How Much Do Realtors Make?

Realtors® help people navigate the process of buying, selling, or renting residential and commercial properties. Demand for real estate professionals is steady and will likely grow at two percent through 2033 [1]. However, your employment options and salary can vary depending on the strength of the real estate market in your area.

Real estate careers can be lucrative, but you'll find it helpful to understand how much a Realtor makes, how commissions work, and which factors impact your salary most. Read on to explore how much you might earn in this profession and what you can do to increase your income to earn the maximum Realtor salary.

What is a Realtor?

A Realtor is a real estate agent or broker who is also a member of the National Association of Realtors (NAR). As real estate professionals, they help people or organizations buy, sell, and rent properties by sharing information about market conditions, researching and showing available properties, marketing properties, and more. In this role, you may provide the following services:

• Research available properties

• Research the market to help buyers and sellers set prices and budgets

• Help stage a home for photographs or an open house

• Create marketing materials to promote properties

• Present purchase offers and negotiate the terms of the sale

• Prepare documents

• Follow up to ensure all contract terms are met

Realtors typically focus on a broad area, such as residential or commercial real estate. Within those categories, you can specialize in sales, leasing, or property management. For example, you may work with first-time home buyers, luxury home sellers, corporate relocations, or shopping center investors. You can find Realtors in many industries, including residential housing, construction, land development, industrial properties, and more. 

How much do Realtors make?

According to Lightcast™, the average salary for a real estate agent is $99,178 per year [2]. The Close reports an average salary of $90,506 based on its proprietary salary database tool [3]. Average salaries range from $71,901 in Montana to $108,620 in Kansas [3].

What is the average real estate agent salary? 

According to various job listing sites, the average salary for real estate agents ranges from $56,620 to $144,587 per year. The chart below shows the variation in reported salaries.

Since most real estate agents work on commission, these numbers tell only part of the story. First, they include salaries of real estate agents who may not be members of the NAR. Second, real estate agents who work in markets with high sale prices typically earn more money than those in slower markets. Your take-home pay will likely fluctuate depending on local market conditions.

Real estate agent salaries by location: Top 5 highest-paying cities 

According to BLS, the metropolitan area with the highest paying real estate agents is Midland, Texas, followed by regions in California and the northeastern United States. The following chart highlights the average wage in these regions [8].

How do Realtors earn money?

As a Realtor, you earn money through commissions from the properties your clients buy and sell. Your commission is calculated as a percentage of the property's sale price—typically between two and five percent [9]. The buyer's agent and seller's agent split this commission, and your brokerage will also keep a portion of your share. Your brokerage may offer a graduated commission split, which lets you keep a larger percentage of the commission if you meet performance goals.

Realtor expenses

You incur various expenses as part of your job, including licensing, transportation, and website development. Since you are technically a sole proprietor or independent contractor, even when working with a brokerage, your broker or franchise may help cover certain expenses required to do your job. The good news, though, is that you can deduct many of these expenses when it's time to do taxes.

Common Realtor expenses include: 

• Licensing fees

• Membership fees to NAR and other professional organizations

• Multiple listing service (MLS) dues

• Continuing education courses 

• Marketing and advertising efforts

• Transportation 

• Office equipment and supplies 

Factors that affect salary

Several factors can affect your salary as a Realtor, including location, experience, and education. Your motivation and the types of properties you work with also influence how much money you make. Understanding these factors can help you prepare 

Motivation 

Your motivation as a real estate agent can have a significant factor in your earnings since you set your hours and decide how many clients to take on. The real estate business allows for a flexible work schedule, enabling you to work as many or as few hours per week as you want. This flexibility means you can increase your potential income by working with more clients, showing more properties, and putting in more hours. For example, according to the McKissock Learning 2022-2023 Real Estate Income Report, the salary difference between an agent who works fewer than 20 hours per week and one who works more than 40 hours is almost $70,000 per year [10].

Education

While you only need a high school diploma or GED to enroll in real estate courses and pass a state licensing exam, further education can impact your earnings. Licensure requirements vary by state; in some states, a bachelor's degree can substitute for pre-licensing courses. More than half of all Realtors have a college degree, and advanced degrees may be necessary for specializations such as commercial real estate [11]. Specializing in areas like commercial properties or luxury real estate can increase your earning potential.

Experience

Experience and reputation significantly affect your salary. The longer you work as an agent, the more money you typically earn. According to the McKissock Learning 2022-2023 Real Estate Income Report, agents with more experience report higher earnings [10]:

Industry

Specializing in certain areas of real estate can lead to higher earnings. Agents working in commercial real estate or focusing on high-paying specializations like eco-friendly properties, luxury real estate, or foreign investments tend to earn more. According to the Bureau of Labor Statistics, the highest-paying industries for real estate agents include: 

• Management, scientific, and technical consulting services: $150,870 [8]

• Oil and gas extraction: $132,340 [8]

• Coal mining: $110,390 [8]

• Management of companies and enterprises: $110,350 [8]

• Natural gas distribution: $109,080 [8]

Location

Your location directly impacts your potential earnings due to varying housing markets. Realtors in cities with higher property values and living costs, such as New York or San Francisco, generally earn more than those in lower-cost areas. The top five highest-paying states for real estate agents are:

Consider this list of the top five highest-paying states for real estate agents: 

• New York: $112,080 [8]

• Vermont: $100,750 [8]

• Connecticut: $84,810 [8]

• New Jersey: $82,490 [8]

• Alaska: $81,720 [8]

Job outlook

According to BLS, the professions of real estate agents and sales brokers can expect a two percent growth rate from 2022 to 2032 [1]. BLS projects the industry to add an additional 46,000 job openings each year during this 10-year span [1]. A major factor fueling this moderate growth is growth in the housing market.

Getting started with Coursera

Realtor salaries are influenced by motivation, education, experience, industry specialization, and location. Understanding and strategically managing these elements can help you maximize your earnings and achieve greater financial success in the real estate market.

Start building the skills you'll need to be successful in a real estate career. Consider enrolling in personal and professional development courses like Successful Negotiation: Essential Strategies and Skills to explore psychological tools and negotiation strategies. Or take a look at the Entrepreneurship Specialization offered by Wharton Online on Coursera to learn more about how to develop and manage a business.