Market Conditions in 44221>Question Details

Chris, Real Estate Pro in Cuyahoga Falls, OH

I'm thinking of becoming a realtor. In this housing market, what type of first year income is realistic?

Asked by Chris, Cuyahoga Falls, OH Sun Apr 6, 2008

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No one can give you a definitive answer on that. Not even anyone in your market. Typically, the first year in real estate you exhaust all your family and friends that want to purchase or sell real estate. IF you have a huge sphere of influence then you might get off to a great start. What is the average sales price of a home in your area? That will influence your income.

What real estate company will you associate yourself with? One company gives you all "your" commission but you pay through the nose monthly for their fees. If you don't sell anything you still owe them monthly. Some companies pay you "your" commission in gradual steps, 50% of the commission until you sell XXX amount and then you get 55% of "your" commission until you sell XXX amount and you get 60% of"your" commission until you cap. My company gives all agents (New and Old) 70% of "your" commission until you cap at XXX amount and then you get all of Your commission. As with all companies on your annual date you go back down to the beginning commission level.

Then how well are you going to market yourself. Nothing worse than a Secret Agent Realtor. You have to be able to afford a marketing campaign to get your name out there to the public. Then you have to afford to be able to send out mailings in bulk asking for business. How many Realtors are there in your local association? What will make you stand apart from all of them so that a seller will list or a buyer will buy with you as their Realtor? Check to see what the fee for membership to the local real estate association or the MLS carrier will be.

If you need a paycheck your first six months then you should talk to other Realtors that may need to hire a buyer's agent or a listing agent and go to work under that Realtor. My advice would be that in this market if you do not have any prior life experience such as you have lived and worked in Cuyahoga Falls longer than 25 years OR if you have work experience in a field such as marketing, business, self employed, banking, legal, PR, etc., then I would work under someone else to get the real estate training and experience without having to pay all the dues alone. The real estate training you get to take the exam to become a Realtor in our area is not the training that you need to actually be a Realtor. Be prepared also, Realtors are always taking classes and learning so don't be mislead that you only have to "pass" the exam to become a Realtor. Those days are long gone.

On a positive note, it is a great industry to be in. When you get that first time homebuyer in their house and see the excitement they have.... or when you sell a property that someone desperately needs to sell to move to another town because of a job transfer or because they are older and need assistance in living.... or when you sell a small home for a couple who then buys a bigger home because the baby needs more room.... it is a worthy place to be.
4 votes Thank Flag Link Sun Apr 6, 2008
Since this is a 2008 question, let's see how Realtors did according to the 2009 NAR Member Profile..
- Younger agents are being washed out: less than 20% have 3 or fewer years of experience, compared to more than 25% last year. Median gross income of Realtors with 2 years or less experience was $8,600.

# 75% of Realtors don’t have a second job whereas 25% state real estate is not their only occupation.
# Under 50% of Realtors surveyed noted real estate is their primary source of household income.

73% of Realtors reported being “very certain” they’ll remain int he business for at least two more years (therefore, 27% reported uncertainty of being in business for that long)

Median gross income for Realtors fell 14%.
Annual Income of Realtors in 2008 (Gross Income Before Taxes):

* - Less than $10,000: 22% of Realtors
* - $10,000 to $24,99: 17%
* - $25,000 to $34,999: 10%
* - $35,000 to $49,999: 13%
* - $50,000 to $74,999: 13%
* - $75,000 to $99,999: 9%
* - $100,000 to $149,999: 8%
* - $150,000 to $199,999: 3%
* - $200,000 to $249,999: 2%
* - $250,000 or more: 3%

Higher earning Realtors more frequently have a website, hold at least one designation, have been at their firm longer, and frequently have a bachelor’s degree or higher.

# Realtor Transaction Sides, 2008:

# - 12% of Realtors had 0 transactions
# - 31% of Realtors had 1-5 transactions
# - 21% of Realtors had 6-10 transactions
# - 13% of Realtors had 11-15 transactions
# - 7% of Realtors had 16-20 transactions
# - 13% of Realtors had 21-50 transactions
# - 3% of Realtors had 51 transactions or more

# Amount Realtors Spent To Maintain Their Website, 2008:

# - 22% of Realtors spent no money to maintain their website
# - 18% spent less than $100
# - 30% spent between $100 to $499
# - 18% spent between $500 to $999
# - 13% spent $1,000 or more
The most common info on the websites (according to NAR) is the member’s own listings.
# -Realtors who spent no money on their website had a median of 0 inquiries.
# -Realtors who spent less than $100 had a median of 3 inquiries.
# -Realtors who spent between $100-$499 had a median of 4 inquiries.
# -Realtors who spent between $500-$999 had a median of 6 inquiries.
# -Realtors who spent $1,000 or more had a median of 14 inquiries.……
1 vote Thank Flag Link Thu Oct 1, 2009
one thing is for sure.......not many realtors in your area want to work, so you wouldn't have alot of competition. i would give you my business.
1 vote Thank Flag Link Sat Jul 12, 2008

I am not sure if you are reading the right post.

Several people including myself offered the most realistic suggestions. A measure of what you make is how much you get to keep.

That first year has a lot of one time expenses that will eat into your income. I like to think that my advice is like my Real Estate philosophy.....Underpromise and Overdeliver!

If he makes a profit in year one, Kudos to him. He should also know that the failure rate for Realtors in the first 3 years is somewhere around 70%. I would have to investigate further for the actual number, but it is high!!!! He should know that too.
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1 vote Thank Flag Link Tue Apr 8, 2008
It's interesting "Just looking," that no one seemed to answer your question- what type of first year "income" can you expect. The answer is, you need to talk to agents and brokers in your local market and ask them that specific question. Every market and every company payment structure is different. I would tell an agent begining in my market (small town, half way between Portland Oregon and Seattle Washington) that you should be able to make at least $15,000-$20,000 your first year, if you work hard, full time.
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1 vote Thank Flag Link Tue Apr 8, 2008
Just to put things in perspective, while selling over 1$ million ( from an example of previous comment) sounds really great, your broker only gets 3% commission of that, and you get 50-100% of that. So, if you were to sell 1 million worth of properties, you get 15-30k before factoring in all your expenses and taxes.

Also, most brokers (and agents) will tell you that it usually takes 3-6months to get your first sale (in some cases even longer) Add to that that once you have a deal signed, you won't actually see any money untill closing, which could easily be 1-1.5months after signed Purchase & sale agreement. Through in the fact you'll have to pay whatever membership dues (realtor fees) mls fees etc up front, before you make any money.

So, theotericaly you could make just about any figure, realistically (and on average) your first year income would be very low. I'd say if after all your realestate related spending you ended up with 30k it would be a great success.
1 vote Thank Flag Link Mon Apr 7, 2008

That is your income for year one.

One you pay for all of your "equipment", marketing, education, fees, etc,etc., EXPERIENCE is your paycheck!

I sold 20 houses my first year, and didn't earn much once you figured in all the costs. Like any business, Real Estate is a long term investment. The failure rate is huge for new Realtors, and you need to be prepared for year one to be financially tough. You may even lose money.
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1 vote Thank Flag Link Sun Apr 6, 2008
It's not unrealistic to expect, as Gustavo said, zero income in the first year. Even in good years, they tell you to anticipate not making a dime in the first year, in fact you may have negative cashflow, because there are a lot of expenses involved in being a Realtor.

If you exceed the expectation and should make some money, that's great. But most new businesses fail (and understand that this IS a business) due to underfunding. They didn't bring enough money to the table to survive the little or no income in the first year, as you grow the business.
1 vote Thank Flag Link Sun Apr 6, 2008
Alan May, Real Estate Pro in Evanston, IL
First, I love being a real estate agent, but now is a very difficult time. I know quite a few agents that have put their license in escrow and had to find jobs. Some are doing really well, however, but they are working extremely hard right now. I have some good listings and have had some good sales lately, but I am working over 60 hours a week. If you have some money saved and some income coming in from a spouse or other source, then go for it; If you think that is what you want to do. But I would talk to some local agents and really look into it first. I would talk to you about it anytime. Good Luck!
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1 vote Thank Flag Link Sun Apr 6, 2008
If you live in Tampa...$20K
0 votes Thank Flag Link Mon Jun 11, 2012
Wow, that's a complicated question. I see lots of great advice below, but there is a big missing element - your commitment to doing what it takes to go above and beyond. I'm a blogger on another networking site and am known for what I'm about to say, averages don't mean squat. You have to look at things on the micro level.

I would advise you to interview 3 brokerages and ask them to tell you how their newbies do. Also keep in mind that it completely depends on your ability to market yourself. If you are normally successful, you will do well. If you are a slacker, are the average, you will not do well. It's a tough gig since real estate agents are considered an undifferentiated cimmodity so again, you have to be the best of the best to break through. The first 3 years will be tough then it gets easier. But it is fun and very rewarding.

Good luck!
Cathy Bureau
0 votes Thank Flag Link Sun Dec 25, 2011
Greetings, my name is Nathan Clift and I am an agent with New Homes America in the central valley of California, my website is I would like to offer my perspective on this topic.That is the first question that new agents ask. Whats in it for me, or what can I expect my income level to be? Well, it depends what are your worth? Sounds weird but it's true. Money will match your mindset. We have an untraditional approcah to real estate so that it CAN set the agent up to cash flow between $50,000-$100,000 first year? Sounds like an incredible amount of money and it is. I would be happy to personally show/work with ANY motivated individual looking to work in the cental Valley (Bakersfield to Fresno) why we are different, why you will and should make money in this business, but at the same time help clients get what they want!!! Now is the best time to become a realtor, Best Wishes!!
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0 votes Thank Flag Link Sun Jun 26, 2011
I hate to answer a question with a question but few realtors ask this in the begining of their carreer: Do I have enough resourses to get through the tough times? It takes awhile to build a business in today's market. It is not unreasonable to make nothing your first year. This is a business built upon referals and it takes time to build up a list of clientel. I began my real estate carrer in January, 2008. The worst time to become a realtor. There were 66 agents in my office. Now there are 20 and the more that drop out, the more succesfull I become because there are fewer people to slice the pie with. When the market picks up again. There will be fewer agents controling the majority of the transactions. Those remaining will have higher skills because anyone can sell a house in a good market, but those who make through the tough times will be the mega-agents of tommrrow.
0 votes Thank Flag Link Mon Jul 19, 2010
Well Chris, it's been about 2 years since your post, and looking at your profile, it looks like you became an agent! Congrats, but it begs the question...So how did you do in your first year?
0 votes Thank Flag Link Tue Mar 23, 2010
This is a timeless question, and one without a good answer for the new or prospective agent.

The business of real estate is based on your ability to make in-person contact with qualified buyers and prospective sellers. Putting aside the service aspect - if you can't make the contracts, you won't have any business.

If you're good at prospecting, you can make some gppd money. If you're lousy at prospecting, you can make lousy money!
0 votes Thank Flag Link Fri Nov 27, 2009
still waiting on your reply chris
0 votes Thank Flag Link Wed Jul 16, 2008
To truly answer this question, we really should be focusing on Gross vs. Net.

Let me first say, because income for a Realtor is based on actual production or sales, then income is going to swing widely from one agent to another. So, to say what is "typical" isn't really a good question because it assumes some type of standard exist, which it doesn't.

Per the US Department of Labor Bureau of Labor Statistics (see web reference)

"The lowest 10 percent earned less than $20,170”

I am sure, any Realtor who has been able to last in this business longer than 3 months would agree that the lowest 10 percent is most likely a representation with the most new agents.

Keep in mind, that $20,170 is Gross NOT NET! Just out of curiosity, I went back to look at my income tax statement for my first year back in 2003 and I net’ed $14,000.00 while I grossed about $21,000.00. Slight above average so, once you take out your taxes, expenses, fee’s, advertising, office supplies and whatever else you can imagine, chances are (statistically) you aren’t going to gross more than $20,170.00 and net much less.
0 votes Thank Flag Link Mon Jul 14, 2008
My answer is based on what new agents do that work for my company, in my market. Like I said, "talk to agents and brokers in your local market and ask them that specific question."
0 votes Thank Flag Link Mon Jul 14, 2008
Christina is a recruiter...
0 votes Thank Flag Link Tue Apr 8, 2008
Hi Chris!

I was hesitant to start in real estate also. I became a Realtor in November 2006, and had over $1 million in sales my first year in the Dayton, Ohio area. It all comes down to how much time you invest and which agency you choose. I chose an agency that invests in the Realtors, and offers the best commission splits. Another reason I chose my agency is because they actually give me leads - buyers and sellers that are referrals from other Realtors, corporations relocating their employees, or people that request information from our agency website online. I'm proud to work for the #1 agency in Ohio and I'd love to email you more information. Please contact me today, and I hope you decide to become a Realtor - it's a blast!

Christina Asad Edwards, REALTOR
2006 & 2007 Sales Masters Top Agent
mobile or text 937-205-4741
office 937-573-0082
fax 937-433-3561
Real Living Realty - #1 in OHIO!
Realty, Mortgage, Title, Relocation
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0 votes Thank Flag Link Mon Apr 7, 2008
Realisticaly? Zero. Times are very difficult now, specially for a new agent. Unless you are willing to do it full time and have an unfair market advantage such as a huge network of clients, you would find yourself spining your wheels. There are several other variables included such as marketing expertise, technology, salesmaship and business expertise that will come in play to detrmine your success in this industry.
But, If you still want to pursuit a Real estate career, make sure that you have at least one year of savings to support yourself. If you do, then have fun learning as much as you can from the business, network a lot and you may be prepared and ready to maximize profits from the Seller's cycle in er... Around two years?
0 votes Thank Flag Link Sun Apr 6, 2008
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