How Much Do Real Estate Agents Make in Texas?

Texas is well-known for things like BBQ, country music, hot weather, and…real estate. The housing market in the Lone Star State is heating up. The country is shaking off the throes of the global pandemic and the economy is on the road to recovery. Thus, there is a renewed interest in property investments.

With deals being closed left, right, and center, one must stop to wonder, how much do real estate agents make in Texas? Well, ponder no more. We’re going to answer all your questions on how much realtors make in the state. We’ll also give you some factors which affect this figure and how you can quickly become a licensed realtor in the State of Texas.

So How Much Does a Real Estate Agent Make In Texas?

Well, the answer to this may be more tricky than it seems. The annual income of a real estate agent depends on several key factors and a host of lesser ones. Things like education, years of experience, and which area they principally operate within are very important. Also, the brokerage agency they work for can cause significant disparities in their net income over time.

With this in mind, let’s not also forget that the economy is still recovering from the grip of the pandemic and recent statistics represent a unique situation. For this reason, we think it’s wise to give two answers, the pre-pandemic figure and the current estimate.

According to data from the U.S. Bureau of Labor Statistics, the annual mean wage of realtors in Texas was $72,830 as of May 2019, before the onset of the pandemic. Additionally, based on information from other reliable sources, the average salary for a realtor in Texas was $42,800 as of December 27, 2021, with a range between $41,812 and $54,441 per annum.

The current estimate represents a drop of over 41 percent in the average income of Texan realtors. This can be explained by the effect the pandemic and the measures taken to combat it had on the industry.

Statistics show a drop in new home listings by over 40%, a 25% increase in delistings, and a fall in queries for agents, online search activity, and offers made – which are all important measures of demand in the housing market.

Factors Affecting How Much A Real Estate Agent Makes

The pandemic was a major factor affecting the average salary of Realtors in the state. Yet, it is not the only one. Let’s take a closer look at some other important factors which may affect how much a realtor in Texas makes:

Location

The salary figure stated above varies widely depending on which part of Texas you operate in. Urban and suburban areas typically have more expensive homes. This translates to a higher commission and eventually a higher annual income.

For example, the average salary of a Realtor in cities like Austin and Dallas was 6 percent higher than the state average in 2019. On the other hand, the state average was as much as 21 percent higher than the average realtor’s salary in the city of Corpus Christi. This shows how significant location is to the salary of a Realtor.

Years of Experience

Usually, the longer one stays in a particular line of work, the more their income increases steadily with time. More time put into the profession equals more experience, better qualifications, and a stronger network. It also means a trusted reputation and the leverage to negotiate a better commission with your broker and your clients.

For example, a 2019-2020 study showed that the average income of a Realtor more than tripled after the first year. The same study also showed agents with 4-10 years of experience had an average income of $63,595. Also, those with over 10 years of experience earned over $100,000 a year.

Your Agency

Virtually all realtors work for an agency or broker. Typically for every deal, you close – whether a buy or a sale – you receive a commission. This commission is then split between you and your broker based on an already agreed ratio.

A common commission split is 70 percent to the agent and 30 percent to the broker. Even though most agents are paid solely on a commission basis, some brokers offer base salaries as well. This may also add an extra boost to their salary.

Your Qualifications

The title “real estate agent” is more of an umbrella term for the many services provided by Realtors and brokers. These services may extend far beyond simply advertising properties and finding the best deals for clients.

Property management, commercial property investment, and land consultancy are just a few of the many areas Realtors can specialize in. These qualifications build your reputation, increase your expertise and allow you to provide better services to your clientele. They also allow you to charge more for your services than realtors with lesser qualifications.

The Economy

This point has been illustrated clearly with the effect of the global pandemic on the income of realtors in Texas. The housing market is closely tied to the economy at a local, state, and national scale. During times when home sales have been at their lowest – such as the 2008 housing market crash – the average salaries of realtors fell nationwide.

So when the economy struggles or the housing market stagnates, it is natural that realtors should notice a dip in their income. This also means that realtors operating in cities with a thriving economy are more likely to earn a higher annual income.

Area of Specialization

Realtors may specialize in residential properties, commercial properties, or other specialized areas. While each niche has its peculiarities, one significant aspect they differ in is average property prices.

Commercial properties are on average more valuable than residential properties. This means that Realtors who specialize in commercial properties on average make more than those who specialize in residential properties.

Hours Put In

Like most jobs, the more hours you invest, the more you expect to make at the end of the month. Agents who put in more time on average have larger returns and there are studies to back this.

Research showed that agents who put in an average of 40 to 50 hours of work a week can expect to make around $68,000 a year. But agents who spent between 51 to 59 hours a week working could expect to earn around $85,000 per annum. So those late nights do pay.

Government Policies

Government policies on a local, state, and national level also have a significant impact on the housing market. Bank interest rates and loan qualifying criteria largely determine the ease at which buyers can access the loans they need to purchase a property.

Therefore, policies that encourage property buying such as low interest rates and Government Sponsored Enterprises – like Fannie Mae and Freddie Mac – stimulate the housing market. Policies like restricting access to private mortgage insurance and increased interest rates restrict the housing market.

How To Get Your Texas Real Estate License

Getting your real estate license in Texas is a straightforward process. But first of all, there are several criteria you must qualify for and a few steps to follow. These include:

You must be 18 years of age and must have a GED or a high school diploma
You must be deemed honest, trustworthy, and possessing integrity by the Texas Real Estate Commission (TREC). This is done through a background check and Fitness Determination test
Have completed 180 hours of TREC-approved college-level real estate pre-licensing courses
You must pass the course final exam in preparation for the main licensing exam
Obtained sponsorship from a licensed Texas broker and completed an online sponsorship request
Apply for your license online at the TREC online licensing service. This involves submitting the required fees and forms to TREC, including real estate school certificates
Submitted to fingerprinting and schedule for your license examination
Passed the state exam with at least a score of 70 percent

The entire process from starting your pre-licensing courses to receiving your license may take between 4-6 months, depending on your schedule and several other factors. See this post on how to become a real estate agent in Texas to learn more.

In Conclusion

The real estate market in Texas is a lucrative industry. It’s also not the easiest industry to break into, especially for novices. It will need time, dedication, and a lot of hard work. However, with the drive and determination to constantly improve yourself and your network, you’ll be making a decent income in no time. So what are you waiting for? Click here to learn more about the requirements needed to become a real estate agent in Texas and start your journey into the housing industry.

References:

https://www.realestateexpress.com/career-hub/blog/real-estate-tips/income-report-double-real-estate-income/