Estate agencies have historically been seen as a place where people have a good chance to make money whether or not they have any academic qualifications. Historically, the estate agency industry has not been as heavily regulated as many other professions which can enable people to succeed based upon their merit & their abilities rather than their credentials.
Although this is changing somewhat (and although different countries in the UK have differing requirements), estate agents tend to earn more than many other professions, partly because of their commission structure. So how much do estate agents earn? There are a few answers to this depending upon the seniority of the agent or whether they are running their own business or working for someone else.
This article discusses the earnings potential of both people that have a job as an estate agent & those that run their own estate agency businesses for those who would like to take a more ambitious approach!
Estate Agent Career Path & Progression
There are a number of career paths for estate agents depending on their different specialisations (ie residential sales, residential lettings, commercial sales, commercial etc).
Generally speaking the path for an estate agent focused on sales (residential or commercial) would be:
- Trainee sales negotiator
- Sales negotiator
- Senior sales negotiator
- Sales manager
- Area sales manager
- Regional sales director
- Sales director
- Regional sales director
- Chief executive
The career path for a letting agent (residential or commercial) would typically be:
- Trainee lettings negotiator
- Lettings negotiator
- Senior lettings negotiator
- Assistant lettings manager
- Lettings manager
- Area lettings manager
- Regional lettings director
- Lettings director
The above will depend upon the size & type of the business that you work for.
Entry Level Estate Agents Salary in the UK
If you choose to work for an estate agency, it is common to receive a guaranteed salary for the first three months in order to cover the period for you to build a pipeline of sales & commissions. Currently, the annual rate of this guaranteed salary would be between £20 & £30k depending upon the agent & their location.
The earnings potential for you & the estate agent you work for is usually unlocked when you move to a commission-based model. This would entitle you to a percentage of the commission from the sale of the property. In this case, you would generally move to a payment model where you earn a slightly lower salary but a commission (this might be around 10%). This incentivises you to sell properties for the clients & for the agent you work for.
If the agency you work for offers a lettings service, you may also receive commission based on a percentage of the monthly rent collected.
Successful agents can expect to earn £35k in their first year in salary & commission.
The great thing about the estate agency industry is that you can join the industry without experience & progress according to your abilities.
How much do estate agents earn in commission?
Those on the outside of the property industry are always curious about estate agent commissions, how commissions work, & what is the average commission an estate agent receives.
Typically speaking, estate agents will earn around 10% in commission although there may be room for negotiation if you are particularly able. The final value you earn will depend on you & the sales you are able to bring in.
In theory there is no upper limit to what you can earn as an estate agent. A recent article in the Telegraph highlights agents earning £800k commissions from a single sale. Although it’s not common, it’s possible!
Because earnings vary depending upon commission, asking ‘how much do estate agents earn in a month’ isn’t the best question to ask: there will be variation from month-to-month depending upon how many sales have completed in a given month & depending upon the time of the year. Commission-based salaries are best looked at when averaged out over a year rather than on a month-by-month basis. If you are considering working as an estate agent, you should be aware that there is variation and prepared for quieter months as well as busier ones.
Estate Agent Bonuses
In addition, you will likely be incentivised with a bonus. This bonus may be monthly, quarterly or annual. This will keep you focused on generating business throughout the year. For example, you may earn a bonus of 10% if you earn more than £250k of commission for the business in a year. In this case, the business will have sold £25m of property & made £250k & you’ll be rewarded by earning an additional £25k.
What is the salary of an experienced estate agent?
Experienced estate agents will have honed their abilities to sell ro let properties & will be a valuable commodity for an employer. The average estate agent salary is currently £41,392 which is significantly higher than the UK average. This reflects the ability of the agent to drive sales & the value of the role in society of helping people to sell an asset that is not liquid.
At the higher end of the scale, in certain management positions, you could be earning up to £100,000.
What skill do you need to improve to earn more as estate agents?
The answer to this question is the bridge between working for somebody else and running your own Estate Agency business. in order to earn more as an estate agent, you need to bring in and complete more sales or to let more properties. If you can build a strong pipeline of sales and increase the portfolio of lettings properties that you have under management, your earnings will increase. The same is true whether you are working for somebody else or whether you run your own estate agency business.
There are a few skills involved in this. they mainly come down to whether you are good at building relationships. If you can build relationships with potential customers either on the phone, in person or through networking, you can bring in a steady stream of property sales and rentals. If you are somebody who is particularly able to do this then you could consider running your own estate agency business.
Running your own estate agency business as a Belvoir Group Franchisee
If you are particularly interested in maximising your earning potential then becoming an estate agent with Belvoir Group might be right for you.
Why? Because, by becoming a franchisee, you have the opportunity to maximise the upside & minimise risk. The upsides of owning a franchise business from an earnings perspective are that you an effectively pay yourself four times:
- You can take a salary – like any other estate agent, you can pay yourself for the work you do
- Your company can contribute to your pension – company contributions to pension schemes come before tax means that your pension contribution can be paid before you pay corporation tax
- You earn dividends on company profits – any profits your company makes can either be reinvested within the business or taken as dividends
- When you choose to retire or leave the business you’ll have a saleable asset –
In addition, if you would like to grow, Belvoir Group’s Acquisition Programme is designed to help franchisees that want to expand their portfolio of businesses find other businesses to purchase. If you would like to take on a second, third or fourth franchise or, if you’d like to increase the size of your lettings portfolio, Belvoir Group can help you identify suitable prospects and be seen as a credible buyer.
Furthermore, Belvoir’s systems & systematic approach is built upon the collective experience of over 300 franchisees: simply put, our business model is proven to work which means that, by becoming one of our franchisees, your business will be more likely to succeed than it would if you were to start your own business.
Finally, because of Belvoir’s reputation & the appeal of successful franchise businesses, you will more readily be able to find the funding required to start & grow your business as a Belvoir Group franchisee: it’s often the case that banks will only want to lend you money when you don’t need it (before you have a proven track record, you might not be looked at as a risk worth taking by a bank) but Belvoir’s history of success means that banks & other lenders are interested in helping new franchisees: their businesses are more likely to succeed & the bank is more likely to generate a return on its investment.
Do I need experience to become an estate agent?
The good news is that, unlike many other industries, you don’t need experience in order to become a successful estate agent, either working for someone else or by running your own agency. This doesn’t mean that everyone can become a successful estate agent but it does mean that you can become one on merit & effort, whether you are academically gifted or not.
If you are interested in learning more about running an estate agency, the video below gives a brief explanation about experience & our video FAQs & case studies will give you more information.