What does an estate agent in Spain charge?

Clear objectives and real expectations to succeed in the sector.

Every now and then, I review the data, make calculations and approximations to find out what a real estate agent bills in Spain. It is not an obvious or easy exercise; the data are many, diverse, decentralised... and the real estate realities are disparate and far from each other.

The aim is always the same: to provide information that sheds light on the data to help working estate agents to set achievable goals, and to modulate the expectations of those considering a career in this sector. Let's get started!

What does an estate agent in Spain charge?

Sales managed in Spain by real estate agents

In Spain, 550,000 homes were sold in 2021 (Sale and purchase of dwellings in Spain, according to the General Council of Notaries and the INE), but how many of these sales were handled by estate agents? We will take as good the data resulting from combining this information provided by Alfredo Díaz-AraqueProntopiso's CEO - that between 70% and 80% of sales have been handled by real estate agents -; this information provided by the UCI/SIRA Real Estate Barometer -that 64% of the second-hand sales were handled by estate agents; and this information provided by Colliers -that new construction sold in 2021 could account for approximately 11% of total sales.

Thus we have a first approximate number that would be consistent with all these sources of information: 70% of sales were handled by real estate agents; a total of 385,000 homes sold in 2021.

How many agents handle sales?

According to the December 2020 databy the 115,000 agents integrated into the 56,838 agencies operating at that time.

Up to this point, there is some consistency with the information provided by markets that are very transparent with the data, such as the US market where, according to the NAR statisticsthe average Realtor® made 10 "sides" - the equivalent of five full operations - per year in 2021. Consistent with the 3.4 sales per agent per year in Spain -385,000 sales among 115,000 agents, since in the United States, 90% of transactions - and not 70% in Spain - are handled by agents.

Also, for the purpose of comparing this figure, we can compare it with the average productivity figure that can be deduced from the information published by the large agent networks in Spain: 5.3 sales per agent and year in Re/Max Spain in 2019; 3.7 sales per agent per year at Century 21 Spain in 2021; 1.8 sales per agent per year at Engel & Völkers Spain in 2021. The average - they have more than 4,500 agents between them, so that I consider them to be representative - is 3.6 sales per agent per year; a figure that is entirely consistent with the national figure we have seen above.

Fees earned for each sale

And what is the average fee for each sale? For this calculation we will take 97m2 as average surface area of housing in Spain1,675/m2 as average unit price in 2021 and 4% as the average fees at which estate agents work in Spain: 97 x 1.675 x 4% gives us 6.499€ merited for each sale.

Lastly, in 2020, 510,000 rental contracts -of which corresponds to dwellings belonging to Catalonia or the Community of Madrid - of which 221,000 were new contracts. If the average price of rented housing in Spain 1,123/month as of January 2021 and the fees applied to their management are, in most cases, equivalent to one month's rent, there are €250m in rental fees, of which Catalan and Madrid estate agents - I estimate between 45,000 and 50,000 agents in just over 21,000 agencies - captured around €150m. 

Conclusions

The first conclusion we can draw by combining the four extracted data is that a Spanish estate agent invoices, on average, around €23,000 per year. But since - in the words of Bernard Shaw - "statistics is a science which shows that if my neighbour has two cars and I have none, we both have one", it is perhaps worth making a few clarifications:

1. Depending on the areaReal estate travels badly" (thanks to Jorge Benjumeda for this quote to which I so often resort)... Therefore, an average agent operating in Barcelona or Madrid with 3.4 sales operations and 4 rentals per year would generate a turnover of around €50,000 per year, while that same productivity in Lugo, the provincial capital where housing is cheaper, would generate an income of approximately €15,000. Nothing to see.
2. Depending on the distribution of sales between agentsThe real estate sector has a very high staff turnover - in Spain, 50% annually in large real estate agencies/networks - and there is statistical evidence that in the United States the productivity of agents is governed by ratios close to the Pareto Principle (80/20 rule), specifically, taking a sample of 120,000 agents in rural and urban environments in the United States, 25% of the agents (those who do not "rotate") carried out 75% of the transactions. What if this were also the case in Spain? Then some 29,000 agents would be distributing 290,000 sales transactions and invoicing an average of 65,000 € per year. But be careful! If these agents top producers were operating in, for example, Madrid, Barcelona, Valencia, Palma de Mallorca, Malaga or Las Palmas de Gran Canaria, they would be turning over in orders of magnitude close to €120,000 per year.

A final comparison/validation resource can be found in the State of the Labour Market in Spain report by Infojobs and Esade. It reports that the average advertised "salary" - in reality potential turnover - in real estate agent job vacancies is €55,856 with an average deviation of €25,385, i.e.: a minimum expected income of (rounded) €30,000 per year with a potential of up to €56,000 per year.

In order to finish and to have a panoramic vision that includes diverse realities and reasoning that we have been discovering, we will order it from least to most:

• 15.000€: The annual turnover of an average estate agent in Lugo.
• 23.000€: The annual turnover of an average estate agent in Spain.
• 30.000-56.000€: The average "salary" in job offers for freelance agents.
• 50.000€: The annual turnover of an average estate agent in Madrid or Barcelona.
• 65.000€: The average annual turnover of 25% of the most productive agents in Spain.
• 120.000€: The approximate annual turnover of a top producer working alone in a prime market.

I am sure it is quite possible that those of you reading this post will have different and nuanced opinions. I would love to hear your comments.

And if you are an active and experienced real estate agent, with a vocation for improvement and growth, at Monapart we invite you to become part of the Buenagente CommunityFind out what we can do for you, the community of agents who love being agents! Shall we talk?