How Much Do Real Estate Agents Make?



Unlike salary-based jobs, where the average worker earns a certain amount, real estate agents work for commission. While this model has its pros, it can also result in large variations in pay between agents based on their performance. Some real estate agents may be able to find lucrative niches within their field, allowing them to generate high levels of income with every transaction they close.

For instance, residential real estate agents may be able to make up to 6% of the sale price of each property they sell. As a result, one successful deal can result in thousands of dollars for an agent. Similarly, commercial real estate (CRE) agents may earn up to $85,000 in annual earnings. These agents specialize in helping businesses and investors acquire, lease, or sell industrial and office space, retail properties, or land for development. Read more

Real estate agents typically earn a fixed percentage of the sale price of each property sold, and this percentage is set by their sponsoring brokers. These percentages can vary, with newer or less experienced agents earning lower commission rates than more established ones who have negotiated better agreements with their broker-owners. In addition, the percentages earned by agents can be further eroded by federal, state, and self-employment taxes as well as business expenses such as insurance, dues for multiple listing services, technology fees, and advertising.

As a result, many agents choose to supplement their earnings with other full- or part-time jobs or gigs. Others may hang their license with a brokerage for the option value it provides, but focus on other full-time or side businesses. This can create a level of financial flexibility that allows real estate professionals to make money at the pace they desire.

While some agents are able to secure a significant level of earnings in their early days, the vast majority will struggle to hit those levels until they have built up a solid book of business and have closed a number of deals. For this reason, it is important to understand that becoming a successful real estate agent will take time and effort, and most agents will not see the kinds of fast-paced payouts that are seen on reality TV.

Another factor to consider is that most real estate agents are independent contractors, meaning their brokerages will not withhold taxes from their paychecks as they would for employees. Consequently, it is up to individual agents to save money for quarterly estimated tax payments.

Lastly, it is worth noting that the median gross income for real estate agents and brokers in the United States was $39,800 in 2017. This figure does not include other forms of income such as rental income or investment returns on previous sales. However, it does provide a useful snapshot of the overall income potential for those who pursue a career in this field.


Leave a Reply

Your email address will not be published. Required fields are marked *