Salary for Real Estate Agents
Let’s discuss a little about salary for real estate agents are paid as we frequently get asked what the typical real estate agent pay is. The typical US real estate agent will earn between $23,000 and $101,000 per year in 2022, according to Payscale.com, while the top Massachusetts agent will have sold more than $407 *million* worth of property, according to MLS.
It’s generally reasonable to assume that their commissions totaled far more than $101,000. Thus, there is a significant range of potential profits.
The average real estate broker income in the United States is $68,256, according to Salary.com and Indeed.com.
The average commission income received by managing real estate brokers in the US is $42,000 on top of their basic pay, bringing their total annual remuneration to $110,256.
Brokers in California make the highest median pay in the US, $127,556, which includes both salary and commissions.
Also Read: What Is a Buyer’s Agent? Buyer’s Agent Vs. Listing Agent
Average Salary for Real Estate Agents—State-by-State Guide
How Are Brokers In Real Estate Paid?
We are aware that a basic wage and commissions are the two main ways real estate agents make money. Let’s examine where the funds for these categories actually from.
First, a real estate broker’s pay is paid out of the real estate brokerage’s incoming revenue, which is mostly made up of the commissions that the office’s agents get.
This is referred to as a “split” in common parlance. In the US, a typical split is 75/25, which means that the agent keeps 75% of every commission generated and the brokerage receives 25%.
Brokers and brokerages can also make money by billing their agents monthly “desk fees,” which are set costs regardless of whether the agents close deals or not.
Despite being a potential source of income for brokers, the majority of offices who charge a desk fee frequently end up spending almost all of those fees for ongoing expenses like rent, utilities, technology, and so on.
Also keep in mind that you still have the choice to help your own customers with the buying and selling process as a real estate broker. Therefore, as a broker, you would also be compensated for concluding deals on behalf of your customers.
Also Read: Selling Agent vs Listing Agent
Reasons for the High Earnings of Real Estate Brokers (or Low)
You might be wondering, “Why is there such a variety from state to state? ” after looking at the table above, knowing about the median real estate broker pay in your state, and then understanding how a real estate broker gets their money.
Here are some of them
A real estate broker’s total remuneration is mostly based on commissions, therefore it stands to reason that states with higher average selling prices would produce brokers with higher average salaries.
Demand-to-broker ratio: Average real estate wages will be higher in real estate markets with a high demand to broker ratio. Consider Green Bay, Wisconsin, for instance.
The median compensation for real estate brokers in 2018 was $110,820. In 2018, New York City’s median real estate broker compensation was $115,950. In contrast to the near to $950,000 average sold price of a property in NYC, the average sold price of a home in Green Bay was just over $175,000 in 2018.
Why did brokers in Green Bay have a median that was so similar to those in New York City? Competition. Compared to 1,760 in New York City, there were 30 real estate brokers working in Green Bay.
Also Read: Property Seller Disclosure: What is Property Seller Disclosure?
Brokers can choose to purchase and sell or not
Real estate brokers have the option, but not the obligation, to represent their own customers in real estate transactions. Some brokers opt not to so they can concentrate on managing their staff and running their business. Other brokers, on the other hand, decide to keep on representing customers, and these brokers often make more money in direct commissions.
Salary of a Real Estate Broker vs. Agent
Which earns more money, real estate brokers or agents? The response is subject to several considerations. Brokers who manage a sizable brokerage with several agents can make a very good livelihood, especially if they also represent their own clients. Brokers with a small office and little direct customer business, on the other hand, are probably at the bottom of the spectrum.
Real estate agents can earn as little or as much as the market will bear because their annual compensation is solely based on the volume of deals they close.