Key Takeaways
- Realtor agents typically earn income through commission-based sales, not fixed salaries.
- The average annual income for a realtor in the U.S. ranges from $50,000 to $110,000, depending on experience, location, and number of transactions.
- Earnings vary widely based on commission splits, brokerage fees, and market conditions.
- Successful agents often supplement their income with referral fees, bonuses, and property management services.
- New agents may earn less during their first few years as they build a client base and gain experience.
- Real estate income can be unpredictable, but with strategic planning and effective marketing, it can be highly rewarding.
Introduction: Understanding Realtor Earnings
When people ask, “How much do realtor agents make?” the answer isn’t straightforward. Real estate agents, including those who are Realtors (members of the National Association of Realtors, or NAR), typically earn through commission rather than a fixed salary. Their income depends on the number and value of properties sold, how commissions are split with brokers, and how well they perform over time.
This article outlines the different income models, industry averages, and variables that affect how much realtor agents can realistically earn.
Commission Structure: The Foundation of Realtor Income
How Real Estate Commissions Work
Most real estate agents earn money through commissions on completed sales. In a standard residential real estate transaction, the total commission is usually between 5% and 6% of the sale price. This commission is often split four ways:
- Listing agent
- Listing broker
- Buyer’s agent
- Buyer’s broker
For example, on a $400,000 home with a 6% commission:
- Total commission = $24,000
- Split between both sides = $12,000 each
- Agent-broker split (commonly 60/40 or 70/30) means the agent may walk away with $7,200 or less per side.
These numbers can vary based on broker policies, negotiation, and the agent’s experience.
Average Earnings: What Realtors Typically Make
National Income Averages
According to data from the U.S. Bureau of Labor Statistics (BLS) and the National Association of Realtors (NAR):
- Median income for real estate agents (2023): $56,000 – $66,000/year
- Top 10% earners: Over $120,000/year
- Bottom 10% earners: Below $30,000/year
These figures reflect gross income and don’t account for self-employment taxes, fees, or expenses, which can significantly reduce take-home pay.
Income by Experience Level
| Experience | Estimated Annual Income |
| First Year | $25,000 – $40,000 |
| 1–3 Years | $45,000 – $60,000 |
| 3–5 Years | $65,000 – $90,000 |
| 5+ Years | $100,000+ |
Income by Location
Real estate income varies significantly by geographic market:
- High-cost areas (e.g., New York, San Francisco): Higher commissions but also higher expenses.
- Mid-tier markets (e.g., Dallas, Atlanta): More transactions and consistent turnover.
- Small towns/rural areas: Lower sales prices and fewer transactions.
Market activity, property prices, and demand heavily influence how much a realtor can make annually.
Other Factors That Affect Realtor Income
Commission Splits With Brokerages
New agents often work under brokerages with higher commission splits (e.g., 50/50), while seasoned agents may negotiate better terms (e.g., 80/20 or 90/10). Some agents pay flat fees per transaction instead of commission splits, depending on the brokerage model.
Business Expenses
Real estate agents are independent contractors, which means they cover their own expenses, including:
- MLS access fees
- Marketing and advertising
- Continuing education
- Licensing renewal fees
- Transportation and office supplies
On average, agents may spend $5,000–$15,000 per year on business expenses.
Number of Transactions
Income is largely tied to how many properties an agent sells annually. A full-time agent might close 10 to 20 transactions per year, depending on market conditions and individual effort.
Income Sources Beyond Commission
Referral Fees
Realtors can earn referral fees by connecting clients with agents in other markets. These fees typically range from 20% to 30% of the commission received by the other agent.
Property Management and Leasing
Some agents earn additional income by:
- Managing rental properties
- Assisting with lease agreements
- Collecting management fees (usually 8%–10% of monthly rent)
Bonuses and Incentives
Builders and developers may offer bonuses for selling new construction homes. While less common, these incentives can add several thousand dollars to an agent’s annual earnings.
How New Realtors Build Their Income
Initial Challenges
Most new real estate agents don’t earn much during their first 12 to 18 months. Challenges include:
- Limited network
- Learning the transaction process
- Finding consistent leads
It takes time to build name recognition and trust in local markets.
Ways to Grow Income Over Time
- Specialize in a niche like luxury homes or first-time buyers
- Use online lead generation tools and CRM platforms
- Invest in branding, including websites and social media
- Build a referral network through past clients and local professionals
Agents who treat real estate like a long-term business often see a steady increase in income by their third or fourth year.
Real Estate Broker vs. Realtor Agent: Income Differences
Who Earns More?
Real estate brokers often earn more than agents because they can:
- Collect a portion of commissions from agents under them
- Operate independently or run their own brokerages
- Earn commissions directly from both buying and selling sides
However, becoming a broker involves more licensing requirements, education, and responsibility.
Is Being a Realtor Worth It Financially?
Pros
- Flexible schedule
- Unlimited earning potential
- Opportunities for growth
Cons
- Income inconsistency
- No base salary
- High upfront costs
Agents who approach real estate with discipline and strategic marketing tend to outperform those who treat it as a part-time or short-term gig.
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Final Thoughts
So, how much do realtor agents make? It depends on several factors: the number of homes sold, average sale prices in the area, commission splits, and how effectively the agent runs their business. While some earn six figures, others may struggle in their first year or two. But with time, effort, and the right approach, real estate can become a profitable and sustainable career.
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5 Frequently Asked Questions (FAQs)
1. How do realtor agents get paid?
Realtor agents typically earn money through commissions on property sales, usually a percentage of the home’s selling price, rather than a fixed salary.
2. What is the average annual income for a real estate agent in the U.S.?
Most real estate agents earn between $50,000 and $110,000 per year, depending on experience, location, and the number of transactions they complete annually.
3. How much do new real estate agents usually make?
New agents often earn between $25,000 and $40,000 in their first year while they build their client base and gain experience in the market.
4. What percentage do realtors take from a home sale?
The total commission on a home sale typically ranges from 5% to 6% of the sale price. This amount is split between the listing agent, buyer’s agent, and their respective brokers.
5. Can a realtor make six figures?
Yes, experienced full-time realtors in active or high-value markets can earn over $100,000 annually, especially if they close a high number of sales or large transactions.
