When considering a career in real estate, one of the first questions that comes to mind is: how much do real estate agents make? The answer isn’t always simple, as earnings can vary widely based on experience, location, market conditions, and even personal ambition. Unlike salaried jobs, real estate agents often work on commission, which makes their income both highly flexible and somewhat unpredictable.
In this article, we’ll break down the factors that influence real estate agent income, provide averages across the U.S., and share tips for maximizing earnings in this competitive industry.
The Basics: How Real Estate Agents Earn
Real estate agents typically earn money through commissions on the sale or lease of property. The standard commission on a home sale is around 5% to 6% of the final sale price. This fee is usually split between the buyer’s agent and the seller’s agent—and sometimes further divided with their respective brokerages.
For example, if a home sells for $400,000 and the total commission is 6%, that’s $24,000 in commission. If it’s split evenly between the buyer’s and seller’s agents, each side gets $12,000. Then, if the agent is working under a broker (as most are), they may only keep 60% to 80% of that, depending on their contract. That means the actual income per sale could be closer to $7,200 or $9,600.
So, How Much Do Real Estate Agents Make on Average?
According to the U.S. Bureau of Labor Statistics (BLS), the median annual salary for real estate agents in 2023 was approximately $52,030, while the top 10% earned over $112,410. However, these numbers don’t tell the whole story, because real estate income is often feast or famine.
Here’s a quick breakdown:
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New agents (0-2 years of experience): $20,000–$40,000/year
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Mid-level agents (3-5 years): $40,000–$80,000/year
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Experienced agents (5+ years): $80,000–$150,000+/year
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Top producers & luxury agents: $250,000–$1M+/year
It’s worth noting that part-time agents and those in smaller markets often earn significantly less, while those in high-demand cities (like New York, San Francisco, or Miami) can earn well above average.
Factors That Influence a Real Estate Agent’s Income
There’s no set salary for real estate agents, which means several factors determine how much they ultimately take home. Here are the biggest ones:
1. Location
Location is one of the most important factors. Agents in high-priced markets often earn more simply because property values are higher. A 3% commission on a $1 million home is vastly different from a 3% commission on a $150,000 home.
2. Experience and Reputation
New agents often struggle to get listings and clients. As an agent builds their network and reputation, they’re more likely to get repeat business, referrals, and higher-end clients.
3. Hours Worked
Because agents are essentially entrepreneurs, those who hustle harder often earn more. Agents working full-time (and then some) generally close more deals than those who treat it like a side gig.
4. Brokerage Commission Splits
Your agreement with your brokerage determines how much of each commission you keep. Newer agents might get a 50/50 split, while experienced agents could negotiate an 80/20 or even 90/10 split.
5. Marketing and Lead Generation
Successful agents invest in their business—buying leads, running ads, and staging homes. Those who are willing to spend to generate clients often see better returns.
Hidden Costs: What Cuts Into Income?
While the headline numbers can look attractive, it’s important to understand what real estate agents don’t keep:
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Brokerage fees
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Marketing expenses (ads, signs, websites, etc.)
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Continuing education and licensing fees
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Transportation and travel
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Taxes (since most agents are independent contractors)
After these expenses, take-home income can be significantly less than gross commission earnings.
How Can Real Estate Agents Make More Money?
If you’re asking not just how much do real estate agents make, but also how can they make more, consider these strategies:
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Niche down. Specializing in luxury homes, commercial property, or relocation services can open the door to higher-value transactions.
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Build a referral network. Past clients and other professionals (like mortgage brokers and attorneys) can be great sources of leads.
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Invest in professional development. Learning sales techniques, negotiation skills, and marketing strategies pays dividends.
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Work with a team or mentor. Joining a real estate team can accelerate growth and provide leads and support early in your career.
Final Thoughts: Is It Worth It?
Real estate offers a unique blend of independence and income potential. While the first few years can be challenging, agents who stay committed, learn the craft, and continuously market themselves can earn a very comfortable living.
So, how much do real estate agents make? The answer is: it depends—on effort, location, experience, and business savvy. But for those who are determined and willing to put in the work, the rewards can be substantial.
