What Does A Louisiana Real Estate Agent Earn In A Year?

The State of Louisiana is more popularly known for its wetlands than its housing market. That’s why a lot of people are surprised to find that the state also has quite a strong real estate industry. Despite the uncertainty surrounding the housing market in 2020 due to the pandemic, the sector pulled in surprisingly strong numbers.

Increased demand from homeowners set the stage for a surge in housing prices and home sales. Louisiana home sales are up 33.8% year-over-year, and the median home sale price has increased by 6.4%. Not only that, 17.4% of homes sold above listing price.

Of course, while all this spells great news for homeowners, it’s even better news for real estate agents. Since most real estate agents are paid commissions based on the value of the houses they sell, more sales and higher median home prices only add up to more commission income for them.

However, housing prices and sales volume are not the only things that affect how much a real estate agent makes within the state. Let’s take a look at how much a real estate agent makes in Louisiana, the factors affecting this figure, and how you can get your real estate license in the State of Louisiana. Keep on reading!

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

There are a lot of things that affect how much real estate agents make. Factors like years of experience, education, your niche, and which area they operate within are very important. Other significant details that you have to consider are brokerage fees and commissions. Usually, this is a fixed percentage between you and your brokerage.

According to data from the U.S. Bureau of Labor Statistics, the annual mean wage of realtors in Louisiana was $40,851-$53,190 with an average of $41,817 as of January 2022. However, this may vary widely even within the state, as we explained later in this article.

Factors Affecting How Much A Real Estate Agent Makes

Let’s take a closer look at some other important factors which may affect how much a realtor in Louisiana makes. They include:

Location

The average earnings of real estate agents can vary significantly within the same state for a myriad of reasons. The local economy of the city, the suburb you operate in, and the demand in the housing market within the area all affect the median prices of housing in the area. This can lead to large differences in the average salary of realtors over time. For example, houses built in or around the Louisiana wetlands usually cost less than their counterparts built on drier land.

To further support this point, the highest paying city within Louisiana for real estate agents, New Orleans, had an average salary of $82,043 per year. This was almost double that of the state average and 17% more than the 10th city on the list. This shows how important a Realtor’s location is when considering their annual income.

Your Broker

As you would expect, your broker plays a huge role in your income as a real estate agent. Your contract with your agency contains details such as the way commissions will be split, the bonuses you’re eligible to receive for hitting certain targets and in some rare cases may even involve a base salary structure as well.

This commission is shared between you and your broker based on an already agreed ratio which will be fully outlined in your contract. While this may differ based on several factors, a common commission split is 70 percent to the agent and 30 percent to the broker.

While some agents don’t see the necessity of working under a brokerage firm, for new real estate agents it provides you with the luxury of being offered prospective buyers and sellers all the marketing cost associated with getting leads. This gives you time to learn the ropes and further build your professional network, two factors that also contribute to your income.

Years of Experience

There’s a good reason the salaries of real estate agents vary significantly based on their years of experience. More time put into the profession is usually a good indicator of more experience, better professional qualifications, and a stronger network. It also means more time to build your reputation and achieve stronger leverage to negotiate better deals with brokerages and 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 Qualifications

A real estate agent is much more than just “someone who helps people buy and sell houses”. Good agents may also possess extra qualifications which help them add more value to the services they offer to their clients. These services may extend far beyond simply finding the best deals for clients and advertising properties.

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 quality service to your clientele. They also allow you to charge more for your services than Realtors with lesser qualifications.

The Economy

The housing market is affected significantly by the economy at a local, state, and national scale. The pandemic illustrated this point clearly with the effect it had on the housing market.

Statistics showed 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- during the height of the lockdown.

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 salary.

Area of Specialization

Realtors may specialize in residential properties, commercial properties, or other specialized areas of real estate. With each niche comes its respective skills and peculiarities. However, these may also affect how much real estate agents within the state make.

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. Of course, this does not mean that residential properties are not profitable.

Government Policies

Government policies on a local, state and national level have a significant impact on the housing market. Policies that encourage property buying such as low-interest rate mortgages and Government Sponsored Enterprises stimulate 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. Policies like restricting access to private mortgage insurance and increased interest rates restrict the housing market.

How To Get Your Louisiana Real Estate License

Getting your real estate license in Louisiana 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
Select your Louisiana State-Approved Real Estate School and sign up for classes
Complete 90 hours of pre-licensing education
Pass the course final exam
Fill out Salesperson License Application Part A
Schedule your exam
Pass the Louisiana Real Estate Exam
Pass your background check
Acquire Errors and Omissions (E&O) insurance
Complete the Initial Real Estate License Application – Part B
Find a broker

The entire process from starting your pre-licensing courses to receiving your license may take about 3 months, depending on your schedule and several other factors.

In Conclusion

The real estate market in Louisiana is a lucrative industry. All you need is 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 salary 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 Louisiana and start your journey into the housing industry.

References

How Much Do Real Estate Agents Make In Louisiana