Realtors make big money, driving around in fancy cars, cashing six-figure checks and taking money baths every night.
Realtors struggle and scrape just to get by, earning a modest average income per hour, and many of them have to work second jobs or leave the business because they don’t make enough.
Which one is the truth?
Like anything, the truth probably lies somewhere in between, as selling real estate can be a lucrative and profitable career – or a marginally-profitable part-time job.
In this ongoing series, we’re examining the data on Realtor salaries from several different viewpoints. In part one, we took a broad look at Realtor salaries.
And today, I’m going to measure average Realtor income based on a different factor – seniority, or how long they’ve been working in the business.
So, does it pay to be a Realtor? Let’s find out!
The National Association of Real Estate (NAR) tracked another interesting statistic: the percentage of Realtors based on experience level whose sole occupation is real estate (not part-time).
They found that among all Realtors, 74% were full-time sales professionals, which means they didn’t have a 9-to-5 job, primary job, or second job above and beyond real estate.
But the data breaks in an interesting way within that 74% of Realtors that are full-time.
For those with two years or less experience, only 63% are full-time. That means less than two-thirds of all Realtors that have been in the business 24 months or less have not yet fully committed professionally to their vocation of buying and selling homes.
However, if they make it to the 3-5 year mark in the business, they are full-time at a 71% clip.
That keeps going up, to 76% for Realtors with 6-15 years experience,
And real estate professionals who have 16 or more years of experience (we call them “Real Estate lifers!”) work solely as a Realtor 86% of the time!
As we’d expect, seniority also plays a big part in the income of Realtors.
The NAR also tallied data for median annual income across the U.S. for real estate agents based on their time working in the industry.
First off, they found that the median annual income for all Realtors was $39,200.
But for those Realtors who have been in the business two years or less, the median annual income was paltry $8,500.
In fact, 59% of those Realtors made less than $10,000 per year, and only 8% made $25,000 to $34,999.
For those Realtors who got over the hump and have worked in the industry 3-5 years, the median income skyrockets to $34,600 – nearly four times the median for new Realtors! Only 20% of those 3-5 year agents make $10,000 or less, while 13% make $25,000 to $34,999, 13% make $50,000 to $74,999, and 8% (one in twelve) even make $100,000 to $149,000 every year!
Now, let’s look at Realtors who have carved out a 6-15 year career. Only 14% make $10,000 or less, 9% make $25,000 to $34,999, 15% make $50,000 to $74,999, and 24% make $75,000 to $149,000. A whole 7% make $150,000 to $199,000, and an astounding 6% make $250,000 or more! Wow!
Last, let’s check in with those Real Estate Lifers. Only 9% make $10,000 or less, 16% make $50,000 to $74,999, 26% make $75,000 to $149,999, 12% make $150,000 to $249,000, and a jaw-dropping 9% (or almost one in ten) make $250,000 or more every year!
It’s worth noting that there’s a huge difference in the annual median income for Realtors nationwide ($39,200), to the annual median income for Realtors in California ($84,893 per year).
This is one time that we won’t hear complaints about home prices in California, as median Realtor commissions are much higher in the Golden State!
Turning our lens to California, another national job survey I found broke down the average estimated hourly earnings for real estate agents in California based on seniority.
They broke their data down into five brackets, which we’ll take liberties and assign to those same demographics we used above.
Starting Real Estate Agent (no years experience)
$11.06 per hour
$23,008 per year
Junior Real Estate Agent (0-2 years experience)
$15.73 per hour
$32,727 per year
Experience Real Estate Agent (3-5 years experience)
$24.40 per hour
$50,745 per year
Senior Real Estate Agent (6-15 years experience)
$37.15 per hour
$77,280 per year
Top-producing Real Estate Agent (16 years plus)
$56.76 per hour
$118,057 per year
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As you can see, it pays – in a big way – to get through your first couple years working as a Realtor, since building a profitable career takes time.
Look for our next edition of this series where we examine more factors about Realtor salaries, income, and paydays!