How Much Does a Realtor Make | Real Estate Agent Commission Split

Are you considering a career in real estate and you want to know how much does a realtor make or are you currently in real estate and you want to know how much money you should be making in the average realtor salary?

All right so before I really dive deep into it and I don’t want to overwhelm you so I’m gonna let you know if you stay tuned until the end I do have a special resource for you that you can use to really find out if real estate is the career for you and so I’ll tell you more about that at the end of the article.

But right now let’s go ahead and talk about real estate agent sellers. So NAR state for those of you who don’t know ignore is Nara stands for National Association of Realtors and so when you become a real estate agent to get that realtor distinction you’re gonna have to become a member of NAR.

So far states that the average Realtors salary or the average amount of money that a realtor makes every year is around $42500.

I know but before you get so excited about that I want to tell you kind of how that’s broken down or how it typically works because believe it or not most agents don’t make anywhere near that and that’s just me being real with you.

For the most part and I know that this article is called real estate agents salaries but a lot of agents are not salaried and it’s very common for an agent to be one hundred percent commission. Most times if you have a salary real estate position you’re working for a company or you’re working on a team and you’re not acting as a Realtor to where you’re getting new clients you’re you know doing.

How much does a Realtor Make

Today we’re talking about you actually working as a how much does a realtor make from actual real estate deals. Like I said most people in the real estate industry as agents work off of Commission and let me kind of break down what Commission is for those of you don’t know.

Typically in a job you’re gonna have an hourly wage or you’re gonna have a salary hourly meaning when you clock in so when you clock out you’re going to get paid a certain dollar amount for all of those hours that you were clocked in.

Salary means you’re gonna get paid a certain amount of money per year no matter how much or how little you work this is the set number and this is what you’re gonna get at the end of the year.

Commission

Commission means you’re only getting paid for what you sell so if you’re not selling you’re not making money there is no power Lea there are no guarantees there is nothing so that you can feel comfortable knowing that you’re gonna take a certain amount of money home it’s literally all you.

Unlike a job when you are working commission everything that you get you to have to account for so you have to account for your own taxes your own marketing expenses your own transportation your everything, everything in your business you have to pay for theirs there is nobody really giving you a lot of stuff like a job normally would.

A lot of people are uncomfortable with that a lot of people are uncomfortable working commission.

I will say about Commission I was uncomfortable with it at first but honestly it’s all I really know now and I honestly couldn’t even see myself going back to an hourly or salary position with Commission you literally can make as much money as you want.

Real Estate Agent Commission Split with Broker

With that being said I want to break down how the actual pay structure works. On a commission pay structure, you’re going to get a percentage of the sales price of the home that you sell. So as an example if you sell a hundred thousand dollar home you’re gonna get a percentage of that as your paycheck.

I guess you can say now there are splits involved and so let me go ahead and go into splits right now as a real estate agent you’re going to work at a brokerage and you’re going to have a broker who’s you that’s managing your license that’s making sure you’re not breaking any laws that are being the liable party in your actual real estate career the broker is going to provide you with some resources with training with the company marketing probably an office space all that kind of stuff.

Now with them doing what they want to get paid and so the way that they get paid is they take a split of your commission and that’s where that word split comes from. So on top of the commission that you receive off of a sales price of a home you’re going to split that with your broker and that amount can vary by whatever brokerage you’re with some brokerages are a hundred percent split which means or a 100% commission.

This means they don’t make any money off of your split you might have to pay like a transaction fee or a monthly fee some brokerages have lower splits and some have higher splits and so when you’re out there interviewing they’re gonna let you know ahead of time what their splits are to be an agent at their firm.

The typical commission that you receive off of a sale is going to be 3% and three percent meaning you’re just representing one side if you represent both sides typically it tends to be 6% but Commission can be anything really it’s literally just a negotiated amount but it’s pretty standard to see 3 % is the amount that you’ll kind of take-home before your broker split.

Back to the example of the hundred thousand dollar home if you sell a hundred thousand dollar home you’re going to take home 3000 $ before your broker split and whatever your broker split is on top of that you can just deduct that from that three thousand dollars and then you’re gonna put into your pocket whatever that final number is and you still need to account for your taxes transportation marketing expenses all that kind of stuff.

Is Real Estate a Good Career For You in 2020

But you can just kind of use that as a standard and so I want to tell you how we make money in the real estate business the only way to make money in the real estate business is to sell and so you have to sell properties.

If you’re not closing homes you’re not making money and so you need to be working with buyers you need to be working with sellers you can work with tenants looking for a lease but you have to be closing deals to actually make money.

Just because you’re a real estate agent you have a real estate license it does not mean you’re gonna make money and that’s where a lot of agents kind of fill in the business because they don’t really understand what you have to get out there and work for it.

It’s not just gonna fall into your lap because you got your license and so you have to find your own clients you have to get those clients under contract you have to get them close and you get paid at the end of the day once everything is done and so until the property is sold or until that lease is signed you’re not getting paid and so that’s essentially how we make money.

That’s how the real estate agent salaries and paychecks work So if you have any questions comment down below.