Real estate brokers and sales agents often work evenings and weekends and
usually are on call to suit the needs of clients.
A license is required in
every State and the District of Columbia.
Although gaining a job may be relatively
easy, beginning workers may face competition from well-established, more experienced
agents and brokers in obtaining listings and in closing an adequate number of
Employment 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 fall.
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
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.
Besides making sales, agents and brokers
must have properties to sell. Consequently, they spend a significant amount of
time obtaining listings—agreements by owners to place properties for sale with
the firm. When listing a property for sale, agents and brokers compare the listed
property with similar properties that recently sold, in order to determine a competitive
market price for the property. Once the property is sold, both the agent who sold
it and the agent who obtained the listing receive a portion of the commission.
Thus, agents who sell a property that they themselves have listed can increase
Most real estate brokers and sales agents sell residential
property. A small number—usually employed in large or specialized firms—sell commercial,
industrial, agricultural, or other types of real estate. Every specialty requires
knowledge of that particular type of property and clientele. Selling or leasing
business property requires an understanding of leasing practices, business trends,
and the location of the property. Agents who sell or lease industrial properties
must know about the region’s transportation, utilities, and labor supply. Whatever
the type of property, the agent or broker must know how to meet the client’s particular
Before showing residential properties to potential buyers,
agents meet with them to get a feeling for the type of home the buyers would like.
In this prequalifying phase, the agent determines how much the buyers can afford
to spend. In addition, the agent and the buyer usually sign a loyalty contract
which states that the agent will be the only one to show houses to buyers. An
agent or broker then generates lists of properties for sale, their location and
description, and available sources of financing. In some cases, agents and brokers
use computers to give buyers a virtual tour of properties in which they are interested.
With a computer, buyers can view interior and exterior images or floor plans without
leaving the real estate office.
Agents may meet several times with prospective
buyers to discuss and visit available properties. Agents identify and emphasize
the most pertinent selling points. To a young family looking for a house, they
may emphasize the convenient floor plan, the area’s low crime rate, and the proximity
to schools and shopping centers. To a potential investor, they may point out the
tax advantages of owning a rental property and the ease of finding a renter. If
bargaining over price becomes necessary, agents must follow their client’s instructions
carefully and may have to present counteroffers in order to get the best possible
Once both parties have signed the contract, the real estate broker
or agent must make sure that all special terms of the contract are met before
the closing date. For example, the agent must make sure that the mandated and
agreed-upon inspections, including that of the home and termite and radon inspections,
take place. Also, if the seller agrees to any repairs, the broker or agent must
see that they are made. Increasingly, brokers and agents are handling environmental
problems as well, by making sure that the properties they sell meet environmental
regulations. For example, they may be responsible for dealing with lead paint
on the walls. While loan officers, attorneys, or other persons handle many details,
the agent must ensure that they are carried out.
Advances in telecommunications and the ability to retrieve data about properties
over the Internet allow many real estate brokers and sales agents to work out
of their homes instead of real estate offices. Even with this convenience, much
of the time of these workers is spent away from their desks—showing properties
to customers, analyzing properties for sale, meeting with prospective clients,
or researching the state of the market.
Agents and brokers often work more
than a standard 40-hour week. They usually work evenings and weekends and are
always on call to suit the needs of clients. Although the hours are long and frequently
irregular, most agents and brokers have the freedom to determine their own schedule.
Consequently, they can arrange their work so that they can have time off when
they want it. Business usually is slower during the winter season.
Training, Other Qualifications, and Advancement
In every State and the District
of Columbia, 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. The examination—more comprehensive for brokers than for agents—includes
questions on basic real estate transactions and laws affecting the sale of property.
Most States require candidates for the general sales license to complete between
30 and 90 hours of classroom instruction. Those seeking a broker’s license need
between 60 and 90 hours of formal training and a specific amount of experience
selling real estate, usually 1 to 3 years. Some States waive the experience requirements
for the broker’s license for applicants who have a bachelor’s degree in real estate.
licenses typically must be renewed every 1 or 2 years; usually, no examination
needs to be taken. However, many States require continuing education for license
renewals. Prospective agents and brokers should contact the real estate licensing
commission of the State in which they wish to work in order to verify the exact
As real estate transactions have become more legally
complex, many firms have turned to college graduates to fill positions. A large
number of agents and brokers have some college training. College courses in real
estate, finance, business administration, statistics, economics, law, and English
are helpful. For those who intend to start their own company, business courses
such as marketing and accounting are as significant as courses in real estate
Personality traits are equally as important as one’s academic
background. Brokers look for applicants who possess a pleasant personality, are
honest, and present a neat appearance. Maturity, good judgment, trustworthiness,
and enthusiasm for the job are required in order to encourage prospective customers
in this highly competitive field. Agents should be well organized, be detail oriented,
and have a good memory for names, faces, and business particulars.
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
Many firms offer formal training programs for both beginners
and experienced agents. Larger firms usually offer more extensive programs than
smaller firms. More than a thousand universities, colleges, and junior colleges
offer courses in real estate. At some, a student can earn an associate’s or bachelor’s
degree with a major in real estate; several offer advanced degrees. Many local
real estate associations that are members of the National Association of Realtors
sponsor courses covering the fundamentals and legal aspects of the field. Advanced
courses in mortgage financing, property development and management, and other
subjects also are available.
Advancement opportunities for agents may take
the form of higher rates of commission. As agents gain knowledge and expertise,
they become more efficient in closing a greater number of transactions and increase
their earnings. In many large firms, experienced agents can advance to sales manager
or general manager. 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. (See the Handbook
statements on property, real estate, and community association managers; and appraisers
and assessors of real estate.) 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.
In 2004, real estate brokers and sales agents held about 460,000 jobs; real
estate sales agents held approximately 24 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
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.
estate brokers and sales agents are older, on average, than most other workers.
Historically, many homemakers and retired persons were attracted to real estate
sales by the flexible and part-time work schedules characteristic of the field.
These individuals could enter, leave, and later return to the occupation, depending
on the strength of the real estate market, their family responsibilities, or other
personal circumstances. Recently, however, the attractiveness of part-time real
estate work has declined, as increasingly complex legal and technological requirements
are raising startup costs associated with becoming an agent.
Employment of real estate brokers and sales agents is expected to grow about
as fast as average for all occupations through the year 2014, 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. In addition,
a large number of job openings will arise each year from the need to replace workers
who transfer to other occupations or leave the labor force. However, job growth
will be somewhat limited by the increasing use of technology, which is improving
the productivity of agents and brokers. For example, prospective customers often
can perform their own searches for properties that meet their criteria by accessing
real estate information on the Internet. The increasing use of technology is likely
to be more detrimental to part-time or temporary real estate agents than to full-time
agents, because part-time agents generally are not able to compete with full-time
agents who have invested in new technology. Changing legal requirements, such
as disclosure laws, also may dissuade some who are not serious about practicing
full time from continuing to work part time.
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
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
The median annual earnings of salaried real estate sales agents, including
commissions, were $35,670 in May 2004. The middle 50 percent earned between $23,500
and $58,110 a year. The lowest 10 percent earned less than $17,600, and the highest
10 percent earned more than $92,770. Median hourly earnings in the industries
employing the largest number of real estate sales agents in May 2004 were as follows:
of real estate agents and brokers
Activities related to real estate
Lessors of real estate
annual earnings of salaried real estate brokers, including commission, were $58,720
in May 2004. The middle 50 percent earned between $33,480 and $99,820 a year.
Median annual earning of real estate brokers were $61,550 in offices of real estate
agents and brokers and $44,920 in activities related to real estate.
on sales are the main source of earnings of real estate agents and brokers. The
rate of commission varies according to whatever the agent and broker agree on,
the type of property, and its value. The percentage paid on the sale of farm and
commercial properties or unimproved land is typically higher than the percentage
paid for selling a home.
Commissions may be divided among several agents
and brokers. When the property is sold, the broker or agent who obtained the listing
usually shares the commission with the broker or agent who made the sale and with
the firm that employs each of them. Although an agent’s share varies greatly from
one firm to another, often it is about half of the total amount received by the
firm. Agents who both list and sell a property maximize their commission.
usually increases as an agent gains experience, but individual motivation, economic
conditions, and the type and location of the property also affect earnings. Sales
workers who are active in community organizations and in local real estate associations
can broaden their contacts and increase their earnings. A beginner’s earnings
often are irregular, because a few weeks or even months may go by without a sale.
Although some brokers allow an agent to draw against future earnings from a special
account, the practice is not common with new employees. The beginner, therefore,
should have enough money to live for about 6 months or until commissions increase.
Selling expensive items such as homes requires maturity, tact, and a sense
of responsibility. Other sales workers who find these character traits important
in their work include insurance sales agents; retail salespersons; sales representatives,
wholesale and manufacturing; and securities, commodities, and financial services
sales agents. Although not involving sales, the work of property, real estate,
and community association managers, as well as appraisers and assessors of real
estate, requires an understanding of real estate.
See the Career Database for more information
on these careers.