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.
- Facebook for Realtors: Includes tutorials for everything from setting up your page to running ads
- 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. To make the best use of this tool, take the free course on How to Crush It on Zillow. 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. Click here to get started.
Wayne Mattson
Great posting….. for the US Realtor. It would be nice if we could have a revamped article applicable to the Canadian Realtor and Canada’s Income Tax Laws. BIG Difference.
Laura Handrick
Hi Wayne,
Thank you for your comment. As a US-based startup ourselves we’re currently providing content that’s mostly US focused (mastering one country’s income tax laws across 50-states is a big job). However, we do have at least one Canadian staff member and hope to add more global perspectives in the future. Well said! We’re listening.
Best,
Laura, Staff Writer
Rick Sharples
Simple math. Close only ONE home a month, and not an expensive one either….say $200,000. The listing agent and selling agent customarily earn 3% each, and even on a 70/30 split with your broker, that still equates to $4200 per closing, or just over $50,000 per year. Not all that shabby, considering it’s an accomplishment that’s achievable on pretty much a part-time basis.
Laura Handrick
Thanks for sharing your expertise Rick!
Mike
Since this article is dated I still hoping to get a response from someone to this questions. My wife who is now working a job that brings in about 22k a year is about to embark into being a realtor with a broker associated with Better Homes & Garden soon after her 6 weeks of schooling is over and doing it fulltime. She is a Type A personality and a doer. She is not one to be idle. After reading this article I was both discouraged and encouraged. Discourage because the whole goal here is for her to get out of this near minimum wage job and use her God-given potential which I believe she can be an incredible realtor with much effort. But I see that in the first two years the average income is lower than expected. The encouraging part is that the part-time realtors were factored in so the numbers are not true for someone who is determined such as my wife. And so the encouraging portion of this article was the final sentence where he states that if someone works 60+ hours a week then they could potentially make 90K +. However my wife at 53 may not have that complete package of energy for 60 hours but I do know she is very capable of a solid 40 work week. So all that being said and the fact that we live in the hottest market in the USA [i.e. Atlanta] where it seems there are more people wanting homes than homes available, is it feasble to estimate her income above 50K for the first year?
Emile L'Eplattenier
Hey Mike,
The great thing about real estate is that there is truly no top end of what you can make. If you’re a hard worker, lucky, and smart, you might be able to make $200k per year or more. There are people who make this much renting studio apartments in Manhattan btw. The key is to work very hard, learn as much as possible, and be willing/able to survive without income as well as invest money into lead generation when necessary. If possible, I would suggest starting out on a team that works high end listings. It’s a great way to get your foot in the door and get to a place where you can make high commissions. You will make lower splits at first, but could be better off in the long run. Hope that helps.
Rachel Francois
You didn’t mention how real estate agents have to pay 30-40% of their commission in taxes. That eats a considerable chunk of our annual income.
Emile L'Eplattenier
Hey Rachel,
I hear you. Taxes are no fun for anyone, but can be especially difficult when you’re self employed. On our side it also makes it much harder to estimate how much tax someone will owe. This will vary pretty wildly by state, income, and a whole host of other variables. We actually have an article on tax deductions for Realtors that I will probably link to when we update this article.
Thanks for your insight!
Jonathan Steingraber
Rachel this comment is simply untrue. Federal Tax Brackets are graduated and almost nobody pays 30-40%. See: https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2019
Plus they do not pay off their gross income, they pay off their taxable income (after standard/itemized deductions). If you have a savvy broker he will explain how you can also setup an LLC taxed as an S-Corp and pay yourself a salary and be able to reduce your social security taxes as well. Off $100,000 gross income a couple with two kids will pay about 20% in federal taxes including social security and medicare if they set it up write and have a decent accountant. Of course they can reduce that event more by contributing $5500 to an IRA and up to another $50k+ in a solo 401k or SEP or they can put more money away in a defined benefit pension plan.
Grant
What about commission and bonuses which is not real covered here for new workers. The fact is no realestate to keep up their image of a good car, suits, shoes would live on $38000 so where do they make up the rest of the $$
Jeremy Marsan
Hi Grant,
Commission and Bonuses are included in our data. The reason it seems so low, however, is because so many agents work part time. Agents who work 40 to 59 hours per week (regardless of experience) earn an average income of $63,800.
Best,
Jeremy