How Much Does a Real Estate Agent Make
One of the key considerations that one makes during his career choice is the remuneration or salary that he can potentially get. Of course, we all do jobs for money. The higher the pay will be, the more captivating a job will be.
There is no doubt about the fact that real estate is one of the most lucrative careers that you can choose but little do we know is how much money does a real estate agent make?
In this blog, we are going to know how much money real estate agents make in the US. Not only will we reveal the salary of a real estate agent in the US, but we will also reveal the average income of real estate agents in each of the 50 States along with the District of Columbia.
So, let’s begin:
How Do Real Estate Agents Earn Money?
Real estate agents usually earn money through commissions or referral fees when working for a real estate brokerage, either as an in-house agent or an independent contractor.
The real estate commission is a fee that real estate agents get for their expertise and the effort they put into selling a property.
The commission is calculated as a percentage of the property's final selling price and is shared between the buyer’s and seller’s agents.
Do Real Estate Agents Get a Base Salary?
No, real estate agents usually don’t get a base salary. Their income comes primarily from commissions earned on the real estate deals they close.
The standard arrangement is that real estate agents work on a commission-only basis, where they receive a percentage of the sale price as their commission when they successfully help a client buy or sell a property.
However, some brokerage firms do offer their agents a base salary in addition to commissions as an incentive. This practice is less common though. Most of a real estate agent's income comes from those commission-based fees on their closed deals.
How Much Does a Real Estate Agent Make?
As of May 2024, the average salary of a real estate agent in the United States is $85,793, according to ZipRecruiter.
However, it’s important to know that real estate commission rates vary from state to state in the US.
While the average nationwide real estate agent commission is 5.49%, the commission rates in the southern states are the highest.
Average Salary of a Real Estate Agent in Each US State
|
State |
Avg. Yearly Salary |
|
Alabama |
$88,258 |
|
Alaska |
$84,024 |
|
Arizona |
$76,653 |
|
Arkansas |
$64,013 |
|
California |
$85,825 |
|
Colorado |
$89,287 |
|
Connecticut |
$75,032 |
|
Delaware |
$93,913 |
|
District of Columbia |
$100,261 |
|
Florida |
$61,467 |
|
Georgia |
$69,455 |
|
Hawaii |
$81,292 |
|
Idaho |
$82,265 |
|
Illinois |
$75,016 |
|
Indiana |
$78,272 |
|
Iowa |
$74,625 |
|
Kansas |
$70,029 |
|
Kentucky |
$74,499 |
|
Louisiana |
$68,291 |
|
Maine |
$83,600 |
|
Maryland |
$90,887 |
|
Massachusetts |
$84,775 |
|
Michigan |
$67,394 |
|
Minnesota |
$78,217 |
|
Mississippi |
$74,380 |
|
Missouri |
$72,444 |
|
Montana |
$75,499 |
|
Nebraska |
$83,169 |
|
Nevada |
$79,448 |
|
New Hampshire |
$80,974 |
|
New Jersey |
$82,215 |
|
New Mexico |
$78,023 |
|
New York |
$90,773 |
|
North Carolina |
$70,217 |
|
North Dakota |
$82,840 |
|
Ohio |
$73,720 |
|
Oklahoma |
$96,591 |
|
Oregon |
$82,873 |
|
Pennsylvania |
$83,146 |
|
Rhode Island |
$76,762 |
|
South Carolina |
$71,696 |
|
South Dakota |
$78,292 |
|
Tennessee |
$72,652 |
|
Texas |
$76,823 |
|
Utah |
$72,597 |
|
Vermont |
$88,900 |
|
Virginia |
$92,296 |
|
Washington |
$93,538 |
|
West Virginia |
$64,214 |
|
Wisconsin |
$81,220 |
|
Wyoming |
$79,478 |
Factors That Contribute to a Real Estate Agent’s Income
Number of Deals Closed:
This is arguably the most significant factor that contributes to a real estate agent's income. Real estate agents earn money through commissions, earning a percentage of the sale price of each property they help buy or sell. The more property deals they successfully close, the more money they make.
Years of Experience:
How experienced a real estate agent is also has a lot to do with the money he makes. Real estate agents with more years of experience often charge higher commissions. Moreover, they have established networks and a solid reputation in the market that help them get more client referrals.
Brokerage Fees:
Real estate agents typically work under the umbrella of a brokerage firm, which provides support services, training, and resources. In return, the brokerage takes a percentage of the real estate agent's commissions, known as the brokerage fee or split. The exact percentage varies depending on the agreement between the agent and the brokerage.
Location:
The location in which a real estate agent operates also greatly impacts his income potential. Real estate markets with higher property values, higher commissions, and stronger demand often offer better income opportunities for agents.
Real Estate Market Conditions:
Real estate is a cyclical market, and market conditions greatly influence a real estate agent's income. During times of high demand, rising property values, and a seller's market, real estate agents usually close more deals and make more money in commissions. On the other hand, during market downturns or buyer's markets, they don’t make enough money.
