Probably the second thing that people say when meeting me and discovering that I’m a real estate broker is that they want to become a Realtor® or real estate agent. The first is a list of all the people they know who sell real estate and if I know them. A Realtor® is just a real estate agent that is a member of the National Association of Realtors® but the name has become synonymous with the job of selling real estate.
Call it the Million Dollar Listing effect or that news that the housing market is doing better but NAR reports that it’s membership grew 28% last year to 1.22 million members. In 2015, the membership increased 17% over the prior year. That’s a lot of new real estate agents in the last 2 years alone.
So with so many new agents being added across the country and in Charlotte, we’re getting a good sense of what it’s like to be a new Realtor® and it sucks. Sorry if that’s offensive but there’s no better way to say it.
Last month, the Charlotte Regional Realtor® Association published its annual member survey and what stood out to me was the income of newer agents. According to the survey, “Realtors® with 2 years of less experience had a median gross income (annually) of $8,930”. That was an increase from $8,500 in 2015.
Charlotte agents with 2 years of less earned a median income of $10,000. That’s it: $10,000. Not a typo. Add to that 81% reported to the survey that selling real estate was their only occupation. So for new agents, they’re surviving on $833 per month before taxes and expenses.
Yes, before taxes and expenses because in real estate, real estate agents are independent contractors and responsible for the majority of their own expenses. Marketing, licensing, education, signage, fuel, everything. Last year, the survey reported that members spent an average of $7,860 in business expenses. That would leave the new agent with a whopping $2,140 in income for the year or $178 per month.
Granted, there are exceptions to this rule and real estate is a business that will give you back what up put in – sometimes in unequal amounts.