• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

The College Investor

Student Loans, Investing, Building Wealth

  • About
  • Podcast
  • Research
  • Contact
  • Save For College
      • How To Start

      • How To Save For College
      • How To Pay For College
      • What Is the Average Cost of College?
      • What Is A 529 Plan and Where to Open One in Your State
      • How Much Should You Have In A 529 Plan By Age
      • How To Use A 529 Plan For Private Elementary And High School
      • What Are Qualified Expenses For A 529 Plan (And What Doesn’t Count)?
      • The Best Brokers To Open A 529 Plan
      • Tools + Accounts

      • 529 Plans: The Ultimate College Savings Plan
      • 529 Plan Contribution Limits
      • Prepaid Tuition Plans | What To Know
      • Understanding And Using 529A ABLE Accounts
      • Using A Roth IRA To Save And Pay For College
      • FAFSA Deadlines for Financial Aid
      • CollegeBacker Review
      • Upromise Review
      • UNest Review
      • Other Options

      • Student Loan And Financial Aid Programs By State
      • The Guide To Military And VA Education Benefits
      • How To Fill Out The FAFSA
      • How To Find College Scholarships
      • The Best College Scholarship Search Websites
      • How To Find Grants To Pay For College
      • Pell Grants: What They Are And How To Qualify
      • Understanding Federal Work-Study
      • How To Use A 529 Plan If Your Child Doesn’t Go To College
  • Student Loans
      • Borrowing

        • How Student Loans Work
        • How To Apply For A Student Loan
        • Best Student Loans And Rates In January 2023
        • 10 Best Private Student Loans Of January 2023
        • Best Student Loans To Pay For Graduate School
        • Best Student Loans To Pay For Medical School
        • Parent Loans To Pay For College
        • No-Cosigner Student Loan Options
        • Guide To Income Sharing Agreements (ISAs)
        • Best International Student Loans
      • Get Out Of Debt

        • Best Student Loan Refinance Companies In January 2023
        • Best Student Loan Repayment Plans
        • Best Student Loan Refinancing Bonuses And Promotional Offers Of January 2023
        • Student Loan Forgiveness Programs (The Complete List)
        • The Full List Of Student Loan Forgiveness Programs By State
        • Public Service Loan Forgiveness (PSLF)
        • Top Student Loan Scams
        • Average Student Loan Monthly Payment
        • Average Student Loan Debt By Year
      • Reviews

        • Credible Review
        • Splash Review
        • Ascent Review
        • Citizens Bank Review
        • Commonbond Review
        • Earnest Review
        • ELFI Review
        • Laurel Road Review
        • LendKey Review
        • SoFi Review
  • Investing
      • How To Start

        • How To Start Investing in High School
        • How To Start Investing In College
        • How To Start Investing In Your Twenties For 22 – 29 Year Olds
        • How To Start Investing In Your 30s For 30 – 39 Year Olds
        • How To Start Investing With $100 Or Less
        • How To Give Kids The Gift Of Stock
        • What Is Dividend Growth Investing
        • IRA Rollover Chart
      • Tools + Accounts

        • Best Online Stock Brokers
        • The Best Traditional And Roth IRA Accounts
        • The Best Robo-Advisors
        • The Best Investing Apps
        • The Best Places to Trade Options
        • The Best Places To Open A Health Savings Account
        • The Best Solo 401k Providers
        • The Best Self-Directed IRA Providers Of 2023
        • Best Cryptocurrency Exchanges
      • Reviews

        • Vanguard Review
        • Fidelity Review 2023
        • M1 Finance Review
        • TD Ameritrade Review 2023
        • Charles Schwab Review
        • Robinhood Review
        • Webull Review
        • Betterment Review 2023
        • Wealthfront Review
  • Earn More Money
      • Extra Income

        • 20 Best Side Hustles You Can Start Earning With In 2023
        • 53 Side Hustle Ideas To Make Money Fast
        • 100 Ways To Make Money In College
        • 80 Ways To Make Money From Home In 2023
        • 5 Quick Money Making Ideas (That Take Less Than 1 Hour)
        • 10 Interesting Ways You Can Make Money Driving
        • High-Paying Side Gigs That Earn $1,000 or More Per Month
        • The 10 Best Money-Making Apps
        • Paid Surveys: Earn Money For Giving Your Opinion Online
        • 10 Crazy Ways To Make $10,000 You’ve Never Heard Of
      • Build Wealth

        • 40 Passive Income Ideas You Can Use To Build Wealth In 2023
        • 3 Ways To Make $50,000 Per Year Without Working With Passive Income
        • How To Become A Real Estate Investor With Just $500
        • 15 Best Online Business Ideas
        • Residual Income: 7 Super Smart Ways to Build It
        • The Most Common Multiple Income Streams
        • How To Become A Real Estate Mogul With Only $10,000
      • Reviews

        • Fundrise Review
        • RealtyMogul Review
        • FarmTogether Review
        • AcreTrader Review
        • Swagbucks Review
        • Survey Junkie Review
        • TopCashback Review
        • DoorDash Review
  • Personal Finance
      • Banking

        • 10 Best High Yield Savings Accounts Of January 2023
        • 10 Best Money Market Accounts Of January 2023
        • 10 Best Free Checking Accounts In January 2023
        • Best Bank CD Rates Of January 2023
        • 10 Best Business Checking Accounts In February 2023
        • Best Online Banks Of January 2023
        • Best Credit Unions Nationwide Of January 2023
        • Best College Student Checking Accounts Of January 2023
      • Insurance

        • Best Life Insurance Companies
        • Renters Insurance
        • Car Insurance
        • Pet Insurance
        • Umbrella Insurance
        • Disability Insurance
        • Tuition Insurance
        • Travel Insurance
      • Credit Tools

        • Best Budgeting Apps
        • Cash Advance Apps
        • How To Get A Free Credit Score Report
        • Best Credit Monitoring Services For 2023
        • Debt Settlement: Inside The Secret World
        • Credit Repair Explained: Should You Pay For Help?
        • Best Personal Loan Companies And Lenders
        • Online Loan Companies To Borrow From Home
      • Tax

        • Best Tax Software
        • Free Tax Software
        • IRS Tax Refund Calendar
        • Common IRS Questions and Errors
        • Federal Tax Brackets
        • Capital Gains Tax Brackets
        • 401k Contribution Limits
        • IRA Contribution Limits
        • HSA Contribution Limits
  • Forum
  • Search
Home » Earn » Employment and Education » How Much Money Do Real Estate Agents Make Each Year?

How Much Money Do Real Estate Agents Make Each Year?

Updated: July 20, 2022 By Robert Farrington

Tweet
Share63
Share
Pin32
Email
Print

At The College Investor, we want to help you navigate your finances. To do this, many or all of the products featured here may be from our partners. This doesn’t influence our evaluations or reviews. Our opinions are our own. Any investing information provided on this page is for educational purposes only. The College Investor does not offer investment advisor or brokerage services, nor does it recommend buying or selling particular stocks, securities, or other investments. Learn more here.Advertiser Disclosure

There are thousands of financial products and services out there, and we believe in helping you understand which is best for you, how it works, and will it actually help you achieve your financial goals. We're proud of our content and guidance, and the information we provide is objective, independent, and free.

But we do have to make money to pay our team and keep this website running! Our partners compensate us. TheCollegeInvestor.com has an advertising relationship with some or all of the offers included on this page, which may impact how, where, and in what order products and services may appear. The College Investor does not include all companies or offers available in the marketplace. And our partners can never pay us to guarantee favorable reviews (or even pay for a review of their product to begin with).

For more information and a complete list of our advertising partners, please check out our full Advertising Disclosure. TheCollegeInvestor.com strives to keep its information accurate and up to date. The information in our reviews could be different from what you find when visiting a financial institution, service provider or a specific product's website. All products and services are presented without warranty.

how much do real estate agents make

Looking for a job with high paying potential? Becoming a real estate agent is one way you can earn a six-figure income, even if you don’t have a college degree.

However, many people earn less than six figures, and most even quit their work as a real estate agent before they earn their first commission.

How much can you earn as a real estate agent? We explore the income potential for real estate agents in this article.

Table of Contents
How Much Can You Earn as a Real Estate Agent?
What Does It Take to Be Successful as a Real Estate Agent?
How Quickly Can You Generate Your First Commission?
Warning: You Need a License
Final Thoughts

How Much Can You Earn as a Real Estate Agent?

The vast majority of real estate agents are commission-based agents. That means that they earn most (or all) of their income when they sell (or help buy) a house. Generally speaking, when a person sells a house with the help of a real estate agent, the seller pays a 5-6% commission on the sales price of the home. The commission is then split between the selling agent and the buying agent. A common arrangement is for each side to earn a 3% commission. When selling a house for $250,000, each agent can expect to earn $7,500.

Of course, the commission may be split among more than just the buyer and seller. Then, the broker (i.e. the company that the agent works for) may also earn a piece of the commission (up to 50% for new agents). Real estate agents also need to pay for their own expenses (including driving customers around, professional association fees, signs, advertising expenses, and other expenses).

So, in the above example of earning $7,500 on the sale, the individual agent my only get $2,500 or so after expenses.

With so much money riding on each transaction, the real question is: how many transactions can a real estate agent complete each year? On average, members of the National Association of Realtors complete 12 transactions each year. If the average real estate agent earns $5,000 per transaction (after expenses), they would net $60,000 annually. However, these real estate agents have an average of 10 years of experience. Newer real estate agents will likely sell even fewer houses, and have lower incomes.

According to the Bureau of Labor Statistics, the average real estate agent earns $45,990 each year, but the range in income is massive. One-tenth of real estate agents earned less than $23,000, and 10% earned more than $110,000. It is important to note that some real estate agents only work on a part-time basis, but most work a full 40 hours per week.

What Does It Take to Be Successful as a Real Estate Agent?

If you want to earn a six-figure income as a real estate agent, then you’re going to need more than just a few yard signs to earn a great income. In particular, real estate agents need to be very careful to watch their expenses, especially advertising expenses (on sites such as Zillow) which can eat up a huge chunk of profits. The more money you can keep on each transaction, the more money you’ll earn overall.

When you do spend money, you’ll want to be very careful about how you spend it. Some real estate agents choose to invest their advertising dollars in Facebook ads, and maintaining a clean and easy-to-find online presence. Others invest in mailers to send to people that may want to sell their house in the near future. Some successful agents work on growing their “organic” social reach by creating custom videos for each homebuyer. These videos have music, pictures of the new house, and of the buyer outside their house. Many happy clients share these videos on Facebook to announce their big purchase.

Eventually, many real estate agents turn into a broker and hire agents to work under them. These agents have somewhat lower costs (which are covered by the hiring agent), but they earn lower commissions since the hiring agent takes a cut. Adding agents to your team is one way that many real estate agents add income without adding a ton of extra work.

Another important consideration is to treat each customer with great customer service. Although buying a house is a big deal, people buy and sell houses as often as every few years. If you’re a great agent, you will have repeat customers (and customers who refer their friends to you). Word of mouth is still the most powerful way to generate business.

With this changing environment and technology, it's harder than ever for agents to stay relevant. We talk about this a lot (read the comments) in our article on What Do Real Estate Agents Do Anymore? It's garnered a lot of attention (pros and cons) from agents and people alike.

Also, it really does pay to be in an expensive housing market. Selling $100,000 condos earns next to nothing, but selling $500,000 to $1,000,000 homes on the regular can be a much more lucrative prospect. 

How Quickly Can You Generate Your First Commission?

One of the big keys to becoming a successful real estate agent is generating your first commission quickly. Real estate agents often have to front several thousand dollars worth of costs (licenses, education, ads, and signs) before ever finding their first client. The longer it takes to generate your first commission, the longer you’ll bleed out money without being compensated.

To be sure you earn money quickly, let your friends and family know that you’re a real estate agent. Let people know via social media, and through personal contact. Whenever people mention they might move, let them know you’re an agent. It might sound obnoxious, but you have to get the word out. Once you’ve completed a few transactions, you should start to see your business grow through referrals.

If you need an income before you can generate your first commission, you might want to find hourly work at a real estate agency. Whether you’re doing clerical work, advertising work, or marketing, you’ll be gaining experience in the right field and earning an income. Hopefully your work at a real estate agency will also leave you with some time to build your business as an agent too.

Warning: You Need a License

In general, to become a real estate agent, you’ll need to become licensed in your state. If you live near a border, you’ll probably want to become licensed in a few states. The requirements for licensure vary by state, but you’ll generally need to pass a test and be at least 18 years old. The test will cover a few topics including real estate laws specific to the state where you’ll be licensed.

Aside from your state licensure, you don’t need any other certifications. Continuing to learn about your field is important to growing as a real estate agent, but actually earning the certificate isn’t likely to bring you any new business.

Final Thoughts

It's important to understand how real estate agents are compensated when considering the field. If you look at every real estate license, the average home sale per license is one every two years. That means many agents aren't making much money.

As a consumer, when you hire an agent, you want one that it's the top 10% of earners. This proves they have a track record of selling homes in your area. You probably don't want one that only sells 1-2 homes per year, even if they give you a good break on commissions.

Robert Farrington
Robert Farrington

Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.

He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.

He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.

How Much Money Do Real Estate Agents Make Each Year?
Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or other advertiser and have not been reviewed, approved or otherwise endorsed by any of these entities.
Comment Policy: We invite readers to respond with questions or comments. Comments may be held for moderation and are subject to approval. Comments are solely the opinions of their authors'. The responses in the comments below are not provided or commissioned by any advertiser. Responses have not been reviewed, approved or otherwise endorsed by any company. It is not anyone's responsibility to ensure all posts and/or questions are answered.
Subscribe
Connect with
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
Notify of

I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree

6 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Primary Sidebar

Robert Farrington will teach you how to get out of student loan debt and how to start investing.

Hi! My Name is

America's Millennial Money Expert

Welcome to The College Investor. We're here to help you escape student loan debt so you can start investing and building wealth for the future

Our expert guides, reviews, and more are designed to help you achieve your financial goals.

Want to learn more? See what's in my wallet.

As Featured In

Social Media

Popular Posts

Side Hustling

53 Side Hustle Ideas To Make Money Fast

Best Side Hustles

20 Best Side Hustles You Can Start Earning With In 2023

Crazy Ways To Make $10,000

10 Crazy Ways To Make $10,000 You’ve Never Heard Of

Make $50,000 Per Year

3 Ways To Make $50,000 Per Year Without Working With Passive Income

Student Loan Scams

Top Student Loan Scams

Net Worth of Millennials

Average Net Worth Of Millennials By Age

Ways To Get Student Loan Forgiveness

Student Loan Forgiveness Programs (The Complete List)

529 Plan By Age

How Much Should You Have In A 529 Plan By Age

Passive Income Ideas

40 Passive Income Ideas You Can Use To Build Wealth In 2023

Make Money From Home

80 Ways To Make Money From Home In 2023

Ultimate Guides

529 Plan Guide

529 Plans: The Ultimate Guide To College Savings Plans

Student Loans and Financial Aid By State

Student Loan And Financial Aid Programs By State

Student Loan Advice

The Definitive Guide To Student Loan Debt

Student Loan Forgiveness By State

The Full List Of Student Loan Forgiveness Programs By State

newretirement

How to Start Saving Now: The College Graduate’s Guide to Saving for Retirement

Latest Research

How much to file taxes

Tax Survey: How Much People Paid To File And The No.1 Tax Software They Used

Inflation survey

Side-Hustles To The Rescue: Survey Shows 86% Stressed About Money & Inflation

students choose to work survey

75% Of Students Would Still Choose To Work Even If They Didn’t Have To

Institutional Merit Grants

Who Gets Institutional Merit Grants At Private Colleges?

Resume Student Loan Payments

Survey: Even With Higher Expenses, Most Student Loan Borrowers Are Ready To Resume Payments

Footer

Who We Are

The College Investor is an independent, advertising-supported financial media publisher, focusing on news, product reviews, and comparisons.

Connect

  • Contact Us
  • Advertise
  • Press & Media

About

  • About
  • Our Team
  • Podcast
  • Editorial Guidelines
  • How We Make Money
  • Archives

Social

Copyright © 2023 · The College Investor · Privacy Policy ·Terms of Service · DO NOT Sell My Personal Information

wpDiscuz