How Much Do Realtors Make?
How Much Do Realtors Make?
Real estate agents and brokers, sometimes called Realtors, buy and sell property for clients. Brokers are licensed to manage real estate offices, while agents aren’t. Brokers oversee the activities of agents, and brokers as well as agents help clients find homes or apartments to rent or buy or help clients rent or sell property.
Average National Pay of a Realtor
According to the Bureau of Labor Statistics (BLS), a real estate agent salary averaged of $62,060 a year in 2019. This is the equivalent of earning $5172 a month. Because they’re licensed to manage real estate offices, real estate broker salaries can be considerably more. According to the BLS, real estate brokers made an average of $81,450 per year in 2019, or approximately $6788 a month.
Pay Range of a Realtor
As of 2019, half of real estate agents working in the United States reported annual pay of between $51,790 and $91,990. The lowest-paid 10% of real estate agents earned $25,000 or less per year, while the highest paying real estate careers earned $111,000 or more a year. The median-earning half of brokers made between $81,160 and $89,790 per year. 10% of real estate brokers earned $24,000 or less per year, while the highest-earning 10% of brokers brought home an annual salary of $178,000 or more.
How Do Real Estate Agents Get Paid?
While some real estate agents are also brokers or associate brokers—positions that require extra training and licensing—commission payments go to the broker who manages the real estate brokerage where the agent works.
The commission is then split between the broker and the real estate agent according to their agreement. The commission split varies from one agent to another, with new agents sometimes earning a smaller percentage of the commission than experienced agents or successful ones who sell more homes or more expensive properties. The commission is split at the settlement table between the listing agent’s brokerage and the buyer’s agent’s brokerage; then the agents themselves are paid by their brokers.
Who Pays The Commission?
Technically, the real estate agent is paid by the home seller at the settlement table, where the fee is subtracted from the proceeds of the home sale. However, the sellers will take the agent’s commission into account when determining a listing price. So, in a sense, the buyers are paying the commission because they’re paying to buy the house.
Contracts and Commissions
The exact percentage of the real estate agent’s payment (or commission) should be spelled out in the listing agent’s contract with the seller. This ensures that the listing agent gets paid if the property sells, regardless of who buys it.
Listing agents and their brokers spend time and money marketing a home, advertising, and preparing the home for sale, so what a real estate agent gets paid is to cover those services. Buyer’s agents typically have a contract with their clients so they are paid when the buyer completes a purchase, even if the buyers found that particular property on their own. Whether you’re a buyer or a seller, the professional support of a real estate agent who represents your interests should be worth every dollar of the commission.
Pay Difference of a Realtor by Location
As of 2019, real estate agents and brokers reported significantly different average monthly salaries according to where they lived. In general, the Northeast and West tended to be the highest-paying areas. Real estate agents living in the highest-paying state, New York, reported an average monthly salary of $9,317. By comparison, those in Illinois earned the least, averaging just $3,511 a month. Average real estate broker pay ranged from a low of $2,756 per month in Puerto Rico to a high of $9,405 per month in New Mexico. According to indeed, the average salary for a real estate agent is $89,624 per year in Houston, TX.
While most use the term “realtor” to indiscriminately refer to all real estate sales agents and brokers, some use the term to refer specifically to members of the National Association of Realtors. According to a 2020 report by the NAR, members reported a median gross income of $49,700 a year in 2019. Pay changed drastically with experience; NAR members with two years of experience or less reported a gross monthly income of just $8900 per year, while those with 16 or more years of experience earned a median gross income of $86,500 per year.
Job Outlook of Realtors
According to the BLS, jobs for real estate brokers should grow at a rate of about 3% through 2029, while jobs for real estate agents will grow by 2%. This is a considerably slower rate of growth than the rate of growth the BLS projects for the U.S. economy as a whole. Because so many realtors are self-employed, it’s relatively easy to enter the profession. Realtors tend to make significantly less money during periods when the real estate industry is in decline.