Real Estate Agent Salary: How Top Agents Earn $100,000+/Year

by Wayne

It’s been called the Pareto Principle, the 80-20 rule, the Principle of Factor Sparsity and the Law of the Vital Few. For real estate agents, it can be called “how top agents earn a real estate salary of $100,000 or more per year”.

Even though it’s new to many, the 80-20 rule is over 100 years old. Back in 1906, Italian economist Vilfredo Pareto discovered that 80% of the land in Italy was owned by 20% of the population. He began to notice an 80-20 pattern in nature and in economies. He even found that 20% of the pea pods in his garden contained 80% of the peas.

In 1941, business consultant Joseph Juran discovered Pareto’s work, and began to apply the 80-20 principle to business. Since World War Two, the 80-20 principle has been incorporated into the fabric of American business. Sales managers and management consultants swear it’s true, and offer decades worth of anecdotal evidence to support the principle.

What does this mean to you? It means that if you can learn how the top 20% of real estate agents got to be in the top 20%, and you can duplicate their efforts, then you, too, can be in the top 20% of agents. And, the top 20% consistently earn a salary in excess of $100,000 per year. Does this sound appealing to you? I figured it would. So let’s jump right in and discover ten skills that these “top agents” have in common.

1. They are well-networked. Top agents know the value of personal referrals, so they make it a point to connect with the “influencers” in their market. “Influencers” aren’t necessarily the “powerful and well-connected”; rather, they are simply trustworthy individuals who come into contact with a lot of other people. Barbers, hairdressers, nail technicians, school teachers, and ministers are all good people to network with. Top real estate agents almost always belong to civic organizations like Rotary or Lions Club, coach sports teams or are active in Scouts. Top agents instinctively know that they will receive referrals from people who know them, like them, and trust them, so they make it a point to be well-networked.

2. They work a specific niche. Buyers and sellers prefer to work with experts. So, top agents position themselves as experts in a particular segment of their market, like a particular neighborhood, housing type, or service sector such as first-time buyers, multi-cultural buyers or seniors. Some agents will even go so far as to brand themselves with their area of expertise with names like “Mr. Waterfront”, “Condo-man”, or “The Hunting & Fishing Expert”. Top agents put in extra hours learning the “ins & outs” of their niche so that they can truly represent themselves as experts and command the higher commissions that experts deserve.

3. They blog regularly. Most buyers begin their home search by browsing the internet, and on the internet “content is king”. Agents who earn a salary of $100,000+ per year are persistent bloggers. They write about their niche, their market, local schools, restaurants, sports, and other subjects in order to build a content-rich blog. No matter what subject potential buyers or sellers type into their search engine when house-hunting, top agents want one of their blog posts to be on page one of those search results. If you can’t write, does that limit your ability to become a top agent? No, it doesn’t. Blogging isn’t about having pro-level writing skills, it’s about giving buyers and sellers the information that they’re looking for. And, top agents who are too busy to write often turn to freelancer-websites like guru or elance to hire ghostwriters to write their blog posts.

4. They know the legalities and paperwork. Real estate law is complicated, no matter what State an agent operates in. Agents aren’t expected to be lawyers, but top agents have made it a point to understand what it takes to sell a property and the issues that can kill a sale. Also, they know how to write offers that are unambiguous and clear, and how to fill out a contract so that it will stand up in court if it is challenged.

5. They don’t work without a contract. Top agents know that time is money. Working with buyers without a Buyer’s Agency contract is risky business. Agents who make over $100,000 per year don’t commit to buyers who won’t commit to them. It’s also important to have a written agreement with one’s broker so that misunderstandings can be avoided.

6. They work with both buyers and sellers. Real estate sales are cyclical: markets rise and fall. Sometimes, the supply of homes exceeds the number of people looking to buy a home (a “buyer’s market”). Other times, the number of people wanting to purchase a home exceeds the number of homes for sale (“seller’s market”). Top agents understand this and don’t limit themselves to working exclusively with either buyers or sellers; they work with both. That way, they continue to make money regardless of what the real estate market is doing.

7. They know how to say “no”. Agents who earn a salary of over $100,000 per year understand that not everyone who wants to buy a home is qualified to do so, and that many sellers have unreasonable expectations regarding the price or “sale-ability” of their home. Top agents require that buyers have financing in place and are willing to work with them exclusively (sign a Buyer’s Agency contract). They also realize that homes which are over-priced don’t sell, and that home sellers have to be flexible in order to get their homes sold. Top agents say “no” to working with buyers and sellers who don’t meet their representation requirements.

8. They understand the Sales Cycle. To a Top Agent, the “sales cycle” starts when a buyer starts looking for a home, or a seller decides to sell. Included in the agent’s sales cycle is the length of time needed for the agent to identify and qualify prospects, locate a home or a seller, market a property, negotiate the terms of purchase, complete all inspections and mortgage paperwork, and close the deal (get paid). Sometimes, this process can take six to nine months. Sometimes, a year or more. Knowing how to properly qualify leads can shorten the cycle significantly, which is why top agents will always be good at our next skill: qualifying.

9. They know how to qualify. Let’s discuss this skill in terms of the 80-20 rule: Top agents realize that some prospects are just more trouble than they’re worth. So, they have a system that enables them to zero-in on the prospects that are most likely to result in a payday: buyers who have financial means and a purchase deadline, and sellers who are flexible in both price and terms. It’s the top 20% of prospects that result in 80% of a Top Agent’s income.

10. They are disciplined. Being self-employed as a real estate agent requires discipline. Top Agents are able to set income goals and make an activity plan that that will lead them to their goals. And, they have the discipline to stick to their plan: they set their alarm clock, get up on time, keep a daily “to-do” list and accomplish what needs to be done every day before they go home. In that fashion, they are able to stay on-track.

Becoming a “Top 20%” real estate agent and earning a salary of over $100,000 per year takes persistence and dedication to the task, but the first thing that’s required is that an agent know what must be done to achieve that level of performance. The above list recounts some of the skills that are shared by most of the country’s Top Agents. Pick your starting point from the above list, work through the list item-by-item, and in no-time you, too, can be making a salary of over $100,000 per year.

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