According to the National Association of Realtors, the median real estate agent salary was $49,700 in 2019. However, almost all real estate agents work as independent contractors within their brokerages and earn income by collecting money on a commission basis rather than drawing a salary, and factors like the number of hours worked and years of experience can significantly impact each agent’s income.
How Real Estate Agents Earn Money
A real estate agent’s income, for the most part, depends on what commissions are collected by the brokerage in return for helping a buyer purchase a property or a seller to list it, and how these fees are split between the brokerage and individual agent. So, when we talk about salary, we are talking about the amount that a real estate agent makes from their commissions. To learn more about commission, read our guide on how real estate commission splits work.
Because so much of what you can hope to make as a real estate agent depends on the brokerage, you should do plenty of research before choosing one. By selecting a real estate brokerage that offers you the tools, expertise, or mentorship that you need in addition to a competitive commission structure, you can increase your earning potential. Read more in-depth information about how to choose what real estate company to work for.
Factors That Affect Real Estate Agent Salary
The income of agents varies widely depending on a number of factors. For example, real estate agents can work part-time or full-time, which results in dramatically different incomes. Additionally, a large part of a top-earning real estate agent’s income comes from referrals, which tend to increase with more years of experience. The location of a real estate agent also is an important contributing factor as markets vary. However, a median annual income can offer an idea of what to expect.
Number of Hours Worked
As the number of hours worked per week increases, so does the median gross income. However, many agents work in real estate part time, which drives down the median income for real estate agents overall. Agents who work more than 40 hours per week make a median gross income of $65,630 or higher, and agents who work more than 60 hours per week make a median gross income of $100,000.
Median Annual Income of Realtors by Number of Hours Worked
Median Gross Income | All Realtors | Less than 20 hours | 20-39 hours | 40-59 hours | 60 hours or more |
|---|---|---|---|---|---|
$49,700 | $8,930 | $29,170 | $65,630 | $100,000 | |
Less than $10,000 | 22% | 50% | 26% | 11% | 5% |
$10,000 - $24,999 | 12% | 22% | 15% | 7% | 5% |
$25,000 - $34,999 | 8% | 8% | 11% | 6% | 4% |
$35,000 - $49,999 | 9% | 8% | 11% | 9% | 7% |
$50,000 - $74,999 | 13% | 5% | 15% | 15% | 11% |
$75,000 - $99,999 | 10% | 2% | 8% | 13% | 13% |
$100,000 - $149,999 | 11% | 2% | 8% | 15% | 18% |
$150,000 - $199,999 | 6% | 1% | 3% | 9% | 12% |
$200,000 - $249,999 | 3% | 1% | 1% | 5% | 6% |
$250,000+ | 7% | 1% | 3% | 9% | 19% |
(Source: NAR 2020 Member Profile)
Years of Experience
The majority of all agents—56%—have been in the industry for two years or less. Clearly, real estate agents with more experience made significantly more money than those with less experience. In addition, many new agents won’t stay in the industry very long or will work part time, both of which impact real estate agent salary statistics significantly.
It’s also important to note that agents with more experience got approximately 20% to 30% of their business from referrals. The longer you’re in business, the more clients you have and the more those clients become important to your bottom line. Generating new leads will become less and less important, as you will get the bulk of your income from repeat and referral clients. On the other hand, agents with less than two years of experience reported that 16% or less of their business came through referrals.
Median Annual Income of Realtors by Years of Experience
Median Gross Income | All Realtors | 2 years or less | 3-5 years | 6-15 years | 16 or more years |
|---|---|---|---|---|---|
$49,700 | $8,900 | $45,400 | $68,300 | $86,500 | |
Less than $10,000 | 22% | 56% | 15% | 10% | 8% |
$10,000 - $24,999 | 12% | 17% | 16% | 10% | 8% |
$25,000 - $34,999 | 8% | 6% | 10% | 8% | 6% |
$35,000 - $49,999 | 9% | 6% | 13% | 11% | 8% |
$50,000 - $74,999 | 13% | 7% | 17% | 15% | 14% |
$75,000 - $99,999 | 10% | 3% | 11% | 11% | 13% |
$100,000 - $149,999 | 11% | 2% | 10% | 15% | 15% |
$150,000 - $199,999 | 6% | 1% | 5% | 8% | 9% |
$200,000 - $249,999 | 3% | n/a | 2% | 4% | 5% |
$250,000+ | 7% | n/a | 2% | 8% | 12% |
(Source: NAR 2020 Member Profile)
Business Location
The saying “location, location, location” applies to real estate agents as much as it does property in terms of earning potential. You can have success in real estate anywhere, but your income will be limited if you live in an area where properties are sold at very low prices. According to Realtor.com, these are the top 10 cities for real estate in 2020:
- Boise City, Idaho
- McAllen-Edinburg-Mission, Texas
- Tucson, Arizona
- Chattanooga, Tennessee
- Columbia, South Carolina
- Rochester, New York
- Colorado Springs, Colorado
- Winston-Salem, North Carolina
- Charleston-North Charleston, South Carolina
- Memphis, Tennessee
Operating Expenses
It is worth noting that real estate agents who earned higher incomes off commissions also generally had higher expenses. This is because the more money you can invest in your career, the more money you can make. For example, the median expenses for real estate agents earning $10,000 or less per year was only $1,640. The median expenses for real estate agents who earned $150,000 or more per year was $35,220.
Here’s a quick breakdown of where the expense amounts are allocated.
Median Expenses for Realtors
Expense | Median Cost |
|---|---|
Median Total Expenses | $6,290 |
Administrative Expenses (e.g., office supplies, equipment, phone bill) | $730 |
Marketing and Promotion (e.g., online ads, print ads, email marketing) | $690 |
Professional Development (e.g., real estate coaching, seminars, continuing education) | $780 |
Technology Products and Marketing Services (e.g., website, CRM) | $540 |
Vehicle Expenses | $1,400 |
(Source: NAR 2020 Member Profile)
Earning money in real estate is something like rolling a snowball down a hill. It may start out small, but after a few years, it will grow much larger. For that reason, we recommend that new agents spend the bulk of their budget on marketing.
Investing in growing your customer base early on can pay off tremendously down the line. Top-earning agents receive a lot of business through referrals and repeat customers—which can take years to build up—so spending money developing your pipeline with the right tools can often hasten that process.
Tools to Help Real Estate Agents Make More Money
New agents face a certain “chicken and egg” problem: Without a network of past clients to give you referrals, it’s tough to make new sales. Without new sales, however, it’s impossible to build a network. When we look at how much real estate agents make, we can increase that bottom line (and the timeline for increased referrals) by using the right strategies and tools such as these:
Social Media
Without an online presence as a real estate agent, you’ll quickly fall behind. To find and make relationships with potential clients in your area, you have to be where they are—and most of them are on Facebook and Instagram.
While you’re setting up your accounts, use resources to help you use social media the most effectively. You can get two free guides that help agents to navigate both Facebook and Instagram, designed specifically to help real estate agents increase their leads.
- Instagram for Realtors: Learn how to use hashtags, what types of photos to post, and what kinds of content to post for maximum results
Email Marketing
When you help clients purchase or sell a home, you want to keep your name fresh in their minds. A great way to do that is by sending periodic emails that provide past and future clients with value. As you’ve seen, referrals and repeat business will end up being one of your primary income sources.
Email marketing software is readily available, inexpensive, and easy to use. Mailchimp is free while you are building your roster of clients and includes important features like tracking and templates.
Lead Generation Software
Everyone wants to be seen as the go-to agent in their neighborhood. With real estate technology, like lead generation software, you can break into even the most crowded markets by having your name established digitally.
A few of the tools that you can use boost your online presence include:
- Zillow Premier Agent: This is the primary way to increase your neighborhood agent presence online. From establishing reviews to getting seen and marketing yourself, there are both free and paid options that allow you to remain in front of the right audience.
- BoldLeads: Includes features that can help you identify exclusive, unscrubbed buyer and seller leads while also offering marketing automation and advertising.
- Placester: Offers agents an IDX website that can help you establish an online presence as an agent while also promoting featured listings.
Customer Relationship Management Software
The more deals you close, the more satisfied clients you’ll have, which will lead to a large increase in both repeat clients and referrals. Whether you’re just starting your network or you are nurturing it, you need to stay on top of your communication and prevent potential clients from falling through the cracks.
We recommend Pipedrive CRM, because it allows you to send, receive, and track emails, as well as get reminders, mobile notifications, and alerts to help you nurture those relationships. Click here for a free trial.
Bottom Line
Real estate is an industry that rewards hard work and experience, with real estate agent salary reflecting that. According to the 2020 NAR report, agents who have been in the industry for 16-plus years earned a median gross income of $86,500. However, by using the right tools and strategies, you can increase your real estate agent salary.
While initial estimates of real estate agent salary look to be low, the good news is that the ceiling offers unlimited potential. Getting started in your real estate career can be the best decision you ever make, and using Real Estate Express can help get you to your goals. Online learning can take place just about anywhere and fit into almost any schedule, allowing you the freedom to scale your income from the convenience of home.
