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How Much Do Real Estate Agents Make?

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It’s a common question for consumers, students and real estate professionals: How much do real estate agents make?

blank_check_salaryThe answer can vary wildly depending on where you’re working, how many hours a week and with whom. The following infographic will explain some of the variables. Whether you’re an agent, a potential buyer or just someone thinking about getting into the real estate business, we think you’ll find it useful.

And if you’re working with clients who are asking you questions about your commission, don’t hesitate to share this with them! They might be shocked at the percentage of the total commission you actually take home.

How Much Do Agents Make How Much Do Real Estate Agents Make?

Infographic courtesy of Point2

View this original post on the Point 2 blog.

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23 thoughts on “How Much Do Real Estate Agents Make?”

  • Frankie Hendricks says:

    Interested if there is no charge to me.

    1. Brent says:

      Many companies charge a small flat fee. I West Michigan they are usually between $200. – $500. Seldom is anything free any more.
      If you are a buyer, most likely the commission will be paid to your agent by the listing broker and you may be charged only the flat fee.

      Commissions vary. If you are selling you will most likely be paying the commission set by the broker.

      1. Barry Feldt says:

        Whah….Get another job then

  • Great information. Really makes it easy for consumers to see how brokerage fees can be distributed. I have a suggestion though. My suggestion is that “Basic Commission” be changed to “Average Commission.” Even though many listing agents charge a fee in the 5%-6% range, it’s important that consumers aren’t given the impression that there’s a “standard or base fee.” The brokerage fee is “whatever” the listing broker/agent and seller client agrees to.

  • CJ Johnson says:

    The word Salary should not be associated with real estate agents. Majority are 100% independent contractors. You also left out that they pay for their own insurance and pay all their own taxes. The average real estate agent NETS 1% on each transaction. The average NET commission earned on a $300,000 transaction is more along the lines of $3,000 and most have to work for free for months to get that paycheck, have no paid sick leave, no paid vacations, no paid days off, and are on call 24-7.

    1. Brigett says:

      That is exactly the truth… when I do my figures I base it on that general number… and you are absolutely right about working for nothing a lot of the time. I could not have said it better myself!

  • Rob Newkirk says:

    I think the average salary is skewed by the large number of licensed agents who come into this profession thinking its an easy payday, or a fun hobby/part-time job.
    The turnover rate is extremely high, and there are numerous agents that only close one or two transactions.

  • this is exactly what I explain to a client that ask the question and they would reply is that all thanks for explaining You work so hard and well
    Then a smile! you deserve more than that

  • Flavia Brown says:

    Rarely will you still see a 6% commission in California, and probably in most states.

  • Jack Fleming says:

    I use the Commisssion Pie to explain compensation. Both sides get half of the pie at settlement. Then that half gets split with the brokerage. Keep in mind the agent pays all of their expenses and is a 1099 contractor paying their own taxes. If you’re looking for a weekly paycheck Walmart and McDonalds are always hiring.

  • Helen Bunn says:

    I wish we could sell mostly $300,000 homes but we sell $20,000, sometimes $85,000, etc. You can see our area would not pay as well as the article states.

  • Helen Bunn says:

    PS
    I forgot to mention that a number of agents in our area do exceptionally well. Our local newspaper often prints articles about our local Realtor organization mentioning that agents are in the million dollar club and maybe the five million dollar club, etc. Some folks reading that think those agents made that much but that is the dollar amount of property sold or it can be based on the number of sides the agent sold.

    I do, however, agree with the rest of the article.

  • Suzanne says:

    Also keep in mind that as self employed individuals real estate agents pay both the employer and employee parts of social security for a total of approx 15% of eligible income.

  • James E Broadus says:

    As stated in other articles there can be a lot of expense in being a Real Estate Agent. No health care, no paid vacation, no paid insurance, no help paying social security. After you pay all of your expenses such as Multiple Listing dues, Association dues, Forms On line dues, Lock boxes and accessories, vehicle gas and insurance, your utilities, your rent. Hopefully you are single because you have to eat and you have not closed a deal in over a month. etc. That is a better picture of what in my opinion a lot of Realtors are looking at. You are right there is a high turnover in this business.

  • Carlos Noel says:

    The article states median salary. median is different than average. And the infographic does not include 100% agents. There are a lot of part time agents who would count in the total and lower the median income.

  • Darlene Zaremski says:

    When the economy was at its best (late years of Clinton) there was a huge following of Brokers in California that were charging a fee (my understanding was about $150-200 for a Buyer upfront to be their Realtor. It was working!! The loyalty was terrific. No one used the Realtor just to see homes and then purchase from another Realtor or relative and not one of them were just browsing and wasting a Realtors time. I live far from California, but I always thought that was a fantastic way to be a Realtor. Of course, the Realtor had signed certain obligations. Wouldn’t it be wonderful. How many professionals in other positions charge you just for advice or such (attorneys, mechanics, deposits taken all the time non-refundable. And we have no 401K LOL

  • Terri Evans says:

    Great Article! I also noticed that no one commented on getting personal agent referrals. So let’s say a Real Estate Agent calls you from another state and has someone that is moving to or lives in your state that is thinking about buying or selling. The referral fee is negotiated, normally 25% which is paid off the top of the commission. So using the same scenario above of a $300,000 house at a 3% commission and with a 50% split with your Broker equals $9,000. The Referral Agent gets $2,250 in commission right off the top which leaves $6,750. The Broker gets his half of $3,375 and you as the agent get $3,375. So many Sellers think as the Listing Agent that we get to keep the entire commission. When explaining the commission process I use the Commission Pie Chart and I base it on $100,000 with 3% going to the Listing Agent/Broker. This equal’s $3,000 total for one side and the Broker gets 50% of that commission which equals $1,500 a piece. When Sellers understand the concept that I only make $1,500, they then understand why I negotiate a 6% commission on selling there home. So many people think Realtor’s make a lot of money, but they do not realize that we pay for all our expenses such as advertising, signs, lockboxes, open house incentives, MLS fees, Board Fees, multiple Website fees, domain names, and not to mention that we work 7 days a week and are on call 24/7 if you want to be successful Realtor.

  • Meagan says:

    The real problem with the industry is that the model is faulty and outdated. It’s a set up for Buyers/Sellers to make demands and waste our precious time and money. No other industry operates this way. When clients can use us without fear of paying for our services up front, they don’t value us at all. We are used and abused with regularity and, we just have so smile and say “next”! An initial change in the industry might look like this: We should charge an initial fee for working with a client and Buyers should be required to sign a Buyer/Broker agreement – which is rarely used in our area. Sellers should be offered marketing packages which they pay for out of pocket until the listing sells. There would be much more loyalty and much less ‘listing-switching” when a property doesn’t sell at the price the Seller insisted on, even though they were provided all of the marketing data. Clients would be, for the first time, accountable to their agent. I think there is room in the market for every agent. We just need to get real about what our own needs are. If you want to work 25% or 50% of the time, you won’t be the top producer. Top producers work 100% of the time, are never “disconnected”, and they deserve what they get paid. But if you want to enjoy your life, be there for your family, sleep relatively well at night, then maybe you need to be happy with $40k/year (+/-).

  • Earnest Kidd says:

    Franchise fee of 6% from the total commission the brokerage receives, administration fee and E&O per transaction fee is also included.

  • Leslie says:

    And don’t forget Relocation Companies which typically take 35-40% off the top!

  • One major problem that stops us from being able to charge like other professionals is the ease of entry into the profession. I believe that too many companies operate as “puppy mills” where they entice new agents by promising high incomes and sometimes fronting the money for training and other initial costs as a loan to be paid back after a commission is received. They only need the agent to do a couple of transactions to cover their investment. If real estate required at least an Associates Degree or other significant training, then overall, agents could do a much better job and charge up front retainer fees.
    A few agents already charge retainer or contract cancellation fees, but they are few and far between because of competition from new agents who mostly won’t be around for long. I suspect that many real estate companies do not want higher education requirements, so individual agents need to lobby their representatives in order to make this into a real profession.

  • Joe Pryor says:

    A better question is, how many REALTORS® are getting wealthy? A very large percentage of NAR members make no commission but if I was using anecdotal evidence the number making over $250,000 a year would be 5% to 10% of the membership. An even smaller number of those are actually profitable. Our industry does a great job of teaching agents how to spend their way into success but keep it. $38,000 and change income if not subsidized by a spouse would put you at no more than $1800 a month net before personal expenses. We need different training for new people.

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