Real Estate Agents are Independent Contractors
A Real Estate agent pays for the privilege of having a Real Estate license at a Brokerage. The agent works on behalf of the Broker as an independent contractor. The agent is a representative of the Brokerage, and in a previous post, I outlined the difference in how the agent is paid by the Brokerage.
Being a Real Estate agent is very hard work. It is constant. You are paid by how well you manage your time, contacts, follow up, and lead generation. Every one is a client, and 97% of the people who buy or sell a home use an agent. The number one reason people rely on agents is that buying and selling a residence is an emotional process.
Starting out as a sales agent for a Real Estate company is stressful. You are constantly trying to make something happen so you can get a pay check. This is the stage most people dread as both an agent or clients in general. It can be a push and shove phase of awkwardness.
After the first couple of years agents fall into a routine. Most days are spent on lead generation, on the phone, or by mail, open houses, and social networking. It’s important for the agent that they are visible. The internet today is playing a big part of that, but it is a small part. Most people meet an agent at an open house, they are called, or at a social, or professional event.
Once an agent is established there are more possibilities they will be contacted. More exposure establishes an agent as a resource. In that three to five year period an agent finds a niche to work. Many times it’s by geographical networking. Some agents go door to door, build a database and work that for years to come.
So it takes at least five years for an agent to figure out the business and at that five year mark an agent is eligible to become a Broker.
During those first few years an agent can expect to make about $16K per year, if they are good. After a couple of years they can make $24K to $32K. After five years the average pay for a Real Estate agent is $42K per year. The agent will also spend money on advertising so Open Houses and the telephone are the preferred first year marketing tools.
After five years in the Real estate business an agent has some contacts to work with and the lead generation gets easier. The follow up is essential, but the pay scale moves up a little bit. The average per hour pay scale is $22 per hour.
Let me remind you that we all have expectations of what a successful Real Estate agent looks like. It costs money to make money in this business.