An Open Secret: How Much Do Real Estate Agents Make?

how much to real estate agents make realtor income

As of April 2019, home sales were up 12% 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?" 

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 salaries and commissions. 

How Much Do Real Estate Agents Make? 

In 2019, 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 an agent, you can expect to make an average between $44 and $50 thousand a year. 

How Many Transactions? 

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 agents, you will earn a commission on each one. You will also receive part of the commission from a sale when you act as the buyer's agent. 

How Does Commission 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 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 Agents to Top Producers

The median pay for real estate agents was $50,300 in 2018. 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? 

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. Check out the rest of our site for information on anything from investing to healthcare to travel. We've got you covered. 

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