Real estate is often described as a career with unlimited earning potential. While that can be true, income varies dramatically from one agent to another. Some agents struggle to make consistent income, especially early on, while others build six-figure or even seven-figure businesses over time.

This guide explains how real estate agents are paid, what average income looks like at different career stages, how commissions work, common expenses, and what separates high earners from the rest. The goal is to provide realistic expectations for anyone considering or currently working in real estate.

Income in real estate is also “lumpy.” You might work weeks without a paycheck and then earn a large commission when a deal closes. That’s why many agents focus on building predictable lead pipelines and keeping a financial cushion for slower months. Understanding how commissions, splits, and expenses work helps you estimate your net income—what you actually keep after the business costs.

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Average Real Estate Agent Income

Real estate agents are rarely paid a traditional salary. Most earn income through commissions when properties are bought or sold. Industry data often cites a median annual income around $50,000, but this number masks a very wide range of outcomes.

Many agents earn less than the median, particularly in their first few years. At the same time, top-performing agents earn significantly more, which pulls the average upward. Income depends on market conditions, location, experience, and personal work habits.

Remember the difference between gross commission and take-home pay. Expenses and brokerage fees can make two agents with the same gross income end up with very different net results.

Entry-Level Real Estate Agent Earnings

The first year in real estate is typically the most challenging. New agents must build a client base, learn contracts and negotiations, and develop consistent lead-generation habits. During this phase, income is often unpredictable.

Many entry-level agents earn between $30,000 and $40,000 in their first year, and some earn less. Those who treat real estate like a full-time business and seek mentorship tend to progress faster.

Many new agents underestimate the time it takes to get paid. You may help a client house-hunt for months, write multiple offers, and only earn income when the transaction closes. For that reason, early success often comes from daily prospecting habits, consistent follow-up, and working open houses or showing opportunities that create fast experience.

Many new agents reduce the “income gap” by joining a team or working high-activity lead sources like open houses. Mentorship can shorten the learning curve.

Mid-Career and Experienced Agents

After several years, many agents experience more stable income as referrals increase and systems improve. Experienced agents commonly earn between $60,000 and $100,000 per year.

Specializing in a niche—such as luxury homes, relocation clients, or investors—often increases both efficiency and earning potential. Repeat clients and referrals reduce marketing costs and create predictable deal flow.

At this stage, many agents start thinking like operators: they refine their listing presentation, systematize follow-up, build vendor relationships (lenders, inspectors, photographers), and dial in a repeatable marketing plan. The result is usually a steadier pipeline and fewer “dry spells.”

Top Producers and High Earners

Top-producing real estate agents can earn $150,000, $250,000, or more annually. These agents typically operate in high-value markets, close a large number of transactions, or both.

High earners usually invest heavily in marketing, branding, and systems. Many build teams or partner with other professionals to scale beyond what a single agent can handle.

In addition to volume and price point, top producers often win on speed and service. They respond quickly, track metrics, follow a documented sales process, and stay visible in their community. Many also invest in brand assets—professional photos, consistent signage, social proof, and client testimonials—to keep referrals flowing.

Some high earners also build teams or long-term referral systems. The common thread is treating real estate as a business.

How Real Estate Commissions Work

Commissions are typically calculated as a percentage of the home’s sale price. A common total commission is 5%–6%, which is usually split between the buyer’s agent and seller’s agent.

For example, a $400,000 home with a 6% commission generates $24,000 in total commission. That amount is divided between agents and then further split with their brokerages.

Net example: if your side is $12,000 and your split is 70/30, you keep $8,400 before taxes and expenses. After marketing, photos, and admin costs, your net is lower—so track expenses and know your split.

Brokerage Commission Splits

New agents often start with splits such as 70/30 or 80/20, where the agent keeps the larger portion. As agents gain experience and production, they may negotiate better terms or move to brokerages with different fee structures.

Some brokerages use alternative models like a monthly desk fee, a transaction fee, or a “cap” structure where the agent pays the brokerage until they reach a yearly cap and then keep a higher percentage. The best model depends on your production and your need for support, leads, and training.

Expenses That Affect Net Income

Real estate agents are typically independent contractors, meaning they cover business expenses themselves. These costs can significantly reduce take-home income.

Don’t forget hidden costs: mileage, client gifts, staging consults, lockboxes, sign installation, photography, and subscription tools. If you’re evaluating income potential, estimate expenses as a percentage of gross commission—new agents may spend less, while growth-focused agents may reinvest heavily.

• Licensing and renewal fees
• MLS and association dues
• Marketing and advertising
• Continuing education
• Technology and CRM tools

Successful agents track expenses carefully and treat real estate as a business, not just a sales job.

Resources to Increase Earning Potential

Education and skill development are critical in real estate. Many agents invest in books, courses, and tools to improve sales, negotiation, and prospecting skills.

The fastest way to increase income is usually not “working more hours”—it’s improving conversion: better scripts, better follow-up, clearer client communication, and stronger negotiation. Many agents also use structured learning resources to build those skills. For example, an exam prep guide can shorten the licensing ramp-up, while communication and prospecting books help you build daily habits that lead to consistent closings.

• National Real Estate Salesperson License Exam Prep Guide
• Exactly What to Say for Real Estate Agents (Audible)
• Fanatical Prospecting (Audible)
• Never Split the Difference (Audible)

FAQ

Do real estate agents make a salary?

Most do not. Income is usually commission-based, though some brokerages offer limited salary options.

Can real estate agents earn six figures?

Yes. Many agents earn six figures, but it typically requires consistent effort, experience, and strong systems.

Is real estate a good long-term career?

For individuals who enjoy sales, flexibility, and working with people, real estate can be a rewarding long-term career.

How long does it take to make good money in real estate?

Many agents need 6–18 months to build consistent income. The timeline depends on how quickly you generate leads, your ability to follow up, and whether you have mentorship or team support. A steady routine usually matters more than “talent” early on.

What is a realistic first-year income expectation?

First-year income can be modest and uneven. Some agents earn under $30,000 while building their pipeline, and others earn more if they join a team, work high-transaction niches, or have a strong personal network. A financial cushion helps you stay consistent until closings become regular.

Do listing agents make more than buyer’s agents?

Often, yes—listings can create leverage because one listing may generate multiple buyer leads and future referrals. However, buyer specialists can earn excellent income in active markets with strong systems and high conversion.

What is the difference between gross commission and net income?

Gross commission is what the transaction produces before splits, taxes, and expenses. Net income is what you keep after paying your brokerage split, business costs (marketing, dues, tools), and taxes. Net income is the number that matters most for budgeting.

What expenses surprise new agents the most?

MLS dues, association fees, insurance, marketing costs, and technology subscriptions are common surprises. Many new agents also underestimate mileage and the cost of staying visible—signs, photos, client events, and small gifts.

Can you earn money in real estate without selling homes?

Yes. Some licensed professionals focus on referrals, rentals, property management (depending on state rules), or support roles on teams. Others build related businesses like staging, photography, or transaction coordination. But the traditional agent model is commission-based sales.

What skills separate top producers from average agents?

Consistent prospecting, strong follow-up, clear communication, market knowledge, and negotiation skill are the big ones. Top producers also track numbers (calls, appointments, conversion rate) and run their business with systems and accountability.