If you are interested in being a real estate agent, one of the first things you probably want to know is how much real estate agents (salesperson) make. The answer is not quite so simple as being a real estate salesperson is a full commission job. A lot of what you make depends on the area you serve, the real estate market, and your clientele, among other factors. However, here are some statistics I have gather about how much real estate agents make. I should remind you that this is an average, and how much you make depends largely on you. That is the cool thing about being a real estate agent—your income depends largely on how much you want to make.
According to Salary.com, agents in the 25% range average $36,137 a year and agents in 75% range make $47, 052. That means 25% of real estate agents make at least $47,052 a year. The other 75% of real estate agents make $36,137 or less. Also according to Salary.com, the medium salary for a real estate agent in the United States is $39,991. However, as late as May 2010, The Bureau Of Labor Statistics stated that the average real estate agent salary was $52,490. Remember, the average salary may be skewed by real estate agents who make six or seven figures a year.
According to the BLS, there are just over 393,000 real estate salespeople in the United States. It is a very competitive field and many agents have due to the real estate crash. However, if you have what it takes to be a real estate agent, you can make a lot of money once the real estate market picks up a little bit.
How Real Estate Agents Are Paid
Real estate agents are paid by their brokerage. When a house is sold, the seller will pay the brokerage of the listing agent a portion of the sale. The portion of the sale is usually 5-8%. The listing brokerage firm will then split that 5-8% with the buyer brokerage firm evenly. Once both brokerages receive their money, they will then pay their real estate agents a portion of the fees. So from a sale of $200,000 house, each agent might gross $3,000-$4,000 from the sale after the brokerages have taken their portion.
Correlation Between Real Estate Agent Pay And Clientele Location
Remember, a lot of a real estate agent’s pay is based upon his clientele and where they live. For instance, the average real estate agent makes $56,000 a year according to SimplyHired.com. However, based upon the same site, a real estate agent in Topeka (Kansas) makes just $38,000 a year. So an agent in San Francisco makes more because the price of housing there costs more. The agent in San Francisco has to sell only a portion of the houses that the real estate agent in Topeka has to sell in order to obtain the same earnings. However, you should be aware that the level of competition for real estate agents in San Francisco is much stiffer and the cost of living higher. So if you do plan on serving clientele and living in a high cost-of-living area such as San Francisco, you should plan on making more than $56,000.