Real estate agents in the U.S. earn primarily through commissions on home sales, typically ranging from 5% to 6% of the sale price. The average annual salary for a real estate agent is about $100,000, with monthly earnings around $6,658 on average
. However, income can vary widely depending on experience, location, sales volume, and brokerage fees. Income ranges:
- New agents often earn between $30,000 and $50,000 in their first year, though some may earn little or nothing initially as they build their client base
- Median salaries reported can be around $48,000, with the bottom percentile making as little as zero to $25,000, and the top 10% earning $100,000 or more annually
- High-performing agents in competitive markets can earn six figures or more, with some top agents making upwards of $190,000 or beyond
Geographic variation:
Agents in large metropolitan areas tend to earn more, with average salaries in
cities like Los Angeles ($104,789), New York ($103,146), and Austin ($101,118)
being higher than the national average
. How commissions work:
A typical 6% commission on a $500,000 home sale would be $30,000, split
between the buyer’s and seller’s agents and their brokerages. After splits and
expenses, the agent’s take-home pay is often less than the gross commission
. Factors influencing earnings:
- Market conditions (buyer’s vs. seller’s markets)
- Experience and networking
- Brokerage commission splits and fees
- Number of transactions closed
- Specializing in commercial real estate or property management can increase income
In summary, real estate agents' earnings vary widely but average around $100,000 annually, with significant potential to earn more depending on market, experience, and effort. New agents typically start lower and increase earnings over time as they close more deals and gain experience.
