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On Average How Much Do Real Estate Agents Make – Revenue per sale | Revenue by State | How Agents Are Paid | Are commissions worth mentioning? | Annual Income | Hourly earnings | FAQs
The average annual salary for a real estate agent is $61,480, but individual earnings vary widely.1 Source US Bureau of Labor Statistics (2021, May). Professional employment and wages. Retrieved June 22, 2022, from https://www.bls.gov/oes/current/oes419022.htm While top sales agents can make six or seven figure salaries, half of agents earn less than $48,340 per year .
On Average How Much Do Real Estate Agents Make
Most real estate agents make money through commissions – which typically run the seller 5-6% of the sale price of their home (although the rate can be negotiated).
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While the seller’s agent technically receives a commission, the buyer’s agent also receives a share — and both agents split their earnings with their supervising brokers. While real estate agents must work for a sponsoring broker, brokers can work independently and hire other real estate agents to work for them.
Commissions are split between agents and brokers, but 50/50 is common for new agents, while more experienced agents may keep 70 percent. After commissions are split, an agent’s home payment on a $400,000 home sale would be about $5,500–$8,400 — or 1.5–2.1%.
Listing agents charge sellers an average commission of 5-6% of the sale price of their home. However, this amount is usually split with the buyer’s agent.
Agents don’t earn all of their commissions from sales, though – each broker pays a portion of the sales they make.
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At the end of the day, most agents go with about 1.5% per sale. On a home valued at $200,000, that equates to $3,000. However, on higher-priced homes, agents pocket more.
For example, real estate agents in New York make $102,200 per year, on average. Agents in South Dakota, by comparison, make $45,550 a year.
The amount of the commission — including the percentage that goes to the buyer’s agent — is specified in the listing agreement drawn up between the home seller and their agent.
When the home sale closes, the commission is deducted from the proceeds and distributed directly to the brokerages of the buyer’s and seller’s agents through the escrow or title company.
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Each broker then distributes the appropriate share to their agents, according to their agreed commission split, which usually starts at 50/50 and graduates to 70/30 or better as agents increase their sales numbers. .
Some agents (such as those who work for Redfin) receive a base salary from their brokerage and a small commission from each sale – but most work exclusively on commission.
$19,188 (equivalent to 5.37% on a typically priced home) in realtor commissions – make it one of the biggest expenses you’ll pay when selling a home.
However, commission rates are not standardized across the industry. They range from as low as 4.45% to as high as 6.34%, depending on the market.
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While commissions are usually set by an agent’s broker, some realtors have the freedom to set their own rates.
If you are comfortable initiating the conversation, your agent may be willing to give you a discount. Or, you can skip the negotiation and work with an agent who offers off-the-beaten-path rates.
Our friends at Clever have pre-negotiated commissions with partner agents across the country, so you only pay 1.5% to your listing agent when you sell your home!
The US Bureau of Labor Statistics puts the median annual salary for a real estate agent at $48,340 – meaning 50% of agents make more and 50% of agents make less.
What Commission Percentage Do Real Estate Agents Make?
While most agents work on a commission basis, you can calculate their income by adding up their entire take-home commissions for the year.
The typical take-home pay for an agent on a $350,000 home (which is close to the nationwide median home price) is $5,250.
Theoretically, a real estate agent needs to complete approximately 9-10 transactions per year to earn the national median income.
To break into the top 10% of agents making $102, 170 or more, you need to sell about 20 homes per year.
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On top of the commission split, most real estate agents – unless they are salaried – will also need to cover:
According to the US Bureau of Labor Statistics, the national average hourly earnings for real estate agents is $29.56. Agents are not paid by the hour, but this calculation divides the national average ($61,480) by 2,080 hours (full time).
As a home buyer or seller, you are never billed for the hours your agent puts in during your sale – they are compensated for their time with a commission after the sale closes. .
Brokers — who either meet additional licensing requirements to work independently or hire other agents under them — earn an average annual salary of $86,930.
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In addition to keeping 100% of the commission from their deals, brokers earn a percentage of the commission brought in by the agents who work for them.
Many brokers split the commission 50/50 with their agents, so if the commission from the sale is 3%, they make 1.5%.
Other brokers may not collect commissions but instead receive a salary for carrying out the day-to-day operations of the brokerage and keeping the firm in compliance with state and national real estate laws.
The national average down payment for a realtor is 1.7% of the home’s sales price. On a $100,000 sale, an agent will make $1,700.
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Newly constructed homes are still sold by anyone, even if a developer or property management company owns the property. If the property is listed, in most cases the owner pays the listing agent, who splits his commission with the buyer’s agent.
We used publicly available data from the US Bureau of Labor Statistics to obtain information on the annual earnings of real estate agents nationwide in 2021.
Salary information in our customized data tables intentionally excludes real estate brokers. Brokers often work as both agents and brokerage managers, so their income is usually higher and their compensation structure includes a salary or a percentage of the brokerage’s gross sales.
Average commission numbers and total take-home pay were obtained from Clever Real Estate’s 2021 survey of real estate agents in all 50 states.
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Andrew Witick is a Content Team Lead at Clever Real Estate. He writes articles that inform readers about every aspect of the home buying and selling process. He also reviews emerging real estate tech companies. Do you make more than agents in New York? Take a look at how much real estate agents in New York make and what factors into commission.
If you’re thinking about going into a career in real estate in New York, one of your biggest questions is how much money you’re going to make.
Unlike salary-based jobs, where pay is fairly standard and often tied to your seniority, there is a large variation in pay among commission-based fields such as real estate agents. It makes sense if you think about it: the more you sell, the more you make.
How Do Real Estate Agents Get Paid?
Some agents go into real estate for the flexibility and choose to work fewer hours and make less money. Others are grinding all day every day to bring home those fat commission checks.
Regardless of your work style and goals, though, it’s important to go into business with your eyes open. So let’s talk about average agent pay.
According to the Bureau of Labor Statistics, the average salary for a New York real estate agent in May 2021 was $81,020 a year. That works out to $38.95 per hour.
Five borough agents make slightly more on average (and if you’ve ever been home shopping in NYC, you’ll know why). Indeed.com estimates that the average NYC real estate agent brings home $120,000 a year.
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For a luxury real estate agent in the city, Zip Recruiter makes an average annual salary of $125,683.
That’s not small potatoes! But you’re probably looking around and wondering how every property you own is listed for millions of dollars and agents are taking homes in the low six figures. The answer has to do with commission distribution. Let’s get into the details!
In New York, as in the country, 6% commission
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