In its heyday, real estate was one of the most lucrative careers in the U.S. Top agents and brokers could easily make six (or even seven) figures a year doing what they loved—selling homes and commercial properties. Today, the market has obviously cooled, so it’s a bit tougher for agents and brokers to make a buck. However, according to financial analysts and the Bureau of Labor Statistics, the real estate industry is far from dead. In fact, because home prices and interest rates are so incredibly low, right now is the best time to buy. What this means is, although real estate agents and brokers may make less per sale than they’re used to, there are lots of sales to be made. So, if you want to break into the real estate industry and you’re willing to wait, say 3-5 years for the industry to really bounce back, you could end up making a very lucrative living down the line.
Employment in Real Estate at a Glance
According to the Bureau of Labor Statistics’ Occupational Outlook Handbook (2010-2011), employment of real estate brokers and agents is expected to grow faster than average for the 2008-2018 decade. The industry is still very competitive, with well-established, more experienced brokers and agents leading the pack. Beginners do face an uphill battle, but can use the time to learn the ropes, establish themselves, and prepare for better days down the line. As such, the Bureau suggests that beginners have enough money to live for about 6 months or until commissions increase.
The Bureau of Labor Statistics (BLS) reports that employment of real estate brokers and sales agents (combined) is expected to grow 14 percent during the 2008-18 decade, which is faster than average for all occupations. Separately, employment of real estate agents is expected to grow 16 percent and real estate brokers is 9 percent, for an average of 14 percent overall.
Brokers and agents can expect job growth based on “a growing population, particularly young adults, who will be forming households in greater numbers.” These buyers will require the services of real estate agents and brokers to buy their homes. In addition, although some argue that renting rules right now, millions of people still believe in the American Dream. This means owning a home. According to BLS, home sales will be sparked by the continuing desire for people to own their own homes and their perception that real estate will be a good investment over the long run.
According BLS, in addition to job growth, agents just entering the field can expect a large number of job openings based on the need to replace workers who transfer to other occupations or leave the labor force. Real estate brokers and sales agents are older, on average, than most other workers, and many are expected to leave the occupation over the next decade.
Salaries for Real Estate Brokers and Agents
Today’s real estate industry is no place for part-timers. If you are ambitious, well trained, enjoy selling, and have “extensive social and business connections” you will have the best chance of success. In addition, large urban areas and “rapidly growing communities” are the best places for real estate. Employment is heavily concentrated in these areas.
The Bureau reports average salaries for agents and brokers, but keep in mind that commissions are the main source of earnings in this industry and they vary greatly “according to whatever the agent and broker agree on, the type of property, and its value.” Region may play a role as well. While commissions can be all over the board, several years ago, the National Association of Realtors reported an average commission rate of 5.2 percent across the nation, with a range between 5 and 7 percent. Again, average salaries should be taken with a grain of salt. According to BLS:
The median annual wages, including commissions, of salaried real estate sales agents were $40,150 in May 2008. The middle 50 percent earned between $27,390 and $64,820 a year. The lowest 10 percent earned less than $21,120, and the highest 10 percent earned more than $101,860. Median annual wages, including commissions, of salaried real estate brokers were $57,500 in May 2008. The middle 50 percent earned between $36,420 and $93,970 a year.
Residential building construction offered the highest median average annual wages at $63,280 per year for real estate brokers and $49,620 per year for real estate agents.
Becoming a Real Estate Agent or Broker
Yes, to be a successful agent or broker, you have to have a pleasant personality and be trustworthy, mature, and enthusiastic about selling real estate, but in today’s competitive real estate industry, you need much, much more. A high school diploma is the minimum requirement to break into the industry, but many firms wont even look at an applicant that has less than a bachelor’s degree. Common degrees for this field include real estate, finance, law, business, economics, accounting, and marketing.
Whether you have a high school diploma or a bachelor’s degree, you must be licensed to become a real estate broker or agent. This means you’ll have to pass a written examination. Many states also require 30-90 hours of classroom instruction. Broker’s must take a more comprehensive exam and have between 60 and 90 hours of formal training, and typically 1-3 years of experience selling real estate. In some states, a bachelor’s degree in real estate may allow you to waive the experience requirements to become a licensed broker.
Because laws are always changing, among other things, many states require continuing education for license renewals. Brokers and agents must renew their licenses every 1-2 years, depending on state requirements. Contact your state real estate licensing commission for specific licensing requirements. Visit Nationalrealtorsdirectory.com for contact information for each state commission.
