estate agents typically work on the residential or commercial side of the business. Generally speaking, commercial realtors beat residential realtors by a large margin. On the other hand, commercial real estate brokerage is a much more difficult business to break into, whereas those who can obtain a license can become a residential realtor and start their own real estate agency.
An individual broker’s work ethic and productivity ultimately determine his salary and other income. Many realtor license holders work part-time, selling homes on the weekends or chasing the elusive “big pay” in the commercial field, and earn relatively little. Others work consistently and have a good strategy, whether on the residential or commercial side, and can earn income in the high six figures, with some commercial brokers making seven figures.
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