Real estate

How Much Money do Real Estate Agents Make?

How Much Money do Real Estate Agents Make?


Many people believe that all real estate agents make a lot of money, but in some cases that isn’t true.  In others it is.  Here we will take a look at how commissions work and how much money a real estate agent makes.  


Most Income is Commission-Based


Most licensed real estate agents work on a commission basis. They earn a commission based on the sales prices of the homes they help people buy, sell, or rent. Some real estate agents have other jobs and only work in their real estate businesses part-time. It’s very likely that these agents don’t earn very much money at all. The majority of successful agents are full-time real estate agents. These agents depend on their income to pay for their housing, food, clothing, and other bills. Full-time real estate agents can make somewhere in the six-figure range or even millions of dollars a year. It all depends on how hard they work and what they do to get business. The most successful real estate agents have real estate coaches.


Commission Explained


Real estate brokerage companies actually receive the commissions their agents earn. Real estate agents cannot receive their commissions directly. A real estate commission is typically a percentage of a sale. Sometimes the commission is a set dollar amount. This is more typical with rentals. Commissions can be earned from a seller’s sale, a buyer’s sale, or a rental. There is no set commission percentage or amount. Commissions are not set by law and are always negotiable. Real estate brokerage companies usually get somewhere between two to three percent commission for a buyer’s sale and between one percent to three percent for a seller’s sale. For rentals, the total commission charged to a landlord is usually approximately one month’s rent. Real estate agents have to split their commissions earned with their brokerage companies. New agents might split their earned commissions on a 50/50 basis with their company. This is because they need more help and training with their transactions. More experienced agents might be able to negotiate that they keep 80% of their earned commissions or more.


Commission Example


Let’s say a real estate agent sells a house for $300,000. If the agent makes three percent in commission, he will make nine thousand dollars for that sale. If the agent is able to sell a home like this every month, he will make $108,000 in commissions that year. That’s nine thousand dollars times twelve months. Many real estate agents don’t have systems in place to help increase their leads, their lead conversion rate, and their sales. It is proven that agents will earn more money if they have systems in place. If a real estate agent hires a coach who teaches the agent systems to put into place, he may be able to double or triple his earnings. This means the agent will now be making $216,000 or $324,000.


Hiring a Real Estate Coach


Real estate coaches have proven systems. If a real estate agent hires a coach, he will be able to maximize his leads, increase his leads conversion rates, and increase his sales. In turn, this agent will make more money. Real estate coaches have time management systems in place to help agents do their work on a schedule so they have more time for themselves or for their families. Some real estate coaches claim they can help agents earn up to twice or three times what they are currently making. Some claim they can help agents earn up to ten times the real estate industry average.


Systems That Work


Once an agent has his daily systems in place, he will be able to generate and capture more leads and nurture his relationships better. When an agent works on a system basis, the typical workday might begin at 5 am. The agent may start his day by taking care of himself and his family. This might include praying and meditating, exercising, showering, having a healthy breakfast with his family, and doing a couple of things around the house.

If he does these activities all before 8 am, he’s set up for a very productive workday. At 8 am the agent should work on lead generation by emailing the number of people his coach has him scheduled to email, call people, get mailings ready for the day, and so on. Then, he will work on nurturing the relationships he already has with phone calls, texts, and emails. The agent will work with his current clients on their purchases and sales. It’s important to set up a time block during the day to go on out-of-office appointments such as listing appointments, showing buyers homes, inspections, and so forth. At the end of the day, the agent is able to go home, have a nice dinner with his family and enjoy the evening. Some evenings might have to include working if some clients cannot meet during the day. Working nights and weekends on occasion is typical in the real estate business.


It is proven that real estate agents who work full-time, have systems in place, and work with a real estate coach will make more money. Real estate can be a very lucrative business to be in. Hard work and determination is the key to success.