This guide will dispel any confusion you have around how \u201ctop of market\u201d is measured and the ways in which brokerages and various organizations go about identifying top producers. We\u2019ll also offer guidance on how to tailor your agent selection beyond the singular \u201ctop or not\u201d benchmark.<\/p>\n To understand how agents can qualify as top producers, it\u2019s helpful to know how they get paid. In a typical transaction, the listing agent will charge their seller a commission that amounts to 5.8%<\/a> (we\u2019ll round up to 6% for simplicity) of the property\u2019s sale price. That commission usually gets split 50\/50 with the buyer\u2019s agent. In effect, each agent takes home a cut of about 3%, though an additional portion will go toward paying brokerage fees.<\/p>\n Within this commission structure that depends on deals closing, agents have a few main avenues to become a top producer. They can either sell more homes than their peers, sell more expensive homes than their peers \u2014\u00a0or both.<\/p>\n An agent can work with both buyers and sellers and be a top producer. However, as agents gain experience, they tend to \u201cgraduate\u201d into taking on more listings than buyer clients. Here are the main metrics used to identify top producers in the real estate industry:<\/p>\n An agent earns a transaction side when they help either a buyer or seller close a deal. According to the National Association of Realtors, the median number of transaction sides<\/a> in 2020 was 10 units<\/a> per Realtor\u00ae, or less than one per month. The number of transaction sides required to become a top producer at a particular brokerage or in a certain area depends on the individual benchmarks they\u2019ve set.<\/p>\n This is the total number of properties sold annually, so it excludes buy-side transactions. Eva Cedillo, a San Joaquin County, California real estate agent specializing in single-family homes, says that in her market, a top producer should sell at least 100 houses per year. In other markets and real estate offices, the top producing threshold could be more like 40-50 homes per year<\/a>.<\/p>\n Gross commission is calculated by multiplying the sale price of the home by the share of an agent\u2019s commission rate, then adding together their total commissions for a particular time period (usually one year).<\/p>\n In this sense, gross commission is the metric that most closely represents an agent\u2019s actual earnings. According to the Bureau of Labor Statistics, the median annual earnings for agents was $49,040 as of May of 2020. By contrast, the top 10% of agents earned more than $112,410<\/a>. Top agents can earn much more than that, particularly in higher-priced areas like Los Angeles, where the average home price is $810,372.<\/p>\n For example, if an agent sold 10 homes in Los Angeles at the median local price of $810,372 and took home a 3% commission each time ($24,311) their yearly gross commission would amount to $243,110. That would put the agent at a much higher income than average nationwide, despite doing an average number of transaction sides.<\/p>\n Sales volume represents the total sales price of all closed properties in any given year. For an agent selling an average of 12 units at the median U.S. home sale price of $355,900<\/a>, that would equate to an annual sales volume of $4,270,800. Benchmarks for what qualifies as \u201ctop producer\u201d sales volume will also vary by market since prices can vary so widely. In Sacramento, California, for example, a real estate agent must sell $5 million<\/a> in real estate volume to qualify for the \u201cMasters Club,\u201d but in Iowa, an agent only needs to hit the $1 million<\/a> mark to receive an individual achievement award.<\/p>\n A few of the key organizations that rank real estate agents and hand out the \u201ctop producer\u201d badge include local real estate associations, individual real estate brokerage offices, media outlets and independent ranking firms, and real estate technology companies such as HomeLight that offer agent-matching services to buyers and sellers.<\/p>\n Across the U.S, there are more than 4,700<\/a> real estate associations, which are trade groups that serve as support systems for agents and brokers. The National Association of Realtors is the biggest, with members from all across the country, but almost every city has its own local organization, each with its own methods of determining who qualifies as a top agent.<\/p>\n Licensed real estate brokers can create their own brokerages and hire agents to work for them. Each brokerage typically has its own method of ranking the performance of its agents.<\/p>\n There are several industry news outlets and real estate companies that rank agents on a national level:<\/p>\n Since 1987, this real estate organization<\/a> has been one of the top sources of news and information on the residential brokerage industry. It publishes several yearly industry rankings, including:<\/p>\n Publications like Top Agent Magazine<\/a> feature the top-producing agents in the U.S. and around the world. Its Top Agent Editions<\/a> break out the top 1% of featured agents in individual U.S. states and other countries. For example, you can click to view the top agents in Texas<\/a>, then drill down to read detailed bios of each agent.<\/p>\n Each year, HomeLight announces the top 5% of real estate agents across the country based on verified housing market data through our HomeLight Achievements<\/a> program. We release three types of awards:<\/p>\n It\u2019s great to work with an agent who has a proven track record in your market \u2014 but it\u2019s even better to work with one who has successfully sold homes similar to yours. That means the best agent for you might not be the same one who sold your friend\u2019s, co-worker\u2019s, or cousin\u2019s home.<\/p>\n Word of mouth might work great for finding a handyman or a mechanic, but it could fall short when it comes to finding an agent who is intimately familiar with your type of home, your neighborhood, and the surrounding community.<\/p>\n At HomeLight, we use a unique agent matching platform to help you find not only the best agent, but the best agent for you<\/i>. Don\u2019t get us wrong: Agents work hard to sell as many units <\/a>(and as much volume) as possible, and it\u2019s important to highlight those numbers. But we also dig deeper to look at the variables that are specific to your needs:<\/p>\n How many houses has the agent sold within a small radius of yours?<\/b> How many houses has the agent sold in your price point?<\/b> What percentage of the agent\u2019s sales have been over the listing price? <\/b>![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/05\/top-producers-real-estate-1-666x381.png\")
<\/a>What makes someone a \u2018top producer\u2019?<\/h2>\n
Transaction sides<\/h4>\n
Units sold<\/h4>\n
Gross commission<\/h4>\n
Sales volume<\/h4>\n
![\"Magazines](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/05\/top-producers-real-estate-magazine-666x381.png\")
<\/a>Who identifies top producers?<\/h2>\n
Real estate associations<\/h3>\n
\n
Brokerages<\/h3>\n
\n
Press and independent ranking firms<\/h3>\n
RealTrends<\/h4>\n
\n
Real estate publications<\/h4>\n
HomeLight Achievements<\/h4>\n
\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/05\/Screen-Shot-2021-02-23-at-7.26.14-AM-775x370.png\")
<\/a><\/p>\n<\/h2>\n
When \u2018top\u2019 meets \u2018tailored\u2019, magic happens<\/h2>\n
\nAn agent with firsthand experience in your neighborhood will have more knowledge of recent sales comps, market trends, and what buyers are looking for in your area.<\/p>\n
\nA buyer looking at million-dollar listings will have different criteria and motivations than someone who\u2019s looking to spend $300,000. An agent with experience in your price point will have a better sense of how to attract your target buyers.<\/p>\n
\n<\/b>The no. 1 goal for most people selling a home is to maximize value. An agent\u2019s sale-to-list price ratio<\/a> will tell you how much, on average, they get for the homes they sell compared to the asking price. For example, if a house is listed at $300,000 and sells for $330,000, the sale-to-list ratio would be 110%. The ratios can vary depending on location and inventory, but generally speaking, higher ratios bode well for an agent\u2019s ability to attract and negotiate strong offers.<\/p>\n