How Much Do Real Estate Agents Really Make?
Real Estate Agent Income
Contrary to what you see on TV and social media, most real estate agents are not making six-figure commissions on sales or earning millions of dollars a year. Especially not at the beginning of their careers.
A real estate agent's income typically is related to a few things….
The value of the market they are selling in. Are they in a high average price point or a low one?
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The types of clients they work with. Are they a luxury agent selling million-dollar homes or a typical agent selling regular homes?
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Their effort. Are they determined to make real estate their career, or are they looking for a side gig?
Their main reason for becoming an agent. Do they have a deep reason why being an agent is important to them, or are they looking to make a quick buck?
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Out of all the reasons listed above, the last one is what truly determines a real estate agent’s income. This is because if you have a deep enough reason for doing anything, you will make sure it gets done no matter what!
There are hundreds of factors that determine what an agent will make. For me to throw numbers at you would be irresponsible, so I’m going to break it down using statistics from the National Association of Realtors.
Below is a chart that shows how much agents made in 2024 based on their experience in the industry.
How Much Agents Make
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New Agents. Most new agents in their first few years make less than $10,000 per year.
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Veteran Agents. While the numbers are more even across the board, most agents are in the $50,000-$99,000 range.
If you want to learn more about how much agents make, please check out my New Agent Resources page.
Real Estate Commission Explained
Like most sales jobs, real estate agents are typically 100% commission-based. This means they are only paid when they sell (or rent) a property. But agents do not receive the full amount of the check. There are typically fees taken out by the brokerage first. Then what is left goes to the agent.
Below is an example of what a new agent could expect to receive from a $5,000 commission check.
Transaction Fee (~$250 - $500). Brokerage fee for you closing a sale under them, similar to those crazy fees you pay to attend a concert.
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Processing Fee (~$250 - $500). Brokerage fee for processing the required paperwork you must submit for their records.
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Commission split (~50%-60% for a first-year agent). The percentage your brokerage agrees to pay you (paid after all fees have been paid).
Fees and percentages will vary depending on the brokerage you work for, so make sure you understand everything before you sign the paperwork.
If you want to learn more about how real estate commissions work, check out the commission calculator on my New Agent Resources page.
Total (~$2,000 -$2,400).* The amount you would expect to see deposited into your bank account.
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*Note: Unlike as an employee, taxes are NOT taken out of commission checks.
Income Potential in Real Estate
Unlike being an employee, the income potential in real estate is limitless. You can earn as much as you want and are willing to work for.
One of the unique things about being a real estate agent is the opportunity to earn income in many different ways, outside of just when you sell a place.
Below are other ways you can earn income to help you achieve your goals quicker.
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Outbound agent referrals. If you have a client you are unable to help, you can refer them to an agent you know for a percentage of their commission.
Inbound agent referrals. On the flip side, agents can also refer their clients looking to buy or sell in your market to you for a percentage of your commission.
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Co-list properties. You could work with agents who need help selling a listing for a percentage of their commission or some other agreed-upon pay structure.
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Rentals. You can help people rent a place or list a place for rent.
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With real estate, your income is directly related to the effort you put in. Meaning the power to earn is in your hands and no one else’s!
When I left Corporate America, I had no idea what I wanted to do, but then I found being a real estate agent, and it changed my life forever. If you are looking for something that can change your life, check out my digital book Step Out of Line and learn how becoming an agent can help you create the life you want!