If you want to become a Tennessee real estate agent, you probably love the idea of setting your own schedule and building a network from the ground up. At the same time, as a practical person, you want to know how much you can earn buying and selling real estate in the Volunteer State.
Here's what you need to know about how much real estate agents make in Tennessee and how you can boost your earning potential.
Real Estate Commission in Tennessee
Real estate agents work on commission. According to Clever Real Estate, Tennessee real estate agents, also known as affiliate brokers, collect a 5.6% commission from the sale of a home. That is slightly higher than the national average of 5.49%.
Most of the time, the commission doesn't go to a single agent. Two agents are usually involved: the seller's agent, who lists the property, and the buyer's agent. The way these two agents divide the commission varies from state to state. According to Clever, the split in Tennessee is currently 50/50.
For instance, if a real estate agent sells a home at the current median list price of a home in Tennessee, which is $349,000, they will earn 50% of $19,544, or $9,772. The buyer's agent collects the rest.
Keep in mind, brokers will also take a cut of each agent's pay. Brokers typically take 50% of the agent's commission as a fee for their services. That will leave the agent with an average total take-home commission of $4,886.
Understanding Real Estate Salaries in Tennessee
According to Indeed, the average base salary for a Tennessee real estate agent is $84,815. To earn the average salary, a listing agent would need to sell more than 17 properties at the current median price each year.
Several factors have an impact on how much an individual real estate agent will earn. One of them is experience. Indeed points out that agents with one to two years on the job earn an average of $76,613 a year, while those with more than 10 years of experience earn an average of $100,521 annually.
Another big factor in how much you can earn as a Tennessee real estate agent is your location. One of the hottest real estate markets in Tennessee right now is the greater Nashville area. But the average real estate agent in Nashville earns $81,376, which is slightly lower than the state average.
What's the reason for this difference? Buyers are gravitating toward Nashville's upscale suburbs, where homes sell at a higher price point. Choosing where to locate your business and knowing which area markets are more lucrative is crucial if you eventually want to earn top dollar as a real estate agent.
Keeping on top of fast-growing areas that may currently have less competition may be another great strategy to increase your earnings. But be sure to look at average home prices in each community.
How to Boost Your Earning Potential
Regardless of where you are an agent and how long you've been on the job, you can work actively to improve your earning potential. This is one of the main advantages of being a real estate agent!
Garrett Beasley, a fourth-generation real estate agent at Brentwood Realty in Brentwood, Tennessee, points out that real estate is a business where hard work and determination matter. The advice he gives real estate agents who are just starting out is to grow their sphere of influence in the community.
"Real estate agents should network by getting involved in local charities and clubs," said Beasley. "The local chapter of the Rotary Club is a great place to start."
The harder you work to connect with people in your local community, the more likely it is that people will reach out to you when it comes time to sell their homes. Network building, or "growing your sphere of influence," is essential if you want to exceed the average earnings of a real estate agent in Tennessee.