How much does realtor make from sale

Per sale earnings | Earnings by state | How agents get paid | Are commissions negotiable? | Annual earnings | Hourly earnings | FAQs

The average annual salary for a real estate agent is $61,480, but individual earnings vary widely.1 While top selling agents can pull in six or seven-figure salaries, half of agents make less than $48,340 per year.

Most real estate agents earn money through commissions — which typically run sellers 5–6% of their home’s sale price (though the rate can be negotiated).

While the seller’s agent technically charges the commission, the buyer’s agent also gets a share — and both agents split their earnings with their supervising brokers.*

Commission splits between agents and brokers vary, but 50/50 is common for new agents, while more experienced agents might keep 70%. After commissions are divided, an agent’s take-home pay on a $400,000 home sale will be about $5,500–$8,400 — or 1.5–2.1%.

Given that most agents are commission-based contractors rather than salaried employees, how much they make depends on:

• The number of homes they sell 
• The commission they bring in (as a percentage of the sale price)
• The percentage they pay to their broker 
• The amount they pay in overhead (fuel costs, MLS dues, marketing expenses, etc.)

Listing agents charge sellers an average commission of 5–6% of their home’s sale price. However, that amount is generally split with the buyer’s agent.

• Listing agents earn an average commission of 2.8% per sale
• Buyer’s agents earn an average commission of 2.7% per sale

Agents don’t get to keep all of their commission from a sale, though — each gives a portion to the broker they work under.

Assuming an even split between agents and brokers, here’s how a typical commission breaks down:

At the end of the day, most agents walk away with about 1.5% per sale. On a home priced at $200,000, that equates to $3,000. However, on higher priced homes, agents stand to pocket much more. 

Real estate agents’ earnings vary by state

Agents generally earn more in large cities or densely populated states.

For example, real estate agents in New York make $102,200 per year, on average. Agents in South Dakota, by comparison, make $45,550 per year.

The table below breaks down average commissions and take-home earnings by state.

*Dollar values are rounded to the nearest hundred.

How do real estate agents get paid?

Real estate agents earn a commission each time they assist a buyer or seller with a sale. 

The commission amount — including the percentage that goes to the buyer’s agent — is specified in the listing agreement drawn up between the home seller and their agent.

When a home sale closes, commissions are deducted from the proceeds and distributed through the escrow or title company directly to the buyer’s and seller’s agents’ brokerages. 

Each broker then disburses the proper share to their agent, according to their agreed-upon commission split, which typically starts at 50/50 and graduates to 70/30 or better as agents grow their sales numbers.

Some agents (like those who work for Redfin) get a base salary from their brokerage and earn a smaller commission from each sale — but most work exclusively on commission.

Commissions can be negotiated

Most people don’t realize they are allowed to negotiate commission with their real estate agent.

On average, U.S. home sellers spend $19,214 (the equivalent of 5.37% on a typically priced home) on realtor commissions — making them one of the biggest expenses you’ll pay when selling a home. 

However, commission rates aren’t standardized across the industry. They range from a low of 4.45% to a high of 6.34%, depending on the market.

While commissions are generally established by an agent’s broker, some realtors have the freedom to set their own rate.

If you’re comfortable starting the conversation, your agent might be willing to give you a discount. Or, you can skip the negotiations and work with an agent offering lower rates right off the bat.

Our friends at Clever have pre-negotiated commission with partner agents across the county, so you’ll only have to pay 1% or $3,000 to your listing agent when you sell your home!

How much do real estate agents make per year?

The U.S. Bureau of Labor Statistics puts the median annual wage for a real estate agent at $48,340 — meaning 50% of agents make more and 50% of agents make less. 

While most agents work on a commission basis, you can calculate their earnings by adding up their entire take-home commissions over the year.

The typical take-home pay for an agent on a $350,000 home (which is close to nationwide median home value) is $5,250.

Median annual earnings / Average per sale earnings = Total number of annual sales

$48,340 per year / $5,250 per sale = 9.2 sales

Theoretically, a real estate agent needs to complete approximately 9–10 transactions a year to earn the national median income.

To break into the top 10% of agents earning $102,170 or more, you’d need to sell approximately 20 homes per year.

What determines a realtor's earnings?

A realtor’s annual earnings are affected by factors like:

• Location
• Number of sales
• Years of experience
• Hours worked
• Local real estate prices
• Out-of-pocket expenses

What out-of-pocket expenses do realtors pay?

On top of commission splits, most real estate agents — unless they are salaried — will also need to cover:

• Transportation to get to and from listings
• Health insurance
• Taxes
• Professional membership fees
• Marketing costs (signage, photography, business cards, etc.)
• Continuing education

How much do real estate agents make per hour?

The national average hourly earnings for real estate agents is $29.56, according to the U.S. Bureau of Labor Statistics. Agents aren’t paid by the hour, but this calculation divides the national average ($61,480) by 2,080 hours (full time).

As a home buyer or seller, you’ll never be handed a bill for the hours that your agent puts in during your sale — they’re compensated for their time with commission once the sale closes.

How much does a real estate broker make?

Brokers — who complete extra licensing requirements to either work independently or hire other agents under them — earn an average annual salary of $86,930.

In addition to keeping 100% of the commission from their own deals, brokers earn a percentage of the commission brought in by the agents who work for them.

Many brokers split commissions 50/50 with their agents, so if the commission from the sale is 3%, they make 1.5%. 

Other brokers may not collect commissions but instead earn a salary for taking on a brokerage’s day-to-day operations and keeping a firm in compliance with state and national real estate laws.

» MORE: Real Estate Agent vs. Real Estate Broker – What’s the Difference?

FAQs

How much does a realtor make on a $100,000 sale?

The national average take home pay for a realtor is 1.7% of the sales price of a home. On a $100,000 sale, an agent will make $1,700.

How does a realtor get paid on a new construction?

Newly built houses are still sold by someone, even if a developer or property management company owns the property. If the property has been listed, in most cases the owner pays their listing agent, who splits their commission with the buyer's agent.

Methodology

We used publicly available data from the United States Bureau of Labor Statistics to source information about the annual earnings of real estate agents across the country in 2021. 

The salary information in our customized data tables intentionally excludes real estate brokers. Brokers often act as both agents and brokerage managers, so their earnings are generally higher and their compensation structure includes a salary or a percentage of the brokerage’s overall sales.

Average commission numbers and total take home pay were sourced from Clever Real Estate’s 2021 survey of real estate agents in all 50 states.

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