One important question you may have if you’re looking to get into the real estate industry in Montana is, “How much does a real estate agent make in Montana?”

While real estate agents’ income can vary, several factors play a role. For example, an agent’s experience, sales performance, and location within the state — along with market conditions — can all influence their individual earnings.

This article will help you understand the average real estate agent salary in Montana, including the role commissions and business expenses play in shaping a real estate agent’s earnings.

Real Estate Agent Salary Montana

Several factors can impact a real estate agent’s salary in Montana, such as:

• Experience: The average salary of real estate agents in Montana is $83,480 per year. As an agent gains more experience and skills, they likely can earn even more
• Location: Real estate prices and market activity can vary greatly from one place to another — even within the same state. Real estate agents working in a site with higher property prices or greater sales activity (e.g., booming towns or cities) can earn more than those working in areas with lower property values or less activity
• Transaction Volume: The more properties an agent successfully helps their clients buy or sell, the more they earn. This will, of course, depend on the demand in the market as well as the agent’s ability to secure clients and close deals efficiently
• Economic Conditions: During a housing boom, agents might earn more due to increased sales and higher property prices. Conversely, agents may see their earnings decrease during an economic downturn or recession
• Work Hours: A real estate career often requires working outside typical business hours, including on evenings and weekends. Agents who put in more hours may have the opportunity to close more deals and thus earn more

Because real estate agents often are self-employed, their income can fluctuate significantly and they must budget for costs like marketing, licensing, and continuing education.

Understanding Commissions

A real estate agent’s income comes from commissions — a percentage of a property’s sale price. The buyer’s agent and the seller’s agent (listing agent) often split this percentage equally, and it usually ranges from 5% to 6%.

If a house in Montana sells for $300,000 with a commission rate of 6%, for example, the commission would total $18,000. If the buyer’s and seller’s agents then split this commission equally, each would receive $9,000.

Real estate agents often work under brokerage companies and must share a portion of their commission with them. The split between an agent and their broker can vary widely. New agents might have a 50-50 split agreement while experienced agents might negotiate a 70-30 or even a 90-10 split.

If an agent in the example above has a 70-30 split with their broker, they’d keep $6,300 of the $9,000 commission (70%) while their broker would get the remaining $2,700 (30%).

These numbers can vary, depending on the specifics of the deal, the agents involved, and the brokerage company’s policies. Note that the seller — not the buyer — usually pays the commission.

Variable Expenses

As a real estate agent, you’ll have to deduct several work-related expenses from your gross income to determine your overall net salary. Here are some of the key costs agents encounter:

• Licensing Fees: Agents must initially pay to obtain a real estate license, which often involves taking pre-licensing education courses and the licensing exam itself. They also must pay fees associated with the periodic renewal of their license
• Association Dues: Many agents are members of local, state, and national realtor associations like the National Association of Realtors (NAR) or Clever Real Estate listings. These memberships come with annual dues
• Marketing and Advertising Costs: This can include costs related to developing and hosting a website, professional photography for listings, virtual tour services, signage, print advertising, online advertising (e.g., on social media platforms or real estate portals), and more
• Office Expenses: If an agent chooses to maintain an office outside their brokerage company (or if their broker charges desk fees), they could incur costs related to rent, utilities, and office supplies
• Technology Costs: Many agents use specialized software to help them with customer relationship management (CRM), transaction management, and more. They also may have costs related to maintaining their computer equipment, smartphones, and other technology

Each of these expenses will vary, depending on a range of factors, and agents can deduct some from their taxes. It’s essential for real estate sales agents to manage these costs effectively and to budget accordingly.

How to Become a Real Estate Agent in Montana

Becoming a real estate agent in Montana involves a series of steps determined by the Montana Board of Realty Regulation. The process is quite similar to that of many other states, and includes the following steps:

1. Complete pre-licensing education. First, you need to complete a 60-hour, pre-licensing education course that includes real estate classes approved by the Montana Board of Realty Regulation.
2. Pass the licensing exam. After completing your pre-licensing coursework, you must pass the Montana real estate salesperson exam. It’ll test your knowledge of real estate principles and Montana state laws.
3. Submit your application. Once you pass the licensing exam, you can submit your license application to the Montana Board of Realty Regulation. You’ll also need to pay a license application fee.
4. Secure sponsorship from a broker. In Montana, as in most states, newly licensed real estate agents must work under the supervision of a licensed broker.
5. Complete post-licensing education. After you receive your license, you’ll need to complete a 12-hour, post-licensing course within 120 days.

Obtaining a real estate license in Montana will allow you to earn commissions from helping clients buy and sell properties. It also gives you an opportunity to pursue a potentially lucrative career.