How Much Do Real Estate Agents Make and How to be Successful At It
If you’re considering starting a new career as a real estate agent, you’re probably wondering, “How much do real estate agents make?”
Real estate agents don’t receive a base salary. Instead, real estate agents earn money when they sell a real estate property, such as a house, and receive a commission for it. The commission is a percentage of the property’s purchase price, which the seller pays for.
How Do Real Estate Agents Get Paid?
When Do Real Estate Agents Get Paid?
Real estate agents only get paid when a seller transfers their property ownership to the buyer. Real estate professionals refer to this transaction as closing. This closing day usually includes the lender, the title company, and the real estate agent.
How Much Do Real Estate Agents Make?
The average real estate wage for real estate agents ranges from $42,000 to $49,000 annually, according to the following reports:
- The U.S. of Labor Statistics shows that the median annual wage for real estate agents is $48,930 (May 2019). - Salary.com reported a lower median yearly salary of $42,821 (December 2020). - The National Association of REALTORS (NAR) reported a gross median income earned from real estate activities of $49,700 (2019).
Out-of-Pocket Expenses
Although a real estate agent technically works for a brokerage, they operate like contractors or small business owners. Several expenses can chip away at their commission check. A broker may be willing to help their agent with costs, but ultimately it’s the agent’s responsibility.
Factors That Can Improve A Real Estate Agent’s Income
Real estate agents make money when a property sells. However, certain factors can help increase an agent’s income above the average salary.
Experience
Although a 6% commission rate is the average, some real estate agents charge a higher commission on the listing agreement due to their experience. However, more years of service doesn’t necessarily guarantee someone is the best real estate agent.
Property Type
Agents that expand their clientele outside homeowners can also increase their take-home pay. Real estate agents can make a lot more money selling commercial real estate than residential real estate, mainly because commercial properties have a significantly greater purchase price.
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