New research suggests estate agents earn some of the lowest basic salaries of all sales professions.
Nested, an online agency promoting the self-employed agent business model, has analysed the base salary excluding commission of 12 of the most common sales professions.
It says it found that on average, the basic take-home pay of all the professions is £26,338.
However, estate agents earn a basic of just £24,817, some six per cent less than the average.
Just three sales professions offer a lower rate of basic income: insurance sales agents earn an average of £24,372, while retail sales executives earn just £23,415. At £21,323, telesales representatives earn the lowest basic salary of all sales professions.
Nested’s head of commercial activities - Alice Bullard - says: “Sales roles are generally commission-based and while the earning potential can be high, basic salaries are fairly low, particularly if you’re an estate agent.
“When you couple this with the fact that estate agents only pocket a small slice of the fee charged to home sellers, it’s fair to say they are probably underpaid given the vital role they play in such a momentous stage in people's lives.
“The perceived security that comes via employment is enough for some, but it’s no wonder that so many are adopting the self-employed business model in order to significantly boost their income potential.
“While letting go of a guaranteed income may have been a traditionally scary prospect, platforms such as Nested now provide the support and resources needed to make the jump, for those that have what it takes to succeed in sales.”
When it comes to the highest earnings sales professions, pharmaceutical sales reps sit top of the table. On average, the guaranteed income of a pharma rep is £35,228 - that’s 42 per cent higher than the average estate agent.
Advertising sales reps (£30,638) and car sales execs (£30,312) also pocket a guaranteed annual income of more than £30,000.
|
Sales profession |
Est ave annual salary (base salary excluding commission) |
|
Pharmaceutical sales representative |
£35,228 |
|
Advertising sales representative |
£30,638 |
|
Car salesman/car sales executive |
£30,312 |
|
Door to door sales representative |
£28,338 |
|
Recruitment agent |
£26,578 |
|
Medical devices sales representative |
£26,558 |
|
Software sales representative |
£25,466 |
|
IT sales executive |
£25,201 |
|
Estate agent |
£24,817 |
|
Insurance sales agent |
£24,372 |
|
Retail sales executive |
£23,415 |
|
Telesales representative |
£21,323 |
|
Average Sales representative |
£26,338 |
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The answer? To join a self employed agency model with no salary, no minimum wage, no pension, no annual leave, and the loss of ability to obtain a mortgage for several years.
When I started in agency I knew that starting salaries were low but it’s a career ladder and I don’t regret taking the agency career route at all. I’m glad I get annual leave and pensions etc, and I can get a mortgage!
When I was an estate agent in mid 80s on Reading I was an area manager – I had sales negs working for me who were earning 25K a year had a company car with a petrol card and pension private health care.
Looking at the inflation index 25K then would be about 85k today.
The people who worked for me were real sales people. They would be on the phone all day ringing potential vendors and buyers.
They would knock on doors of houses on the market to see if we could help.
They would go to the library and go at the electoral roll to get names of homeowners whose homes were on the market and look the number up in the phone book and ring to try to get through the door to sell our service.
That is what they were expected to do.
As a developer now I see none of this. I have had schemes ion the market and not been contacted by any other agent that the one acting.
Companies now do not want to pay a good salary.
Competition has reduced fees and I guess profitability and the ability to pay a good salary.
The result I think is that ambitious people go to other better paid professions.
Cold calling is not an option
Looking up phone books is no longer an option
Targeting specific properties on for sale is no longer an option
You are correct in that as an estate agent for 20 years I am leaving in the next couple of months on a new business venture that will make me double than what I am making now without all the red tape, AML obligations and extortionate portal fees.
Its not that companies don't want to pay a good salary but as you mentioned fees have been reduced dramatically to compete with the hybrids and this is the killer nail.
Jan, Paul, you make good points. And yet only yesterday I saw an article which extolled the virtues of fee sharing between agents. This was being promoted by another self employed pyramid type scheme. If fees are shared, profits will fall even further and the agents’ take home pay will be less than it is now.
What a load of negative comments. Paul yes move on, maybe Estate Agency is not for you. Its one of the easiest jobs ever. Buyers and sellers come to you, you just match them together. Properties usually sell themselves if valued and presented correctly. You are selling a home which will make the buyer usually double his worth in 15 years. Sellers will be grateful and pay the fee if you get off your chair and do some work. Never do under !% and those jokers doing the job for a few hundred can never give a service. Raise your profile, get motivated, motivate your team and reap it in.
It's definitely a case of 'horses for courses', or 'each to their own'. Some people want job security so they can apply for mortgages (see above) and this is a good point, as in the early years of business ownership, securing a mortgage can be a little more tricky, but not impossible. Others want the freedom to work without a boss looking over their shoulder, and by taking a risk to run their own business, are happy to do so, on the basis of earnign a bigger income.
For EweMove franchisees, we see them charge between 1.0-1.5% +VAT typically on an average house value of £325k. And they then tend to achieve a minimum 50% net margin on their business, compared to traditional independent high street operators who report c20%.
So if you complete 1 house per week, that's easily north of £100k income annually, with the potential to earn much more, build a lettings portfolio for long-term recurring income and then, when you get bored, selling your asset for a good lump sum.
All this provides an attractive alternative to the employment model with pensions and holidays.
As any successful business owner will report, once you've done it, you'll never seek out an employed role again. That sums it up really!
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