How to Advance (Advancement)
As agents gain knowledge and expertise, they become more efficient in closing a greater number of transactions and increase their income. In many large firms, experienced agents can advance to sales manager or general manager. People who earn their broker's license may open their own offices. Others with experience and training in estimating property values may become real estate appraisers, and people familiar with operating and maintaining rental properties may become property managers. Experienced agents and brokers with a thorough knowledge of business conditions and property values in their localities may enter mortgage financing or real estate investment counseling.
In 2008, real estate brokers and sales agents held about 517,800 jobs; real estate sales agents held approximately 76 percent of these jobs.
Many real estate brokers and sales agents worked part time, combining their real estate activities with other careers. About 59 percent of 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.
Employment of real estate brokers and agents is expected to grow faster than average. Beginning agents and brokers, however, will face competition from their well-established, more experienced counterparts.
Employment of real estate brokers and sales agents is expected to grow 14 percent during the 2008-18 decade, faster than average for all occupations. A growing population, particularly young adults who will be forming households in greater numbers, will require the services of real estate agents and brokers to buy their homes. 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. However, job growth will be somewhat limited by the increasing use of the Internet, which is improving the productivity of agents and brokers, and transforming the way they do business. For example, prospective customers often can perform their own searches for properties that meet their criteria by accessing real estate information on the Internet.
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 most other workers, and many are expected to leave the occupation over the next decade.
Employment of real estate brokers and sales agents is sensitive to swings in the economy, such as a recession. During periods of declining economic activity or rising interest rates, the volume of sales and the resulting demand for sales workers fall. As a result, the income of agents and brokers declines, and many work fewer hours or leave the occupation altogether. Over the coming decade, the opportunity for part-time work is expected to decline. Although the occupation is relatively easy to enter, increasingly complex legal and technological requirements are raising startup costs associated with becoming an agent and making it more difficult for part-time workers to enter the occupation.
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. However, beginning agents and brokers often face competition from their well-established, more experienced counterparts in obtaining listings and in closing an adequate number of sales.
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.
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 also can affect income. Sales workers who are active in community organizations and in local real estate associations can broaden their contacts and increase their income. 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 income 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.
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