With all due respect, I disagree with John Souerbry (and I'm not trying to recruit you):
Q: What can a beginner agent expect to make first year on average assuming they are average at the job, not great not horrible just average.
A: Since you are asking about average, Iâ€™ll give you numbers based on 50% of the â€œactiveâ€ agents in Alameda County (TrendGraphix):
â€¢ Total Realtors shown as active: 8,271
â€¢ Maximum number of transactions a year for the bottom 50%: 2
â€¢ Average sale price (all types of properties) in Alameda County was $497,000 (8/2012). The average buyer side commission is 2.5%. If your split with your broker is 60%, your paycheck will be $7,455. If itâ€™s 70%, you will get $8,697.50. Multiply by 2 â€¦ your yearly income is $17,395. And thatâ€™s BEFORE you pay for your license, MLS fees, E&O insurance, desk fees, franchise fees, training, auto expenses, phone, internet, etc.
Letâ€™s assume youâ€™re NOT average and in the top 85% â€“ you will have done a maximum of 6 transactions:
â€¢ At 6 transactions, your typical income IF at a 70% split would be approximately $52,185.
â€¢ You could reasonably expect to pay fees of $7,000 for the privilege of being a Realtor. This does not include the advertising, websites, auto expenses, computer, phone, etc. and any other fees associated with related services you subscribe to. Now your income is down to $45,000 â€¦ or less.
â€¢ Most beginning realtors function on the lower end of the market, therefore the average price of $497,000 could easily be much lower. If your average sales price were to be $350,000, your subsequent net income would now be down to about $29,850.
Letâ€™s imagine youâ€™re in the top 94% - out of 8,271 Alameda County agents, only 473 sold more than 12 homes in the past 12 months â€“ 1 a month. 94% sell 12 or less a year. At that rate, your split could go to 80-90%, and your income would obviously be higher. You might, as an exceptional top-rated agent, make approximately $120,000 â€¦ BEFORE expenses. Just an aside here â€“ it takes LOTS of money in advertising, transaction costs and so on to make this level of income. A BIG chunk goes back into the business. The adage, â€œIt takes money to make moneyâ€ was never truer than in real estate.
More data for the past 12 months in Alameda County â€“ out of 8,271 agents:
â€¢ Agents who sold 24 homes or more â€“ 144 (1.74%)
â€¢ Agents who sold 30 homes or more â€“ 94 (1.14%)
â€¢ Agents who sold 36 homes or home â€“ 59 (0.71%)
â€¢ Agents who sold 42 homes or more â€“ 37 (0.45%)
â€¢ Agents who sold 48 homes or more â€“ 25 (0.3%)
â€¢ Average sales price for the top 10% - $368,647