Last week, we covered The Complete Guide to Buying a Home in Las Vegas, which got me thinking, how much do real estate agents make over here?
You’ve probably heard that the “standard” commission is 6%, split between the buyers and sellers agent. There aren’t posted rates, due to anti-trust laws, but the truth is that they are negotiable. The LATimes reports that the average commission was 5.38% in 2013. But let’s use 6% for simplicity sake because all agents aren’t created equal.
The median sale price of a home is about $200,000 in Las Vegas (2015), 6% of that is $12,000. $6000 for each agent.
But many agents have a commission split with their brokerage, with newer agents often paying 50%. So a real estate agent could potentially be looking at anywhere from $3000-$6000 on your average home sale.
This is before overhead, and there is a lot of travel as an agent… among other expenses.
And real estate agents are typically self-employed, so think about taking another 30% off that commission.
As far as the average number of “transaction sides” of a real estate agent, the numbers vary but the data points to about 8.
8 multiplied by the average commission can land you anywhere from $24,000-40,000, which does correlate to Salary.com numbers.
It could even be lower in Las Vegas as the real estate market has been volatile over the last decade. It was booming with over 35,000+ licensed realtors in the state of Nevada in 2007. That number has steadily decreased to around 23,000 in 2013 according to the Nevada Real Estate Division. That is a lot of agents vying for a piece of the 38,578 combined sales of single-family homes, townhomes and condos in Las Vegas last year.
Now if you double that number, because each sale would equal two transaction sides (buyer/seller), we’re looking at 77,156.
I couldn’t get the 2016 numbers for total number or real estate agents in Nevada (State of Nevada’s website is broken!), but based on the historical report from VegasInc., 23,000 is a good estimation.
77,156 divided by 23,000 is roughly 3.35 transaction sides per real estate agent in 2015. That average annual salary would be ~$10,000-$20,000 based on those numbers.
But there are many other factors that come into play. Agents are self-employed for a reason. It’s a business. Some agents are just part-time. Some are 100% motivated. Some got their license, quickly figured out that the business wasn’t for them and quit.
Many say the Pareto’s Principle comes into play here, where 20% of agents do 80% of the deals. Heck, Time reported that this Las Vegas real estate agent sold 931 Las Vegas homes in 2010, ranking him #4 nationally in that year.
Shoot, the real winner here is Nevada’s Real Estate Division. 23,000 agents, with agents coming and going, will each spend about $1000+ to get licensed. Ka-ching!