As a person contemplates a new career, they first consider whether the career is in an industry they enjoy. Another top-of-mind question people consider when contemplating a career pivot: “What is the average salary?”
When it comes to salaries, real estate is a unique industry, as real estate agents typically work solely on negotiable commissions. Most people who go into real estate are excited with the prospect of unlimited income potential, especially if they have worked hard in previous jobs without receiving financial rewards. But with so much possibility, it can be hard to predict what an average salary is for someone getting started in real estate. Let’s look at those stats for California.
Key Takeaways: Entry-Level Real Estate Agent Salary
- The average starting salary for real estate agents in California is $66,334.
- A real estate agent’s income depends on various factors, including location, expertise, commission split, and market conditions.
- The entry-level real estate agent salary can be maximized by following best practices.
Overall Expectations for Real Estate Starting Salaries
Starting salaries in real estate can vary widely depending on several factors, including whether you are working in real estate full-time or part-time, your location, the type of real estate work (residential, commercial, etc.), the company or brokerage you work for, and your specific role. (After all, not all people in real estate work as commissioned salespersons. You may also work as an appraiser, a property manager, or work for a real estate developer.)
Average Starting Salaries for Real Estate Agents in California
The average starting salary for real estate agents in California is $66,334, according to the 2022-2023 California Real Estate Income Report. Find out more interesting statistics, such as the average education level achieved by real estate agents and how income changes with years of experience, by downloading this free report.
Factors Influencing Real Estate Agent Salaries
The salary we mentioned in the last section is the average of what first-year real estate agents make. Here are some factors influencing the average starting salary of someone working in the industry.
1. Location
The commission earned by a real estate agent typically depends on the property’s sale price, so it makes sense that salespeople working in Beverly Hills make more than those working in areas with a lower cost of living.
However, location isn’t the only factor determining a first-year agent’s income. People who sell lots of residential properties or focus on the commercial niche can do well, regardless of location.
2. Experience and expertise
As you review the income report, you’ll notice that, as in most industries, the longer you work in real estate, the more money you make.
Experienced real estate agents typically have a more extensive network and client base, which means they don’t have to work as hard finding leads. Also, some real estate agents in California upgrade their licenses to become brokers. Brokers make money the same way as real estate agents, but they can also oversee other agents’ work as an additional revenue stream.
3. Brokerage and commission structures
Another factor that plays a role in how much you’ll make the first year as a real estate agent is the agreement you sign with your brokerage. You will agree to a specific commission split when you sign on to work with a brokerage. Beginning real estate agents may give their brokerage a larger share of their commission in return for training and helpful resources.
4. Market conditions
Finally, market conditions also play a role in an entry-level real estate agent salary. However, regardless of interest rates, inventory, and home prices – there are still people who need to buy or sell a home.
FAQ: How much do real estate agents make per sale?
There’s no set commission rate for real estate agents. It’s always been negotiable. But historically, buyers and sellers agents have earned between two and three percent of the property’s sale price, which they share with their brokerage.
Strategies for Maximizing Earning Potential Your First Year
If you are starting your real estate license courses or have already passed your licensing exam, do yourself a favor and sign up to receive Allied School’s Real Estate Career Starter Kit. Our kit is full of actionable strategies to maximize your earning potential as you exit the gate.
Here are a few of the topics our starter kit covers:
- Build a strong online presence. Building a professional online presence is easier said than done, but leveraging your existing contacts is a great way to get started in the industry.
- Network effectively. Networking not only helps you connect with potential clients, but it’s also essential to establish connections with other agents and industry professionals, leading to referrals and business opportunities.
- Target niche markets. While there’s undoubtedly high income potential in residential real estate, you may decide to focus on luxury, investment, or commercial properties.
- Focus on education and training. Allied Schools offers the classes you need to get licensed, renew your license, and upgrade your license. But we also offer courses that help you grow your business. Allied Schools offers livestream and at-your-own-pace online courses. We have helped hundreds of thousands of agents from San Diego to San Francisco and beyond.
Contact a career advisor today to learn more about how Allied Schools can help you get your real estate license and earn more than the average starting salary for a real estate agent.
