Everything You Need to Know About Real Estate Agent Salaries

Everything You Need to Know About Real Estate Agent Salaries

by The CE Shop Team

Learn Real Estate Salaries by Location & How Commission Works

Limitless earning potential, along with only needing a high school diploma to get a real estate license, is one of the main reasons that people choose to join the real estate industry. Like most industries, however, earners in the highest percentile often have many years of experience. Still, the average salary of these professionals is more than enough for many to seek real estate agent jobs. So, how much do real estate agents actually make?

The short answer is: it depends. There are multiple factors that play into an agent's salary, but the most important is your location. Where you practice real estate is usually the determining factor on how much you can make. Places where the cost of living is high fetch higher asking prices for properties, which translates into larger commission checks and higher annual salaries for the real estate professionals who live there. Of course, that means the market is also more competitive and your cost of living is higher, too. This easy-to-follow guide outlines what you need to know about real estate agent salaries and how much you could make in your state.

How Much Do Real Estate Agents Make in Each State?

As noted above, your salary as a real estate agent really depends on where you live. The hotter the market, the more you can earn. According to ZipRecruiter, the national average real estate agent salary is $83k a year, though the local cost of living should be factored in to truly understand the local earning potential. The cost of living, defined as the amount of money needed to sustain a certain standard of living by affording basic needs such as housing, food, and healthcare, directly correlates to real estate salaries.

With that in mind, how much does a real estate agent make in your state? Here’s a breakdown of each state, its cost of living index (measured on a 100 point scale representing the average, so a score of 90 means the cost of living in that state is 10% lower than average), and how much real estate agents make throughout the country.

States with Real Estate Agent Salaries Between $60,000-$79,999

State Salary Cost of Living Index
Kentucky $79,502 90.9
South Dakota $79,315 99.8
New Jersey $79,143 125.1
West Virginia $79,047 91.1
Pennsylvania $78,665 101.7
South Carolina $78,257 95.9
Minnesota $78,186 101.6
Oregon $77,997 134.2
Delaware $77,986 108.1
Tennessee $77,931 88.7
Colorado $77,882 105.6
Montana $77,825 106.9
Ohio $77,369 90.8
Wisconsin $77,185 97.3
Arizona $77,024 97
Kansas $76,692 89
Utah $76,658 98.4
Indiana $76,530 90
Oklahoma $76,409 87
Idaho $76,193 92.3
Maine $76,136 117.5
Louisiana $75,826 93.9
Iowa $75,045 90.1
Georgia $74,305 89.2
Texas $73,451 91.5
New Mexico $73,292 87.5
Michigan $73,107 88.9
Arkansas $73,053 86.9
Illinois $72,655 94.5
Alabama $72,566 89.3
Mississippi $71,832 86.1
Missouri $71,663 87.1
Florida $70,034 97.9
North Carolina $66,687 94.9

States with Real Estate Agent Salaries Between $80,000-$90,000+

State Salary Cost of Living Index
New York $90,928 139.1
Massachusetts $90,068 131.6
Washington $89,440 110.7
New Hampshire $87,658 109.7
Hawaii $86,504 192.9
Maryland $83,472 129.7
Connecticut $83,446 127.7
Rhode Island $82,767 119.4
Alaska $82,660 129.9
Vermont $82,317 114.5
Nebraska $82,213 90.8
Nevada $82,011 108.5
North Dakota $81,701 98.8
Wyoming $81,630 89.3
California $81,498 151.7
Virginia $81,135 100.7

The Top 10 Highest Paying Cities For Real Estate Agents

What about specific cities and how much real estate agents make there? Again, the hotter the market, the higher the real estate agent salary. Here are the top highest paying cities for real estate agents, according to ZipRecruiter. To the surprise of no one, six of the top 10 highest paying cities for real estate agents come from California.

State Salary
San Francisco $97,047
Santa Rosa, Calif. $93,299
Seattle $89,995
Boston $89,553
Washington, DC $89,440
Los Angeles $87,773
Orange County, Calif. $85,166
Chicago $84,862
San Diego $84,724
Sacramento $84,436

Understanding Real Estate Commission 

Now that you know much you can make as a real estate agent, you’re probably curious about how real estate commission works. In the most general sense, real estate commissions determine your income. That means having a “base salary” is rare for real estate agents. How much you make is determined by the size and number of the transactions in which you’re involved. The more transactions you undertake, the more money you’ll often make.

The United States Department of Housing and Urban Development (HUD) established a 6% commission to sell houses, which is then split between the buyer’s agent and the seller’s agent. That leaves you with roughly 3% of the sales price, which, with a median U.S. home price of $227,000, equates to a $6,810 commission before brokerage costs and taxes. Of course, unless you're the real estate Broker, your real estate brokerage also takes a cut of your commissions. How much they take will vary from brokerage to brokerage. 

How Long Before You Start Making Money as a Real Estate Agent?

In order to start making money as a new agent, you must first meet all of the licensing requirements in your state. The process varies based on where you live, so it’s important to know your specific requirements. For more information, check out our Pre-Licensing offerings. You'll start earning money as soon as you're fully licensed and working underneath an Employing Broker. The rest is up to you.

If this is a full-time job, you can devote the hours needed to have more transactions and thus make more money as a real estate agent. If you’re a part-time real estate agent, you can make enough to stow away in your savings. Either way, the real estate industry offers boundless earning potential for those who value hard work and possess an entrepreneurial spirit.