Real Estate Agent Salary: How Much Do Agents Really Earn?

Ever wonder why some agents seem to be rolling in cash while others struggle to pay the bills? The truth lies in how commissions, market conditions, and experience all blend together. Below you’ll find a straight‑forward breakdown of what most real estate agent salary looks like in 2025, plus the factors that can swing the numbers up or down.

Key Takeaways

• Nationally, the median annual earnings for a full‑time Real Estate Agent in 2025 hover around $68,000.
• Agents in high‑priced markets like Los Angeles regularly exceed $120,000, while those in lower‑cost regions often stay under $45,000.
• Experience matters: agents with 5+ years typically earn 2‑3× more than newcomers.
• Commission splits, flat‑fee models, and referral fees can change take‑home pay by 10‑30%.
• Working as a licensed broker or team leader adds another income stream beyond personal sales.

Understanding the Core Income Model

Real Estate Agent is a licensed professional who helps buyers and sellers complete property transactions. In the United States, most agents earn money through commissions, which are a percentage of the final sales price. The typical commission rate is 5‑6%, split between the buyer’s and seller’s agents, and then further divided between the agent and their brokerage.

For example, on a $500,000 home sold at a 5% total commission, the $25,000 commission pool is usually shared 50/50 between the listing and selling sides. Each side then splits with the brokerage, often 70/30 (agent/broker). That means the selling agent walks away with roughly $8,750 before taxes.

National Averages and Regional Variations

The National Association of Realtors (NAR) released its 2025 earnings report in June. According to the data:

• Median gross income for full‑time agents: $68,000
• Average gross income: $96,200
• Median sales volume per agent: $2.1 million

These numbers hide dramatic regional gaps. In California, especially the Los Angeles Housing Market, the median gross income tops $115,000 because home prices are roughly three times the national average.

Below is a quick snapshot of earnings by market tier:

How Experience Shapes Earnings

New agents (0‑2 years) typically earn less than $30,000 a year. The steep learning curve means they close fewer deals, and many work part‑time while they build a network.

Mid‑career agents (3‑5 years) often reach $60,000‑$80,000 as they secure repeat clients and negotiate better splits with their brokerage.

Seasoned pros (5+ years) can earn $120,000‑$200,000+, especially if they:

1. Lead a small team and collect a percentage of each team member’s commission.
2. Specialize in luxury properties where a single sale can generate $30,000+ in personal commission.
3. Obtain a broker’s license, allowing them to retain a larger share of the split.

Here’s a concise breakdown:

Commission Structures: Split, Flat‑Fee, and Referral

While the 70/30 split is the industry norm, many brokerages now offer alternative models to attract talent.

• Flat‑Fee Brokerage: Agents pay a fixed monthly fee (often $199‑$299) and keep 100% of commissions. This works well for high‑volume agents but can be risky for newcomers.
• Transaction‑Based Split: The brokerage takes a larger cut on low‑value deals and a smaller cut on high‑value deals. Example: 80/20 on sales under $300k, 70/30 on sales above $300k.
• Referral Fees: An agent who refers a client to another broker can earn 20‑30% of that broker’s commission. This adds passive income without extra client work.

Choosing the right model depends on your average transaction size, volume, and willingness to cover office expenses.

Beyond Commissions: Additional Income Streams

Many agents supplement their earnings with related services:

• Property Management: Collecting monthly rent fees can add $1,000‑$3,000 per managed unit.
• Mortgage Referral Partnerships: Earn a bonus of $500‑$1,000 for each closed loan.
• Continuing Education Workshops: Hosting seminars can bring in $200‑$500 per attendee.

These side streams are especially valuable during market slowdowns when transaction volume dips.

Common Pitfalls that Eat Into Your Paycheck

Even seasoned agents can see earnings shrink when they overlook the fine print.

1. Hidden Desk Fees: Some brokerages charge per‑transaction desk fees (e.g., $150 per sale). Over a year, that can erode $5,000‑$10,000.
2. Continuing Education Costs: California Real Estate License renewals cost $150, plus mandatory courses that add up.
3. Marketing Overheads: Buying leads, signage, and photography without tracking ROI can waste cash.
4. Tax Surprises: Since agents are independent contractors, they must set aside 25‑30% for self‑employment tax.

Tracking expenses in a simple spreadsheet or budgeting app can keep your net income healthy.

How to Boost Your Earnings Starting Today

Ready to move the needle? Here are five actionable steps:

• Negotiate a Better Split: If you close more than 12 deals a year, ask for a 75/25 or 80/20 split.
• Specialize: Luxury homes, investment properties, or first‑time buyer niches often command higher commissions.
• Leverage the Multiple Listing Service (MLS): Master search filters to find off‑market opportunities before competitors.
• Build a Referral Network: Partner with mortgage brokers, attorneys, and contractors to earn referral fees.
• Invest in Personal Branding: A strong Instagram presence or local blog can generate organic leads, reducing paid advertising costs.

Implementing just two of these can push a mid‑career agent’s income into the $90k‑$110k range within a year.

How much does a real estate agent make in Los Angeles?

In 2025, the median gross income for a full‑time Los Angeles agent is about $120,000, driven by the city’s $950,000 median home price and higher commission splits.

Do real estate agents earn a fixed salary?

Almost all agents work on a commission‑only basis. A few large brokerages offer a modest base salary plus commission, but those positions are rare and usually tied to high‑volume sales targets.

What’s the difference between a split and a flat‑fee brokerage?

A split brokerage takes a percentage of each commission (e.g., 70/30). A flat‑fee model charges a fixed monthly or per‑transaction fee while letting the agent keep 100% of the commission.

How do taxes affect a real estate agent’s take‑home pay?

Agents are considered self‑employed, so they must pay self‑employment tax (≈15.3% of net earnings) plus federal and state income tax. Setting aside 25‑30% of gross commissions for taxes is a common rule of thumb.

Can a real estate agent earn money without closing deals?

Yes. Referral fees, property‑management contracts, and education workshops provide supplemental income that doesn’t require a closed transaction.