Market conditions, property values, customer demands, and commission structures are just a few of the many moving components that make up the real estate sector. How much a real estate agent makes per sale in various markets is one of the most frequently asked questions, particularly by prospective agents or inquisitive homeowners. The answer isn’t always straightforward because it depends on a number of variables, such as the brokerage agreement, average home price, and geographic area.
Real Estate Agent Commission: A Market-by-Market Comparison
Although they are not paid a set amount for each sale, agents usually receive commissions, which are typically between 5% and 6% of the sale price. The buyer’s and seller’s agents, as well as their respective brokerages, typically split this commission.
Look at the table below to get a better idea of what this means in practical terms. Based on average home prices and a 6% commission rate, which is divided between buyer and seller agents, it compares the estimated earnings of real estate agents per sale in various U.S. housing markets.
| City/Region | Average Home Price | Total Commission (6%) | Agent Share (Half) | Agent’s Take After Broker Split (70%) |
| San Francisco, CA | $1,300,000 | $78,000 | $39,000 | $27,300 |
| Dallas, TX | $450,000 | $27,000 | $13,500 | $9,450 |
| Miami, FL | $600,000 | $36,000 | $18,000 | $12,600 |
| New York City, NY | $950,000 | $57,000 | $28,500 | $19,950 |
| Phoenix, AZ | $420,000 | $25,200 | $12,600 | $8,820 |
| Chicago, IL | $380,000 | $22,800 | $11,400 | $7,980 |
| Atlanta, GA | $350,000 | $21,000 | $10,500 | $7,350 |
This table makes it abundantly evident that an agent’s location has a significant impact on their earnings per sale.
What Determines an Agent’s Earnings Per Sale?
The amount of money a real estate agent makes from a single sale depends on a number of factors. Let’s dissect these.
Price of a Home Sale
The cost of the house is the most evident factor. The commission for a $1 million luxury property is significantly higher than that of a $200,000 starter home. Agents in high-value markets will therefore earn more money per sale.
Rate of Commission
The typical rate is between 5% and 6%, but it can vary. Agents may offer lower rates to draw clients in slower markets or in areas with more competition. On the other hand, luxury listings or unusual properties may warrant a higher price.
Brokerage Dissolution
Most agents must split their commission with their brokerage. Although seasoned agents may bargain for better terms or work as independent brokers, the most common splits are between 50/50 and 70/30 (agent/broker).
The Agents of the Buyer and the Seller
Although the work and strategies involved are different, both positions have the potential to generate commissions. Usually, buyer’s agents take care of paperwork, negotiations, and property tours. Pricing, staging, marketing, and closing deals are the main priorities of seller’s agents.
High-Earning vs. Low-Earning Markets
There is a noticeable difference in per-sale earnings between smaller towns or rural areas and major cities with thriving real estate markets.
High-Profit Marketplaces
The City of New York
San Francisco
Los Angeles
Seattle
Higher commissions per transaction result from the higher sale prices in these areas. But because of the intense competition, agents might put in more hours to close deals.
Markets with Low Earnings
- Midwest rural areas
- Southern states’ small towns
- Suburban areas with less competition
Because of the lower home prices in this area, each sale brings in less money. On the other hand, the pace might be easier to control and operating costs are lower.
How Often Do Agents Close Sales?
A real estate agent’s earnings per sale are only half the story. You also need to know how many sales they can actually close in a year.
In a hot market, a very active agent may close between 30 and 50 homes a year. Five to ten may be closed by a part-time agent. A clearer picture of annual income is obtained by combining volume and per-sale earnings.
Do Real Estate Agents Get Paid If a Sale Falls Through?
In general, no. Only after a sale closes do agents receive payment. The agent doesn’t get paid for their time and effort if a deal falls through because of inspection problems, financing issues, or client reluctance.
Because the position is “commission-only,” successful agents put in a lot of effort, handle several leads concurrently, and make marketing and networking investments.
How Agents Can Increase Their Earnings
A real estate agent can increase their per-sale revenue in a number of ways:
- Focus on luxury real estate.
- Work in urban markets with rapid growth.
- Work out a better broker split.
- Create a robust network of referrals
- Obtain licenses or certifications (commercial real estate, for example).
Some agents even branch out into allied fields like real estate investing or property management.
Final Thoughts
The answer to the question of how much a real estate agent makes per sale in various markets is never universal. Location, home values, commission rates, and brokerage agreements all have a significant impact on earnings. While agents in smaller markets may earn less, they also benefit from lower operating costs and competition. In contrast, agents in luxury or high-demand cities typically earn significantly more per transaction.
A real estate agent’s success depends on a variety of factors, including consistency, strategy, and flexibility, in addition to the amount they make on each sale. Whether you’re interested in becoming an agent or just curious, knowing these market-based distinctions helps you see what’s feasible in this fast-paced, commission-based industry.
Q&A: Frequently Asked Questions
Q: What is the average revenue per sale for a real estate agent?
A: Depending on the home price, commission rate, and broker split, most agents make between $3,000 and $15,000 per sale.
Q: Do agents only receive commissions or do they receive hourly compensation?
A: The majority of residential real estate brokers receive commission-only compensation rather than an hourly wage or base salary.
Q: Is it possible for a real estate agent to make six figures a year?
A: It’s true that agents in high-value markets or with large sales volumes frequently make over $100,000 a year.
Q: Do agents always split the commission 50/50?
A: Not all the time. Depending on the circumstances, brokerages may modify the split or one agent may bargain for a larger share.
Q: Is it mandatory for agents to share their commission with their team?
A: Yes, if you’re on a team. Depending on internal agreements, agents may divide commissions with marketing assistants or team leads.
