How much do real estate agents make? In general, real estate agents earn a salary of $26,000 or more, but in the Big Apple the income is even higher. In Manhattan, for instance, sales commissions are extremely high, and it can be even higher if the agent sells a luxury property for millions of dollars. But if you want a more stable income, a salary with little or no commission may be better for you.
The commission amount a real estate agent earns depends on the price of the property they sell. Typically, agents earn 5% to 6% of the sale price, split 50/50 with their buyers’ agent. This commission amount is deducted from the sale proceeds at closing. Some real estate agents are paid on a commission-only basis, while others earn a base salary plus bonuses. To calculate how much an agent makes, first calculate the average selling price for a home in your area.
Real estate agents also make commissions by splitting a portion of the commission with their brokers. While most real estate commissions are negotiable, a successful agent may earn a higher percentage. In some cases, the commission may be as low as 1.25% or even lower, depending on the market and the type of sale. For example, a $1 million sale may yield a $60,000 fee for both the buyer and the seller, with each agent receiving $15,000 in commissions.
While a few real estate agents may be the most famous in the industry and earn millions of dollars a year, the majority of agents earn well below this level. A real estate agent who sells a single home every month would make an average of $112,610 annually. On the other hand, some agents earn as much as $500,000 a year, which may sound like a dream salary but is not quite possible for most of us.
However, the truth is that the average real estate agent does not get paid until the home is sold. That means that each dollar of their commission comes out of the pocket of the home buyer or seller. Consequently, it’s very frustrating to work so hard and not see a result. Nevertheless, most agents don’t earn their commissions, and their hard work is often unrewarding. So it’s important to find ways to minimize these costs.
While the average agent makes $75,000 per year, dedicated agents can earn up to $150,000 a year. Typically, agents need to close at least one transaction a month to make this income, so it’s important to save some money to support yourself. A month’s salary could reach $31,250 if five agents were to close a deal each. If you’re working two or three transactions a month, your income could rise to $150,000 a year.
A real estate agent earns a salary proportional to their experience, training, and MLS membership fees. In addition to their pay, agents must also consider their overhead expenses, including lock boxes, marketing signs, business cards, and other advertising. These expenses are not covered by the salary, but they are expected as a part of the job. Furthermore, real estate agents have to engage with the community to succeed and build lasting relationships.
