Category Archives: Real Estate Agent

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The Value of a Deal: What is a Normal Real Estate Agent Salary?

There is a lot of allure for people looking to enter into the real estate industry as a real estate agent. The prospect of helping people find the home of their dreams where they can raise a family and live a happy life is something many people are drawn to. Let's discuss about the real estate agent salary on this article.

Real estate agents also tend to make their own hours and manage their own schedules to suit the needs of their clients. But, most importantly, what does a real estate agent salary look like? Is the flexibility and rewarding parts of the job worth the money?

It’s also worth considering the additional factors that could affect a real estate agent salary. What kind of details separate the average earners from the top earners in the industry?

In this article we will shed some light on the real estate industry and help give you a better understanding of the details and factors that play a role in how much real estate agents can earn.

The Types of Real Estate Agents

There are two distinct types of real estate agents. While the basics of their job may be similar, the details make these two jobs very different.

The first and most common type of real estate agent you will encounter is a residential real estate agent. Perhaps you have even interacted with a real estate agent in the course of buying or selling your own home.

Residential real estate agents often work for large brokerages and help facilitate real estate transactions between buyers and sellers. There is a very rewarding aspect of being a residential real estate agent as these agents can help buyers find the home of their dreams and help sellers get the best offer for their home.

While selling a home may seem like a single job it is anything but. Successful real estate agents are also knowledgeable about marketing, customer service, and the legal process that goes into a real estate transaction.

The other type of real estate agent is a commercial real estate agent. These agents don’t work with individual clients but, instead, help businesses find properties to buy or lease. The value of these deals can be much higher than residential transactions but deals are often few and far between.

Commercial real estate agents also usually work for brokerages just like residential real estate agents. In many cases, commercial agents will partner with landlords or developers to help sell or lease business properties.

While commercial real estate agents do not help people find the home of their dreams where they can raise a family, they do help businesses find the perfect location that can help them grow well into the future. Both scenarios are incredibly rewarding, just in different ways.

Factors That Make Up A Real Estate Agent Salary

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In addition to the types of properties that real estate agents deal with, there are some other factors that play a major role in determining salary.

One of the main factors that determine how much a real estate agent can earn is licensing. Each state has their own unique licensing requirements and, within those requirements, there may be additional courses or certifications needed to take on certain roles.

For example, one can become a real estate agent in many states after completing a basic course. In other states, like Alaska for example, there are differing requirements for people who want to be real estate brokers, associates, and salespeople.

Licensing Requirements

The licensing requirements in your state may determine the types of deals you can complete and, in turn, the amount of money you can earn. If you have a specific type of real estate career in mind then you should pay careful attention to the licensing needed to carry out that role.

Where you live can also play a major role in how much money you earn as a real estate agent. Hot real estate markets with a high number of transactions will often lead to higher earnings when compared with cooler markets.

The amount of competition among other real estate agents and brokerages in the area could also determine your earning potential. A region with a lot of real estate agents competing for business may make it more difficult for new agents to break into the market and earn money.

As you can see, there are a lot of moving parts that go into a real estate agent’s earning potential. Where you live, the health of the real estate market, the amount of competition, and even which brokerage you work with could all play role in determining how much money you make.

What Actually Makes Up
A Real Estate Agent Salary?

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Simply searching online for a real estate agent salary will bring up a wide range of results. The median real estate agent earnings in the United States comes out to around $40,000 per year. Of course, this does not tell the full story.

Real estate agents have a lot of control over how much they earn. This is because the typical real estate agent does not earn a salary in the traditional sense. Instead, most real estate agents are paid a commission by their brokerage for the deals they have helped work on.

When a property is sold there is usually a buying and selling real estate agent involved. The amount of commission is usually set by the selling real estate agent’s brokerage. A standard commission on the sale of a home is 5% which is usually split between the selling and buying real estate agent’s brokerages.


From that commission, the brokerages take their cut. This can vary from brokerage to brokerage but usually amounts to about 40%. That means the individual real estate agent takes home 60% of their split from the sale before taxes and other expenses.

The number of sales and the value of the homes in the area can play a very large role in determining a real estate agent’s income. What makes a top performing real estate agent can depend on the area, the value of the homes being sold, and the brokerage that sets the definition for top performers.

Using the numbers provided above, someone who sells a single house worth $1 million will earn as much as someone who sells 5 houses worth $200,000 each. Increase the volume of homes being sold by real estate agent number 1 and they will have earned much more than real estate agent number 2 despite having sold fewer homes.

There are also other ways for real estate agents to earn money. Some agents work for brokerages that offer discounted commission rates that promise to save sellers anywhere from 1% to 3% on their transaction. In these cases, real estate agents stand to make less per sale than their counterparts that work for a full commission.

In addition to real estate agents that earn a reduced commission, there are also agents that work for a fixed, flat rate fee. This is less common but the practice has been growing in the United States and Canada in recent years. The appeal of flat fee real estate agents is the certainty provided to sellers as the commission they have to pay does not fluctuate based on the sale price.

Ready to Sell Some Property?

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If you are interested in becoming a real estate agent then there is a lot of potential to earn a significant income. Top performing real estate agents can earn well into the six figures.

Of course, there are a number of factors that need to be considered when determining real estate agent income. The cost of houses in the market, the number of houses sold per year, and the brokerage rules can all have a major impact.

Real estate agents are often also responsible for a large number of the costs associated with their work. Transportation, marketing costs, and other expenses may have to be paid directly out of pocket and should also be factored in when looking at income. The good news is that many brokerages will provide some assistance with expenses and other expenses can often be written off on your final tax submission.

For some, the prospect of only earning a commission based on sales is daunting. For others, it means that their hard work will be rewarded handsomely. If you fall into that second category then the idea of selling real estate may be very exciting.

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