Occupation Profile for Real Estate Sales Agents
Rent, buy, or sell property for clients. Perform duties, such as study property listings, interview prospective clients, accompany clients to property site, discuss conditions of sale, and draw up real estate contracts. Includes agents who represent buyer.
Signficant Points
- Real estate brokers and sales agents often work evenings and weekends and usually are on call to suit the needs of clients.
- A license is required in every State and the District of Columbia.
- Although gaining a job may be relatively easy, beginning workers face competition from well-established, more experienced agents and brokers.
- Employment is sensitive to swings in the economy, especially interest rates; during periods of declining economic activity and rising interest rates, the volume of sales and the resulting demand for sales workers fall.
Earnings
The median annual earnings, including commissions, of salaried real estate sales agents were $39,760 in May 2006. The middle 50 percent earned between $26,790 and $65,270 a year. The lowest 10 percent earned less than $20,170, and the highest 10 percent earned more than $111,500. Median annual earnings in the industries employing the largest number of real estate sales agents in May 2006 were:
| Residential building construction | $53,390 |
| Land subdivision | 49,230 |
| Offices of real estate agents and brokers | 39,930 |
| Activities related to real estate | 36,510 |
| Lessors of real estate | 32,580 |
Median annual earnings, including commissions, of salaried real estate brokers were $60,790 in May 2006. The middle 50 percent earned between $37,800 and $102,180 a year. Median annual earnings in the industries employing the largest number of real estate brokers in May 2006 were:
| Offices of real estate agents and brokers | $64,350 |
| Lessors of real estate | 61,030 |
| Activities related to real estate | 48,250 |
Commissions on sales are the main source of earnings of real estate agents and brokers. The rate of commission varies according to whatever the agent and broker agree on, the type of property, and its value. The percentage paid on the sale of farm and commercial properties or unimproved land is typically higher than the percentage paid for selling a home.
Commissions may be divided among several agents and brokers. The broker or agent who obtains a listing usually shares the commission with the broker or agent who sells the property and with the firms that employ each of them. Although an agent’s share varies greatly from one firm to another, often it is about half of the total amount received by the firm. Agents who both list and sell a property maximize their commission.
Income usually increases as an agent gains experience, but individual motivation, economic conditions, and the type and location of the property affect earnings, too. Sales workers who are active in community organizations and in local real estate associations can broaden their contacts and increase their earnings. A beginner’s earnings often are irregular because a few weeks or even months may go by without a sale. Although some brokers allow an agent to draw against future earnings from a special account, the practice is not common with new employees. The beginner, therefore, should have enough money to live for about 6 months or until commissions increase.
Job Outlook
Average employment growth is expected because of the increasing housing needs of a growing population, as well as the perception that real estate is a good investment. Beginning agents and brokers face competition from their well-established, more experienced counterparts.
Employment change. Employment of real estate brokers and sales agents is expected to grow 11 percent during the 2006-16 projection decade—about as fast as the average for all occupations. Relatively low interest rates and the perception that real estate usually is a good investment may continue to stimulate sales of real estate, resulting in the need for more agents and brokers. However, job growth will be somewhat limited by the increasing use of technology, which is improving the productivity of agents and brokers. For example, prospective customers often can perform their own searches for properties that meet their criteria by accessing real estate information on the Internet. The increasing use of technology is likely to be more detrimental to part-time or temporary real estate agents than to full-time agents because part-time agents generally are not able to compete with full-time agents who have invested in new technology. Changing legal requirements, such as disclosure laws, also may dissuade some who are not serious about practicing full time from continuing to work part time.
Job prospects. In addition to job growth, a large number of job openings will arise from 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 are most other workers. Historically, many homemakers and retired people were attracted to real estate sales by the flexible and part-time work schedules characteristic of the field. These individuals could enter, leave, and later return to the occupation, depending on the strength of the real estate market, their family responsibilities, or other personal circumstances. Recently, however, the attractiveness of part-time real estate work has declined, as increasingly complex legal and technological requirements are raising startup costs associated with becoming an agent.
Employment of real estate brokers and sales agents often is sensitive to swings in the economy, especially interest rates. During periods of declining economic activity and rising interest rates, the volume of sales and the resulting demand for sales workers falls. As a result, the earnings of agents and brokers decline, and many work fewer hours or leave the occupation altogether.
This occupation is relatively easy to enter and is attractive because of its flexible working conditions; the high interest in, and familiarity with, local real estate markets that entrants often have; and the potential for high earnings. Therefore, although gaining a job as a real estate agent or broker may be relatively easy, beginning agents and brokers face competition from their well-established, more experienced counterparts in obtaining listings and in closing an adequate number of sales.
Well-trained, ambitious people who enjoy selling—particularly those with extensive social and business connections in their communities—should have the best chance for success.
Employment
In 2006, real estate brokers and sales agents held about 564,000 jobs; real estate sales agents held approximately 77 percent of these jobs.
Many real estate brokers and sales agents worked part time, combining their real estate activities with other careers. About 61 percent real estate brokers and sales agents were self-employed. Real estate is sold in all areas, but employment is concentrated in large urban areas and in rapidly growing communities.
Most real estate firms are relatively small; indeed, some are one-person businesses. By contrast, some large real estate firms have several hundred agents operating out of numerous branch offices. Many brokers have franchise agreements with national or regional real estate organizations. Under this type of arrangement, the broker pays a fee in exchange for the privilege of using the more widely known name of the parent organization. Although franchised brokers often receive help in training sales staff and running their offices, they bear the ultimate responsibility for the success or failure of their firms.