If you’re considering a career in real estate, one of the burning questions on your mind is likely, “How much do real estate agents make?” As of January 2024, Zip Recruiter reports that the average income for real estate agents in the United States is $85,793. However, before diving into the industry, it’s crucial to understand the various factors that contribute to this figure and what it truly means for aspiring real estate professionals.
Understanding the Numbers
Before assessing the annual income, it’s essential to grasp a few key concepts that influence how much a real estate agent takes home:
- Independent Contractor Status:
- 87% of Realtors operate as independent contractors.
- As an independent contractor, you essentially run your own business, necessitating the management of taxes, operating budgets, and licensing fees.
- Gross Commission Income (GCI):
- The reported average income of $85,793 is the Gross Commission Income.
- GCI represents the amount before taxes, expenses, and fees are deducted.
- Typically, about 30% of GCI is paid in taxes, varying based on state income brackets.
- Brokerage Fees:
- Traditional brokerages often charge fees, such as caps or desk fees.
- These fees are a percentage of each commission, potentially reaching over $30,000 annually.
- Transaction fees and additional charges may also apply.
Calculating Net Commission
After factoring in taxes and fees, the average real estate agent’s net commission, or take-home pay, is approximately $25,738 per year.
State-by-State Breakdown
To offer a more detailed perspective, here’s a breakdown of annual salaries, monthly pay, weekly pay, and hourly wages for real estate agents across various states :
| State | Annual Salary | Monthly Pay | Weekly Pay | Hourly Wage |
| Washington | $100,261 | $8,355 | $1,928 | $48.20 |
| Delaware | $93,913 | $7,826 | $1,806 | $45.15 |
| Virginia | $92,296 | $7,691 | $1,774 | $44.37 |
| Maryland | $90,887 | $7,573 | $1,747 | $43.70 |
| New York | $90,773 | $7,564 | $1,745 | $43.64 |
| Vermont | $88,900 | $7,408 | $1,709 | $42.74 |
| Nebraska | $88,762 | $7,396 | $1,706 | $42.67 |
| Oklahoma | $85,960 | $7,163 | $1,653 | $41.33 |
| California | $85,825 | $7,152 | $1,650 | $41.26 |
| Massachusetts | $84,775 | $7,064 | $1,630 | $40.76 |
| Alaska | $84,024 | $7,002 | $1,615 | $40.40 |
| Maine | $83,600 | $6,966 | $1,607 | $40.19 |
| Pennsylvania | $83,146 | $6,928 | $1,598 | $39.97 |
| Oregon | $82,873 | $6,906 | $1,593 | $39.84 |
| North Dakota | $82,840 | $6,903 | $1,593 | $39.83 |
| Idaho | $82,265 | $6,855 | $1,582 | $39.55 |
| New Jersey | $82,215 | $6,851 | $1,581 | $39.53 |
| Texas | $81,859 | $6,821 | $1,574 | $39.36 |
| Colorado | $81,325 | $6,777 | $1,563 | $39.10 |
| Hawaii | $81,292 | $6,774 | $1,563 | $39.08 |
| Wisconsin | $81,220 | $6,768 | $1,561 | $39.05 |
| New Hampshire | $80,974 | $6,747 | $1,557 | $38.93 |
| Wyoming | $79,478 | $6,623 | $1,528 | $38.21 |
| Nevada | $79,448 | $6,620 | $1,527 | $38.20 |
| South Dakota | $78,292 | $6,524 | $1,505 | $37.64 |
| Indiana | $78,272 | $6,522 | $1,505 | $37.63 |
| Minnesota | $78,217 | $6,518 | $1,504 | $37.60 |
| New Mexico | $78,023 | $6,501 | $1,500 | $37.51 |
| Rhode Island | $76,762 | $6,396 | $1,476 | $36.90 |
| Arizona | $76,653 | $6,387 | $1,474 | $36.85 |
| Ohio | $76,097 | $6,341 | $1,463 | $36.59 |
| Montana | $75,499 | $6,291 | $1,451 | $36.30 |
| Connecticut | $75,032 | $6,252 | $1,442 | $36.07 |
| Illinois | $75,016 | $6,251 | $1,442 | $36.07 |
| Iowa | $74,625 | $6,218 | $1,435 | $35.88 |
| Alabama | $74,556 | $6,213 | $1,433 | $35.84 |
| Mississippi | $74,380 | $6,198 | $1,430 | $35.76 |
| Tennessee | $72,652 | $6,054 | $1,397 | $34.93 |
| Utah | $72,597 | $6,049 | $1,396 | $34.90 |
| Missouri | $72,444 | $6,037 | $1,393 | $34.83 |
| South Carolina | $71,696 | $5,974 | $1,378 | $34.47 |
| North Carolina | $70,217 | $5,851 | $1,350 | $33.76 |
| Kansas | $70,029 | $5,835 | $1,346 | $33.67 |
| Georgia | $69,455 | $5,787 | $1,335 | $33.39 |
| Louisiana | $68,291 | $5,690 | $1,313 | $32.83 |
| Michigan | $67,394 | $5,616 | $1,296 | $32.40 |
| Kentucky | $67,331 | $5,610 | $1,294 | $32.37 |
| West Virginia | $64,214 | $5,351 | $1,234 | $30.87 |
| Arkansas | $64,013 | $5,334 | $1,231 | $30.78 |
| Florida | $61,467 | $5,122 | $1,182 | $29.55 |
So…how much do real estate agents make?
While the average gross commission for real estate agents is around $85,000, it’s essential to recognize that their net income, after taxes and expenses, is closer to $25,000 to $30,000. Aspiring real estate professionals should carefully consider these financial aspects before entering the industry, understanding that success in real estate is not only about closing deals but also effectively managing business finances. Whether you’re attracted to the industry for its potential earnings or the thrill of helping clients find their dream homes, a clear understanding of the financial landscape is key to building a successful career in real estate.
Did you like this content?
You may also enjoy: Top Six Tax Hacks from Lisa Brumm
