Learn Real Estate Salaries by Location & How Commission Works
Almost all decisions in life come down to money. The earning potential is one of the main reasons that people become real estate agents. On top of the freedom that comes with being your own boss, the real estate agent salary that comes with it is alluring to many. How much do real estate agents make? There are multiple factors that play into real estate salary, but the most important is location. Where you practice real estate drives how much you can make. This easy to follow guide lays out what you need to know about real estate agent salaries and how much you could make in your state.
How Much Do Real Estate Agents Make In Each State?
How much you make as a real estate agent really does depend on where you live. The hotter the market, the more you can make. According to ZipRecruiter, the national average real estate agent salary is $83k a year. Obviously, those figures will get swayed by the markets on the higher end. How much does a real estate agent make in your state? Here’s a breakdown of each state and how much real estate agents make throughout the country.
States with Real Estate Agent Salaries Between $60,000-$79,999
States with Real Estate Agent Salaries Between $80,000-$90,000+
The Top 10 Highest Paying Cities For Real Estate Agents
What about specific cities and how much real estate agents make there? Again, the hotter the market, the higher the real estate agent salary. Here are the top highest paying cities for real estate agents, according to ZipRecruiter. To the surprise of no one, six of the top 10 highest paying cities for real estate agents come from California.
|Santa Rosa, Calif.||$93,299|
|Orange County, Calif.||$85,166|
Understanding Real Estate Commission
Now that you know much you can make as a real estate agent, you’re probably curious about how real estate commission works. In the most general sense, commission determines your income. That means a “salary,” per se, is rare. How much you make as a real estate agent is determined by the size of transactions you’re involved in. Needless to say, the more transactions you put forth, the more money you’ll make.
The United States Department of Housing and Urban Development (HUD) established a 6 percent commission to sell houses, which is then split between the buyer’s agent and the seller’s agent. That leaves you with roughly 3 percent of the sales price, which, with a median U.S. home price of $227,000, equates to a $6,810 commission before brokerage costs and taxes.
To break that down: if you sell 10 homes at the median home price, you’ll gross $68,810 for the year. The national average real estate agent salary is $83k a year.
How Long Before You Start Making Money As A Real Estate Agent?
In order to make money as a real estate agent, you must first meet all of the requirements in your state. The process varies by where you live, so it’s important to know your specific requirements. After that, you make money as soon as you're fully licensed and working underneath a broker or employing broker. The rest is up to you.
If this is a full-time job, you can devote the hours needed to have more transactions and thus make more money as a real estate agent. If you’re a part-time real estate agent or working real estate as a weekend gig, you can make enough to stow away in your savings. That’s one of the major benefits of the real estate industry: it’s up to you. The flexibility is one of the major reasons people want to become real estate agents. Well, after the salary you can make, of course.