1. Nature of the Work
One of the most complex and significant financial events in peoples' lives is the purchase or sale of a home or investment property. Because of this complexity and significance, people typically seek the help of real estate brokers and sales agents when buying or selling real estate.
Real estate brokers and sales agents have a thorough knowledge of the real estate market in their communities. They know which neighborhoods will best fit clients' needs and budgets. They are familiar with local zoning and tax laws and know where to obtain financing. Agents and brokers also act as intermediaries in price negotiations between buyers and sellers.
Real estate agents usually are independent sales workers who provide their services to a licensed real estate broker on a contract basis. In return, the broker pays the agent a portion of the commission earned from the agent's sale of the property. Brokers are independent businesspeople who sell real estate owned by others; they also may rent or manage properties for a fee. When selling real estate, brokers arrange for title searches and for meetings between buyers and sellers during which the details of the transactions are agreed upon and the new owners take possession of the property. A broker may help to arrange favorable financing from a lender for the prospective buyer; often, this makes the difference between success and failure in closing a sale. In some cases, brokers and agents assume primary responsibility for closing sales; in others, lawyers or lenders do. Brokers supervise agents who may have many of the same job duties. Brokers also supervise their own offices, advertise properties, and handle other business matters. Some combine other types of work, such as selling insurance or practicing law, with their real estate business.
2. Training, Other Qualifications, and Advancement
Real estate brokers and sales agents must be licensed. Prospective agents must be high school graduates, be at least 18 years old, and pass a written test. State licenses typically must be renewed every 1 or 2 years; usually, no examination needs to be taken.
Those interested in jobs as real estate agents often begin in their own communities. Their knowledge of local neighborhoods is a clear advantage. Under the direction of an experienced agent, beginners learn the practical aspects of the job, including the use of computers to locate or list available properties and identify sources of financing. Many firms offer formal training programs for both beginners and experienced agents.
Advancement opportunities for agents may take the form of higher rates of commission. Persons who have received their broker's license may open their own offices. Others with experience and training in estimating property value may become real estate appraisers, and people familiar with operating and maintaining rental properties may become property managers. Experienced agents and brokers with a thorough knowledge of business conditions and property values in their localities may enter mortgage financing or real estate investment counseling.
3. Employment
In 2006, real estate brokers and sales agents held about 564,000 jobs; real estate sales agents held approximately 77 percent of these jobs. Many worked part time, combining their real estate activities with other careers. About 6 out of 10 real estate agents and brokers were self-employed. Real estate is sold in all areas, but employment is concentrated in large urban areas and in rapidly growing communities.
Most real estate firms are relatively small; indeed, some are one-person businesses. By contrast, some large real estate firms have several hundred agents operating out of numerous branch offices. Many brokers have franchise agreements with national or regional real estate organizations. Under this type of arrangement, the broker pays a fee in exchange for the privilege of using the more widely known name of the parent organization. Although franchised brokers often receive help in training sales staff and running their offices, they bear the ultimate responsibility for the success or failure of their firms.
4. Job Outlook
Employment of real estate brokers and sales agents is expected to grow fast, because of the increasing housing needs of a growing population, as well as the perception that real estate is a good investment. Relatively low interest rates should continue to stimulate sales of real estate, resulting in the need for more agents and brokers.
This occupation is relatively easy to enter and is attractive because of its flexible working conditions; the high interest in, and familiarity with, local real estate markets that entrants often have; and the potential for high earnings. Therefore, although gaining a job as a real estate agent or broker may be relatively easy, beginning agents and brokers may face competition from their well-established, more experienced counterparts in obtaining listings and in closing an adequate number of sales. Well-trained, ambitious people who enjoy selling—particularly those with extensive social and business connections in their communities—should have the best chance for success.
Employment of real estate brokers and sales agents often is sensitive to swings in the economy, especially interest rates. During periods of declining economic activity and increasing interest rates, the volume of sales and the resulting demand for sales workers falls. As a result, the earnings of agents and brokers decline, and many work fewer hours or leave the occupation altogether.
5. Earnings
The median annual earnings of salaried real estate sales agents, including commissions, were $39,760 in May 2006, and the highest 10 percent earned more than $111,500. Median annual earnings of salaried real estate brokers, including commission, were $60,790 in May 2006.