Where’s the Profit in Real Estate Recruiting?

by | Sep 6, 2024

According to a recent study on real estate agent income, most new agents grow their income substantially within a few short years of starting their businesses.

Those in their first year reported an average annual income of just over $7,400.

However, those who’ve been in business between three and five years saw their net income jump to $31,1300

Most full-service brokers know this period in an agent’s tenure is where the highest margins are realized from the recruiting process.

Once an agent is established, two things happen:

Income Growth Slows: It takes most agents until year 10 or beyond to capture another 50% growth in net income (those in business from 6 to 15 years earn an average net income of 45,700 per year).

Splits Favor Agents: With an established track-record, agents demand higher splits and brokers see diminished margins.

The research also revealed the early years of fast growth is when agents most value the support of their companies:

Agents who have the most [early success] are those that find a supportive brokerage and seek out a knowledgeable mentor for guidance.

Bottom line: If your company has a knack for finding new agents and helping them establish their careers, there’s still a good profit margin in this business activity.

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P.S.  To capture this margin for your business, you’ll need to hire new agents who have an above average capacity to produce and build within your organization.   If you’re struggling to find these hires, reach out to one of our hiring coaches.  We can show you how to double the number of high producers you hire and cut your failed hire rate by 50%.

 

The Simple Psychology of Real Estate Recruiting [eBook]

Unlock the secrets of effective real estate recruiting and learn how you can build trust, foster rapport, and understand the psychology behind candidate decisions. Discover techniques for converting acquaintances to hires and retaining agents by addressing their needs and aspirations.