Real Estate Agent Salary: How Much Agents Earn & Factors Affecting Their Salary
Kaylee specializes in real estate, B2B, and SaaS companies. You can find her expertise in sales and real estate content on Fit Small Business.
This article is part of a larger series on How to Become a Real Estate Agent.
According to the National Association of Realtors (NAR), the median real estate agent salary was $43,300 in 2020—a decrease from 2019. However, the term “salary” is a misnomer in real estate industry compared to how it is used to describe earnings in other industries. Agents work as independent contractors, meaning average real estate income statistics vary wildly based on factors like deal size, location, hours worked, years of experience, and operating expenses.
Here is a breakdown of how real estate agents make money, what impacts their salary, and tips to increase it:
How Real Estate Agents Earn Money
When you’re looking to find how much money a real estate agent makes in an average year, it’s important to understand that a real estate agent’s income depends on the size and frequency of commissions earned from the properties they help clients buy or sell during that period of time. This means that an agent should expect periods of spikes and dips in their income rather than a steady stream of fixed wages.
In addition, many agents receive only part of the commission on a property, based on the commission splits of their brokerage. To learn more about realtor commissions and calculate your own commission splits, 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. Some brokerages offer a 50% split, while others offer a 90% to 100% split, which can significantly impact your income. 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.
Being a real estate agent offers unlimited earning potential. Whether you are getting started in your real estate career or looking to increase your income, real estate schools like Colibri Real Estate or The CE Shop can help get you to your goals.
The CE Shop offers one of the most engaging and interactive online course platforms, along with the widest variety of prelicensing course packages and continuing education topics. 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.
4 Factors That Affect Real Estate Agent Salary
Real estate salaries across the country vary wildly because of a number of factors. For example, real estate agents have the flexibility to work part time or full time, but the resulting income is dramatically different. In addition, agents who have more years of experience and live in a location with higher home values automatically tend to make higher salaries.
For example, ZipRecruiter research shows that real estate agents in New York City tend to have a higher median income of $97,000 than agents in rural Louisiana, who average $66,000, even if they work the same number of hours and work with the same type of properties.
Here are the top four factors that impact the salary of a real estate agent:
1. Number of Hours Worked
In general, agents who work more hours tend to make more money. However, many agents work in real estate part time, which drives down the median salary for real estate agents overall. According to McKissock Learning, agents who worked 40 hours or less per week made about $72,000, and agents who worked more than 60 hours per week made $172,325.
2. Years of Experience
Only 15% of all Realtors have over 25 years of experience, and 26% of Realtors have two years of experience or less. The years of experience that agents had made a huge impact on the average real estate agent’s salary. For instance, 59% of Realtors with under two years of experience made less than $10,000, while 39% of Realtors with more than 16 years of experience made over $100,000.
Real Estate Experience | |||||
|---|---|---|---|---|---|
Gross Personal Income | All Realtors | 2 Years or Less | 3 to 5 Years | 6 to 15 Years | 16+ Years |
Less than $10,000 | 24% | 59% | 18% | 11% | 10% |
$10,000 to $24,999 | 13% | 15% | 17% | 12% | 10% |
$25,000 to $49,999 | 17% | 13% | 22% | 26% | 25% |
$50,000 to $99,999 | 21% | 8% | 23% | 26% | 25% |
$100,000 to 149,999 | 10% | 2% | 9% | 13% | 13% |
$150,000+ | 15% | 3% | 10% | 30% | 26% |
(Source: NAR)
It’s also important to note that agents with more experience got approximately 20% to 30% of their business from referrals and 37% of their business from repeat clients. Real estate referrals and repeat clients are two of the most powerful ways to grow any real estate business, and they naturally increase the longer you’re in business. When you have a solid base of real estate referrals, you can spend less time, money, and effort on generating new leads, allowing you to scale more quickly.
Overall, the real estate field is growing, with more than 800,000 new members in the National Association of Real Estate (NAR) in the last year. This shows that new real estate agents are quickly realizing the value of being a Realtor and using the resources provided within the membership to grow their income more quickly and efficiently.
3. Business Location
The saying “location, location, location” applies to real estate agents just as much as it applies to homebuyers and sellers. The location of an agent is one of the biggest factors that impacts their earning potential and how much real estate agents make in a year.
However, many people falsely believe that home values are the only thing that increases an agent’s earning potential. In reality, there are a few additional factors that will affect the likelihood of making more money, like the number of active real estate professionals and the percentage of homeownership. Simply moving to an area with high home values will not be beneficial to your real estate business if it’s already oversaturated with agents and has a low percentage of homeownership.
Instead of looking only at median home values, consider the city or state’s population and employment data, and look at the variety of real estate agents’ weekly salary and annual salary data in the following chart:
Rank | State | Annual Salary | Weekly Pay | Median Home Prices |
|---|---|---|---|---|
1 | Washington | $102,117 | $1,964 | $339,000 |
2 | Maryland | $100,421 | $1,931 | $314,800 |
3 | Virginia | $97,499 | $1,875 | $273,100 |
4 | New York | $97,100 | $1,867 | $313,700 |
5 | Delaware | $95,667 | $1,840 | $251,100 |
6 | Nebraska | $95,195 | $1,831 | $155,800 |
7 | California | $92,555 | $1,780 | $505,000 |
8 | Idaho | $92,234 | $1,774 | $212,300 |
9 | New Hampshire | $91,536 | $1,760 | $261,700 |
10 | Vermont | $90,265 | $1,736 | $227,700 |
(Sources: ZipRecruiter and World Population Review)
You can achieve real estate success anywhere with the right work ethic and strategies, but your income will be limited if you live in an area where properties are sold at particularly low prices. According to Realtor.com, these are the top 10 cities positioned for real estate growth in 2022:
- Salt Lake City, Utah
- Boise City, Idaho
- Spoke-Spokane Valley, Washington
- Indianapolis-Carmel-Anderson, Indiana
- Columbus, Ohio
- Providence-Warwick, Rhode Island and Massachusetts
- Greenville-Anderson-Mauldin, South Carolina
- Seattle-Tacoma-Bellevue, Washington
- Worcester, Massachusetts and Connecticut
- Tampa-St. Petersburg-Clearwater, Florida
We researched a range of criteria in each state, including median home values, homeownership percentages, cost of living, and agent competition, and defined the top five best and worst states to be a real estate agent. Read through the article to understand where your state stacks up.
4. Operating Expenses
When you think, “how much does a realtor make?” you should also think about potential business expenses. Real estate agents who earn higher incomes off commissions also generally have higher expenses. This is because the more money you can invest in your career, the more money you can make. It’s also because 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 more quickly and easily.
For this reason, one of our best new agent tips is to spend the bulk of your budget on marketing and lead generation efforts. 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. Thus, spending money developing your pipeline with the right tools, like customer relationship managers (CRMs) and advertising, can hasten that process.
Overall, real estate agents had $5,330 of business expenses in 2021. The largest expense was vehicle expenses, which took up $1,200 of the average amount. It’s important to track your miles, vehicle maintenance, and other expenses so you can get the correct real estate tax deductions.
Here’s a quick breakdown of general business expenses for real estate agents:
Business Expenses | Average Costs |
|---|---|
Real Estate Education | $19 for individual continuing education courses; $999 for prelicensing |
Vehicle Expenses | $1,200 |
Website Creation & Maintenance | $100 setup fee; $350 monthly |
Free or up to $1,000+ | |
Desk Fees | $100 to $1,325 per month |
$100 to $1,000 per month | |
$50 to $500 per month | |
Advertising | $20 per lead; $2,300 for online ad campaigns |
For more details on your potential expenses, read How Much Does It Cost to Become a Real Estate Agent?
Tools & Tips for Real Estate Agents to Earn More Money
Most people who choose to become a real estate agent do so because they want freedom, flexibility, and unlimited earning potential. While these are all possible in real estate, it’s much more common for agents of all experience levels to get stuck overworking and underearning. Use the right strategies and tools to scale your business—so you can make the amount of money you want without overworking or sacrificing your personal.
The areas that are most likely to require a great deal of your time are lead generation, marketing, and managing relationships. For that reason, these are the three areas where you should look to invest in the right tools:
Lead Generation
It’s almost impossible to establish a reputation as the go-to real estate agent in your neighborhood right after becoming an agent. Instead, it takes a strong, consistent strategy to build your reputation and customer base without spending hours on old-school techniques like door knocking and cold calling.
With real estate technology and real estate lead generation software, you can break into even the most crowded markets with strategic and automated techniques.
A few of the best tools that you can use to boost your online presence include:
- Zillow Premier Agent: This is one of the most powerful ways to start generating more buyer leads immediately and increase your neighborhood presence online. From establishing reviews to getting seen and marketing yourself, there are free and paid options that help you get in front of the right audience.
- Placester: One of the only ways for agents to create a beautiful, customized IDX website without having to hire a professional or deal with code. Placester websites and marketing services can help you establish an online presence as an agent and generate leads from your website.
- Real Geeks: An all-in-one marketing solution for real estate agents, including a website, comprehensive CRM, email marketing, and a variety of third-party integrations.
- Market Leader: Provides exclusive real estate leads as well as a website, CRM, and marketing automation tools, single property websites, and ready-to-go listing flyers.
Marketing
Marketing any business can be complex, and real estate marketing is no different. It feels like you need to do a thousand tasks at the same time, like create a website, write blog posts, optimize your content for search engines, post on four different social media platforms, and record a YouTube video. You also need to write emails and text messages, and send real estate flyers in the mail. In reality, one individual real estate cannot and should not do all of those things at one time.
Instead, start by choosing one or two marketing channels to master. As you learn how to do a few things well, you’ll also learn more about how to find and choose the right marketing tools.
Here are a few of the top marketing tools for real estate agents:
- Constant Contact: This is the only email marketing tool you’ll need to track contacts, create campaigns, and set triggers to continually customize your messaging.
- Follow Up Boss: A real estate-specific tool for communicating with new leads, current clients, and past clients by email, phone, and text. This could be the best and most efficient way to start using real estate text message marketing and easily organize all of your client communications.
- Canva: This photo editing and graphic design tool has one of the most user-friendly interfaces out there, as well as tens of thousands of fonts, graphics, and photos to help you create professional images and documents for real estate branding, social media posts, thank-you notes, and real estate flyers.
- CityBlast: A team of real estate marketing experts who can help you with unique social media posts, pay-per-click (PPC) advertising, and email marketing.
- Artur’In: A digital marketing solution for real estate, with customized strategies and automated posting on social media, on your blog, in newsletters, and a review management tool to build your authority much faster.
Client Relationship Management (CRM)
Most people struggle to keep up with their friends and family on their own. Once you start your real estate business, it’s much more important to keep track of every potential client you come in contact with. Successful marketing requires consistency, relationship building, and a strong strategy—not just talking on the phone every few months and pushing a hard sale.
Not only will you need to keep track of your leads and clients, but you’ll also need to automate communication when possible. Manually emailing, texting, or calling leads and then adjusting a spreadsheet will eat up hours of your valuable time. Instead, use a real estate CRM that can automatically complete those tasks and offer even more tools.
Here are five top CRMs for real estate professionals:
- Pipedrive: We recommend this CRM for its extensive tools, affordable cost, and visual pipeline that automatically saves time and boosts productivity.
- LionDesk: A real estate CRM that’s built for agencies and brokerages needing multichannel communication and transaction management tools.
- HubSpot CRM: One of the most robust marketing tools available, with a Marketing Hub that provides extensive insights into communication, sales, and appointments.
- IXACT Contact: A real estate CRM ideal for new agents that includes contact management, an easy-to-use website builder, social media scheduling, and email marketing.
- Top Producer CRM: A detailed CRM with insights on each contact, activities, and property, as well as streamlined pipeline and transaction management tools.
Pipedrive real estate CRM
If you’re looking to save a little money, there are free CRM options available. Check out our article 7 Best Free Real Estate CRM Software for 2022 to find the best fit for your real estate business.
Bottom Line
Real estate is an industry that rewards both hard work and experience, and real estate agent salaries reflect that. According to the 2021 NAR report, it takes the majority of real estate agents approximately five years to make six figures or more. However, by using the right tools and strategies, you can increase your real estate agent salary in less time and with more efficiency.
