How Much Do Real Estate Agents Make?

95% of Real Estate Agents don’t Make Much

If you’re considering a career in real estate sales, you might want to investigate just how much money they really make.  Public opinion is that they make too much.  A 5 % commission might sound like a great deal, but you have to remember their costs. They actually do have to spend a lot of money to market themselves and their client’s properties. They have thousands of other agents to compete against.

The mostly costly fees they face are income tax, brokerage fees, travel costs, advertising and marketing fees, continuing education, and their own accountant fees. Read this article that discusses real estate agent income.

Realtor Income
Research from Dan McCarthy ViralHousingFix shows US Realtor income has dropped substantially.

Most agents don’t earn a great deal, especially in the US. Canadian real estate agents are faring better this year.  What the public doesn’t realize is that most agent make very little and early in their careers, they must struggle. Choosing to become a real estate agent or broker is a tough choice especially during a recession.  Selling homes requires a variety of skills and aptitudes requiring more confidence and determination. The time between sales can be long.  Only someone with spirit and determination can make it. Becoming a teacher, doctor, bus driver, policeman, or government adminstrator might seem much more sensible. And it usually is.

Aside from income tax, much of an agent’s income goes to advertising and marketing expenses. The costs of creating advertising flyers, cards, magazine ads, renting an office, or doing outdoor advertising is phenomenal.  If you saw the actual costs you’d seriously question why anyone would want to gamble at a profession where there is no certain, regular paycheck.  Then consider the work is sales which requires perhaps the greatest maturity and skills of any profession.  If you don’t believe, try to sell something to someone and you’ll understand. And don’t forget the work hours. Forget 9 to 5 workdays. You’re an entrepreneur in this field and you are your business 24 x 7. It requires dedication.

It may only make sense to jump into a real estate career if you intend to be one of the top 5%. They are the ones who can enjoy some discretionary income and who don’t sweat it out.  They may earn profits of 100k to millions per year.

Money is important but money alone cannot create satisfaction with one’s life. The satisfaction agents get from meeting buyers and sellers, selling homes and finishing deals is high on their list.


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