How Much Do Real Estate Agents Make?

how much to real estate agents make realtor income

This past year, home sales were up about 10% over last year. With the housing market growth, comes the potential for more real estate agent opportunities. 

Those thinking of a career as a real estate agent might be wondering, "How much can a real estate agent make?" What kind of income can a realtor realistically generate year after year?

How is the average realtor income determined? Do the salaries of real estate agents differ greatly from one region of the country to another?

What factors affect the real estate agent income? Is there such a thing as a real estate agent salary or is it all based on commission. 

If you are looking for an answer to the question, "How much do real estate agents make?", stick around to see that data on realtor salaries and commissions. 

How Much Do Real Estate Agents Make? 

Last year, the average real estate commission works out to be 5.72%. When you use a realtor to sell your home, you can expect to pay between 5 and 6% in real estate commission. With home values varying greatly from one area to another, real estate agents salaries vary greatly as well. Let's look at the other factors that affect the average realtor income.

Are You a First-Year Real Estate Agent? 

When first starting out, real estate agents can't expect to make much money. Learning the business, getting your name out there, and working open houses to gain clients take up much of the first year as a realtor. 

The first 5 years as a real estate agent, you can expect to make an average between $44 and $50 thousand a year. 

How Many Real Estate Transactions Are Need? 

How much an agent makes is based on the number of real estate transactions completed. How many houses have you listed and sold? How many buyers have you represented that ended up buying a home? 

If you sell 4-6 homes a year, a typical number for real estate agents, you will earn a commission on each one. You will also receive part of the commission from a property sale when you act as the buyer's real estate agent. 

How Does Real Estate Commissions Work? 

The seller has an agreement with the selling agent through the broker. When a home is sold, the commission goes to the broker. It is split with the buyer's agent and the real estate broker takes a cut

For example, if you list a $300,000 home that is sold for asking price and you agreed to a 6%, the commission would be $18,000. When split, each broker (the seller's broker and the buyer's broker) would get $9,000. That is then split with the agent at a 40/60 ratio or $3,600 for the brokers and 5,400 for the agents. 

Average Real Estate Agents to Top Producers

The median pay for real estate agents was $50,300 last year. On average, one can expect to make that per year. 

Top producers, on the other hand, are those that sell at least one home a month. On average, they make $112,000. Top agents in places like New York City and Los Angeles can make a million dollars a year. 

Jumping Into a New Career as a Real Estate Agent Or Realtor? 

Now that you know the answer to the question, "How much do real estate agents make?", you can decide if it's the right career for you. Being a real estate agent or realtor can indeed be a lucrative career, and one that you can do succeed in without a pricey and lengthy college degree or graduate degree. 

There are also plenty of opportunities for upward mobility including owning your own real estate brokerage and hiring other real estate agents. Real estate agents and realtors can make real money really fast!

Check out the rest of our site for information on anything from investing and finances to career. We've got you covered, so visit the Real Estate or Career sections of the Frugal Finance Blog right now!

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