Suppose you're thinking about pursuing a career in real estate or are interested in the compensation structure for California agents. In that case, you're probably curious about the average real estate agent's salary.
This is a tricky question because it is highly variable and dependent on individual markets, agent activity, and the types of homes they sell.
The idea of a salary is a misnomer. While a "salary" suggests a steady paycheck with a defined amount of money paid each month or year, real estate agents primarily work on a commission basis. There are some exceptions to this—for instance, flat-fee brokerages with salaried employees. However, agents are generally considered independent contractors and paid based on a percentage of their sales.
What is the California real estate agent salary average?
The current annual compensation for California real estate agents is $100,135, according to the job site Indeed. Of course, this figure is weighted upward by high-performing luxury agents who may earn millions of dollars each year. In contrast, other agents may only complete a transaction or two each year for friends or former clients to keep their licenses' active.
In addition real estate agent salaries can widely range depending on location, education background, and years of professional experience. According to research from Salary Explorer, the lowest average salary is $46,500 to the highest average of $216,000.
Agent compensation is based on a variety of factors:
Number of transactions per year
Because real estate agents are generally paid on a commission basis—in California and elsewhere—the number of transactions can significantly impact the agent's expected earnings each year. In most cases, buyers and listing agents are each paid a 2.5% to 3% commission on the total sale price of the transaction.
Average market price per year
Different markets have different average sales prices. For example, the average home price in California is $818,260, according to the California Association of Realtors. In contrast to the average U.S. home price of $298,933. Thus a real estate agent in California can expect far higher compensation than one in a less expensive market.
Even within the state, there is a significant difference among markets. More expensive homes are located in desirable coastal and metropolitan areas—juxtaposed with more modest homes in suburban and rural markets.
Market segment or niche
A real estate agent's compensation can vary depending on the market segment they serve. For example, a real estate agent specializing in luxury properties may expect to earn far more than one specializing in more modest starter homes or condominiums. Likewise, someone who works with sprawling ranches or agricultural properties may earn more commissions than someone specializing in single-family homes. In addition, real estate agents with highly specialized skills in legal and financial matters may also make more in comparison to those with basic licensure and average qualifications.
Additional compensation
In some cases, real estate agents may receive additional compensation based on their work within the brokerage or in some other aspect of the real estate market. For example, agents who work with large-scale real estate investors, property management specialists, and robust referral networks may earn additional commissions, bonuses, or salaries on top of their sales commissions.
What is the New York real estate agent salary average?
According to Indeed, the average salary for a real estate agent in New York is $86,353, considerably lower than the figure for California. Keep in mind that this can vary significantly depending on which market you're serving, with luxury agents in New York City earning far more than agents in less affluent areas upstate.
How can a real estate agent increase their income?
Whether you are a listing or buyer agent, there are many ways to increase your earning potential, no matter where you are located.
- Determine how to generate more leads to serve more clients and earn more commissions each year. Additional advertising, cultivating referrals from past clients, or working on a real estate team provides lead generation opportunities.
- Increase your expertise through earning your broker's license or through certifications at the associational level. Many of these can provide the additional professional qualifications to serve specialized client needs and more complex transactions.
- Look at your local market and seek out ways to specialize in the most profitable properties there. These could include luxury properties in resort-style communities, apartments and condominiums located in exclusive high-rise developments. Other options are sprawling estate homes, farms, or ranches in more rural areas. Develop your expertise in these properties and, if possible, partner with an agent or brokerage established in the niche you wish to pursue.
- Connect with investors in your area by participating in real estate investor meetups and networking events. Develop a boots-on-the-ground system for finding pre-market and off-market properties in your area and make yourself a valuable and consistent source of potential deals for investors you partner with. Over time, you may find that the higher volume of these transactions and your ability to get them completed quickly will provide significant additional compensation.
- Develop affiliate services like staging, property management, or concierge relocation assistance. This can create a valuable add-on that you can market both to your own clients and to colleagues in the area who do not currently offer these services.
As a real estate agent, you have many ways to earn more year over year. Not sure what kind of compensation to expect this year through your work as a real estate agent? Calculate your projected sales, then use Rentspree's commission calculator to find out how much you may be able to earn.
