Real estate is a thriving industry that offers exciting job opportunities for those seeking a career focused on helping clients sell and buy properties.
One common question that arises when people consider a career as a real estate agent is, “How much money can I make per sale?” While a real estate agent’s earnings can vary based on a variety of factors, this article will give you a general idea of their income potential per sale.
How Much Money Do Real Estate Agents Make Per Sale?
Because real estate agents have a commission-based income, they receive a percentage of a property’s total sale price — usually 5% to 6%. That means they don’t have a fixed salary. Moreover, numerous factors can come into play and an agent’s commission rate can fluctuate over time.
Read on to learn how much money an agent can earn per year, per week, and per hour.
How Much Does a Real Estate Agent Make Per Year?
According to a 2022 report from the US Bureau of Labor Statistics, the national median income for agents was $49,980 per year. Half of all agents earned more than this amount while the other half earned less. The top 10% of agents surpassed an annual income of $113,320.
While their income can change over time, most real estate agents can work toward a six-figure, annual income. They can achieve this either by dealing with high-value real estate transactions or working in niche markets like luxury real estate and commercial properties.
To learn more, read our How Much Does a Real Estate Agent Make Per Year article.
How Much Does a Real Estate Agent Make Per Week?
You can estimate how much the average real estate agent can earn in a week by dividing the median annual wage (based on the information above) by the number of weeks in a year.
Assuming an agent works a standard 52-week year, they’d take $49,980 divided by 52 weeks to get an average weekly income of approximately $961.15. However, the median annual wage represents the midpoint of agent earnings nationwide. That means half of agents earn more than this amount while the other half earn less.
For more information, check out our How Much Does a Real Estate Agent Make Per Week article.
How Much Does a Real Estate Agent Make Per Hour?
Real estate agents often have flexible schedules and may work varying hours based on client needs and market demands. If we assume a standard, 40-hour workweek and the median annual wage of $49,980, the estimated hourly salary would be $24.02.
While agents may work eight hours a day at times, they often have irregular work hours that may include evenings, weekends, and additional hours. As such, their earnings will vary on a daily basis.
For more information, see our How Much Does a Real Estate Agent Make Per Hour article.
Factors Influencing Real Estate Agent Earnings
Several factors may influence real estate agent salaries, including, but not limited to, local real estate market conditions as well as an agent’s experience, reputation, location, specialization, sales volume, and work hours.
However, two factors play a significant role in determining a real estate agent’s salary: their commission structure and variable expenses.
The commission structure for real estate agents typically involves a percentage of a property’s final sale price.
Let’s consider an example where a listing agreement includes a commission rate set at 6%. In a typical transaction, the seller’s agent and the buyer’s agent would each receive a portion of this commission. If the house in this example listing sells for $300,000, the commission would total $18,000. The seller’s and buyer’s agents would then split this amount so each receives their respective shares. Assuming a 50-50 split, both agents would make $9,000.
Because most agents work under real estate brokers, they must then share their commission earnings with them based on a split agreement. If one of the agents in this scenario has a 70-30 split agreement, they’d keep $6,300 while their broker would get the remaining $2,700.
Commission rates aren’t fixed and can vary based on factors like market conditions, location, property type, and negotiations between an agent and their brokerage company.
While fixed expenses (e.g., office rent and supplies, taxes, and insurance) remain relatively stable, other variable expenses can play a significant role in determining an agent’s overall financial success. Some common variable expenses include:
- Licensing Fees: Most states require agents to complete continuing education (CE) courses in order to maintain and renew their license. This usually comes with class fees.
- Marketing Costs: Agents need to allocate a reasonable budget for marketing initiatives in order to help them attract potential clients and secure new listings. These costs may include online advertising, print media postings, social media campaigns, and signage.
- Technology Tools: This expense category encompasses software subscriptions, customer relationship management (CRM) tools, website maintenance, and virtual tour platforms.
- Professional Membership Dues: Most agents choose to join professional associations like the National Association of Realtors (NAR) or local real estate listing boards. These memberships come with annual or periodic dues that can vary based on an agent’s decision to join or renew their membership.
Understanding your variable expenses as a real estate agent is vital for budgeting, financial planning, and tax purposes. This’ll help you maximize your profitability and ensure the sustainability of your career.
How to Become a Real Estate Agent
To become a real estate agent, you must first obtain a real estate license. Here are the common steps you must take in this process:
- Complete pre-licensing education. Start by researching and enrolling in a pre-licensing education course approved by your state’s real estate commission or similar regulatory authority. These courses cover essential topics, such as real estate principles, contracts, property management, and legal requirements.
- Pass the state licensing exam. After completing the required pre-licensing education, you’ll need to pass the state licensing exam. This exam evaluates your understanding of real estate regulations, ethics, and best practices as well as state property laws. (Note: There are no national real estate laws, just state laws that govern real estate transactions).
- Undergo a fingerprint-based background check. Many states require real estate license applicants to submit their fingerprints and undergo a background check. This step ensures applicants have no criminal history that could affect their ability to practice real estate in a responsible and ethical manner.
- Find a sponsoring broker. Agents typically work under the supervision of a licensed real estate broker. Research and connect with various brokerage companies to find one that suits your needs and aligns with your career goals.
- Submit your license application. After you pass the licensing exam and secure a sponsoring broker, you can complete and submit your real estate license application to the appropriate real estate commission or similar authority in your state. You also must pay any necessary fees associated with the application process.
- Complete post-licensing education. Some states require newly licensed real estate agents to complete post-licensing education within a specified timeframe. This education typically consists of additional coursework designed to provide practical knowledge and skills to help agents succeed in their careers.
Becoming a real estate agent requires dedication, education, and compliance with state regulations. By following these steps, you’ll be well on your way to launching a successful career in real estate, making sales, and earning commissions.
For real estate pre-licensing education classes, StateRequirement recommends:
Alternatively, check out our state-specific Real Estate Salesperson Licensing page.
How Much Does a Real Estate Agent Make Per Sale FAQ
How do real estate agents get paid?
Agents earn commissions as a percentage of a property’s sale price. Real estate agent commissions then get split between the listing agent (also called a seller’s agent) and the buyer’s agent. To learn more, visit our Real Estate Agent Salary page.
How much do real estate agents make in commission?
An agent’s specific commission rate can vary based on factors like market conditions, their location, and individual negotiations. However, it’s typically around 5% to 6% of a property’s sale price. The listing and buyer’s agents usually split the total commission between themselves.
For more information, check out our How Much Commission Does a Real Estate Agent Make article.
How much do real estate agents make per month?
To calculate an agent’s estimated monthly earnings, you can divide the median annual wage of $49,980 by 12 (months). The approximate monthly figure totals $4,165. This is a rough estimate, though, and individual earnings can vary based on factors like commission rates, transaction volume, experience, and market conditions.
Do real estate agents get paid if they don’t sell?
In most cases, real estate agents only earn money when they close a transaction. If they don’t make any sales, they don’t make money unless they choose to work with a brokerage company that pays them an annual salary and bonuses instead of having them work on commission.