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How Much Do Realtors Make On A Sale?

Last updated on April 7, 2021

How Much Do Realtors Make On A Sale?

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It’s no secret that changing careers could revitalize your life. And for many, becoming a real estate agent is a great way to move into a new field. But just how much do realtors make on a sale? And for that matter, how much can you really expect to earn on average – or if you truly thrive as a realtor?

This all really comes down to just how good you are at your job. After all, 88% of home buyers end up working with a real estate professional to facilitate the purchase of their home. But how much do realtors make on a sale? The answer is that it all depends on just how much that sale is for, what their commission is, and who else is taking a percentage of the commission.

Realtors don’t make a flat hourly rate. Instead, most of them will earn a small monthly salary that is then increased by making a sale. And for those who don’t work for an agency but who instead go out on their own, virtually all of their revenue stream will depend upon how much they sell each year. In short, when you ask yourself ‘how much do realtors make on a sale?’, you really need to consider a variety of other factors.

Luckily, reviewing just a few basic points can make it much easier to understand how much realtors earn, and could help you understand just what to expect from your efforts in this field.

VIDEO: How Much Do Realtors Make?

How Much Do Realtors Make On A Sale?

How much do realtors make on a sale? The answer is easy enough at first glance – they earn a percentage of whatever the home costs. The exact commission will vary from agency to agency, but in general, you can expect a typical commission to be roughly 6% of the total sales price of a home. For example, if a home sells for a total of $500,000, the 6% commission would come to $30,000.

However, it’s important to note that this commission isn’t just tacked on by everyone involved in the sale. In most cases, a buyer and a seller will have different agents – the listing agent is the person who listed the property, and they’re who represents the seller. A buyer who enlists the help of an agent will have a buying agent. In these instances, sellers and buyers will generally split the commission evenly – that $30,000 commission from the example above means that in a split situation $15,000 will go to each agent.

But even splits aren’t always the case. Sometimes, the split may be negotiated unevenly. For instance, a listing agent may receive 3.5% while the buyer receives 2.5% of the sale. This will vary by listing.

Other Things To Know About Commission

Along with the basics of how a commission works, there are some other things to think about. For instance, here are some things to know:

  • The agent is paid by the seller at the settlement table. Once the closing on the property occurs, the commission is deducted from the proceeds of the home sale.
  • Agents who work for a brokerage will end up being paid by the broker – the commission is split at the settlement table between brokerages, then the agents who handle the actual sale will be paid by the broker.
  • It’s always important for agents to create a solid contract before the home is sold. The contract should always be spelled out clearly so there is no confusion about the commission when the closing date arrives.

In short, knowing the basics about your commission and your percentage before the contract is closed upon is important. However, while things will vary slightly from sale to sale and brokerage to brokerage, the basics of commission remain the same no matter where you are. How much do realtors make on a sale? It really depends on how your commission works out and on the overall price of the property.

How Much Do Realtors Make On Average?

While asking yourself ‘how much do realtors make on a sale?’ is important when you are considering a career change, another thing that is worth considering is easy to overlook – how much realtors make on average. How much do realtors make on a sale? That depends upon an agent’s abilities, their market, and how they succeed in that market. But what can you honestly expect to earn as an agent? Here are a few basic figures to consider:

  • On average, realtors in the top 10% of the field can earn roughly $112,000
  • Those in the lowest percentage earn roughly $22,200 annually
  • The average salary for realtors is around $44,000, representing the majority of agents working in the nation

Agents are often paid depending upon a number of factors. Some brokerages that they work for are paid either a monthly salary or an hourly rate, generally ranging from between $10.21 per hour all the way up to $47 per hour, with the median hourly wage being $25.

So while the average commission is 6%, and while that commission is generally split between buyers and sellers, it’s important to remember that average salaries are simpler to look at – though they may not impact you directly. And the better you are at the art of selling a home, the more you can potentially make.

Maximizing Your Revenue Stream

Of course, while asking yourself ‘how much do realtors make on a sale’, you’ll also need to ask yourself ‘how can I maximize my income? The easy answer here is to make sure that you take the time to become the best possible realtor that you can be. Some things to pay attention to include:

  • Research your market to better price homes and make sales
  • Use social media and the internet to build your brand and reputation
  • Continue to educate yourself on new techniques and tools to help you sell more homes

In short, take the time to sell more homes and put all of your efforts into the process. The more homes you sell, the more skills you will develop. And in doing so, you should be able to start selling properties that can lead to even larger commissions – and drive up your annual salary in the process.

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