How Much Do Real Estate Agents Make? (My FIRST YEAR EARNINGS)

In this video we'll go over how much real estate agents make, how real estate agents are paid and what I made my first year as a real estate agent!

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Based on data from the Bureau of Labor and Statistics, the average annual wage of a real estate agent in 2020 was $62,060 and that’s pre-tax. With an industry or career, especially in sales, that number can drastically different and you’ll see agents making less than 5 figures and more than 7 figures.

Agents are paid based on commission which is typically a percentage of the sales price. The industry norm is around 5-7% total, but fluctuates based on the market and is determined based on the commission rate agreed upon by the listing agent and the seller. Now of this percentage usually half goes to the agent representing the seller and half goes to the agent representing the buyer. That ends up being about 3% for each side. Now sometimes one agent will represent both sides to the transaction and will typically take a reduced commission.

Let’s take an easy example using a $100,000 house with a commission agreement of 6% with 3% going to the listing agent and 3% going to the buyers agent. The total commission in this example would be $6,000 and If I’m the buyers agent I would make $3,000 total for this home sale.
But that’s not exactly the take home, there are fees that get paid back to the brokerage too...most brokerages will have a commission split that the agent pays to the brokerage. Lets say for this example the agent/broker commission split is 60/40.

So of that $3,000 the agent gets 60%, coming out to $1,800.
A lot of the time this commission split to the broker will be a tiered system. Once you made enough commissions to pay your broker, lets say $5,000, then the split will become 70/30 and maybe the next is 80/20…and so on, with sometimes the potential to take home 100% with no split.
But it doesn’t always stop there...there could be other marketing fees, franchise fees, insurance fees and desk fees that the agent has to pay to their brokerage after the split. For this example we’ll say these fees come out to about 8% of the post split commission.

This leaves the agent with a net commission of $1,656. That’s the take home for this particular scenario...but that doesn’t include any of the agents expense or taxes...that could take another 20-40% off that net commission.

Now that we’ve covered the basics of what real estate agents make and how they get paid, I want to share with you what I made during my first full year in real estate...

Check out the video to find how what my yearly earnings were!

Thank you so much for watching and please like, subscribe and leave a comment letting me know what you though of the video! :)

Видео How Much Do Real Estate Agents Make? (My FIRST YEAR EARNINGS) канала Braylon Hanson