How Much Do Real Estate Agents Make In Michigan?
The US economy has been on a rollercoaster in the last few years and many markets have felt the shock of these turbulent times. However, one sector has remained strong throughout this period and has consistently given positive returns to investors – the real estate market. Let’s narrow this trend down and look at the State of Michigan, our focus for this article.
The real estate market within the Great Lakes State is waxing strong, with a statewide year-over-year increase in housing prices by 9.8% in June and a 1.7% increase in house sales. This shows strong demand within the housing and property market as investors capitalize on the strength of the market to take in profits, which translates to a higher income for the real estate agents who broker these deals.
In this article, we’ll look at how much a real estate agent makes in Michigan, the factors affecting this figure, and how you can get your real estate license in the State of Michigan.
So How Much Does a Real Estate Agent Make In Michigan?
When it comes to annual income, property location and the demand for housing are just a few things that affect how much a real estate agent makes in a year. Other factors like experience, brokerage policies, qualifications, and even local politics can profoundly affect just how much a realtor makes per annum.
According to recent data, the annual mean wage for Michigan real estate agents was $44,135 in 2022. However, it’s important to remember that the average salary of a realtor in the State of Michigan can vary widely. In this article, we aim to give you a rough estimate and explain some of the factors affecting this figure.
Factors Affecting How Much A Real Estate Agent Makes
As we mentioned earlier, the salary of real estate agents value widely across the state, and many factors may affect this. Let’s take a closer look at some other important factors which may affect how much a realtor in the State of Michigan makes. They include:
Location
Even within a particular state, the value of a property can vary widely from county to county, city to city, and even between adjacent streets. There are many factors associated with the location of a property that affects its value. Some of these include access to public amenities, security, aesthetic appeal, regulations set by the local housing authorities, whether it’s in a residential or commercial location, and so on.
All these factors are quite important because real estate agents who operate primarily in regions where the properties have a high average value would make more money than a realtor who works in less valuable areas. For example, the average home price in Michigan is about $237,000, but this can vary widely throughout the state, from $150,900 in Alcona County to $1,230,800 in Lake Angelus, Oakland County.
Years of Experience
Like many other professions within various industries, years of experience usually correlate with a higher average salary, and there are several good reasons for that. Most people who have been working in a field for years have picked up vital skills and experience which make them more productive and indispensable than novices. Also, their time within the industry has allowed them to build up their reputation, increase their network of valuable contacts, and obtain the necessary qualifications to justify their higher salaries.
To further emphasize this point, a study carried out between 2019 and 2020 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
Another important factor to consider is the agency which you work for. Agencies affect your income and your career in several ways. These include your training process, reputation, skills, and exposure to high-value properties, deals, and clients. Most importantly, your agency determines your commission split.
A commission split is a predetermined agreement between parties that elucidates how revenue generated on a particular business deal is to be distributed between the agency and the real estate agent. It may also include rewards for hitting specific targets, loyalty bonuses, and in some cases, even offer a fixed salary structure as well.
Your Qualifications
To make it in the housing industry, you must possess skills and qualifications that put your services in high demand. This means constantly striving to expand your current skill set to include high-demand areas of expertise. Some key areas you may want to look at include 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. Most of these can be taken as post-licensing educational courses which are usually organized by the real estate commission body governing your state.
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 could expect to make around $68,000 a year. But agents who spent between 51 to 59 hours a week working could expect to earn approximately $85,000 per annum. So those late nights do pay.
Related: How To Become a Real Estate Agent In Michigan
The Economy
The relationship between the housing market, the economy, and the average income of realtors has not always been straightforward. The financial markets can influence the housing sector in numerous ways and the housing sector, in turn, is a significant part of the national economy.
Typically during times of economic downturn, the housing market contracts due to the restricted flow of money within the larger economy. This leads to a fall in house prices, new listings, property sales, and ultimately the income of real estate agents and other key players within the housing market. However, as we said this process is anything but straightforward and housing prices within the State of Michigan rose even though the country was going through a contraction due to the pandemic.
Area of Specialization
This is another factor that is somewhat related to location but on another scale. 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, each of these may 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 at the different levels of government also play a significant role in the market value of housing prices and the annual salary of real estate agents. Policies that encourage property buying, such as low-interest rate mortgages and Government Sponsored Enterprises, stimulate the housing market, while higher interest rates slow down the rate of house sales.
Policies controlling the rate at which new housing can be built and ultimately the supply of housing profoundly affect average housing prices as well. Bank interest rates and loan qualifying criteria largely determine the ease at which buyers can access the loans they need to purchase a property.
How To Get Your Michigan Real Estate License
Getting your real estate license in Michigan is a straightforward process. But first of all, there are several criteria you must qualify for and a few steps to follow. These include:
- Be at least 18 years of age
- Have a high school diploma or GED
- Complete 40 hours of approved Pre-Licensing Education
- Pass the course exam
- Complete the background check requirement
- Pass the Michigan Real Estate Examination
- Complete your Licensing Application
- Choose a sponsoring broker
The entire process from starting your pre-licensing courses to receiving your license may take several months, depending on your schedule and other factors.
Check here Michigan Real Estate School Prices.
In Conclusion
The real estate market in Michigan 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 Michigan and start your journey into the housing industry.