How Much Do Real Estate Agents Make on a Home Sale?

The Big Commission Check

Let us start with the basics. Most people think agents earn a salary. They usually do not. They work on commission. This means they only get paid when a deal closes. If a house sits on the market for six months and never sells, the agent gets paid zero dollars. That is a big risk. When a sale does happen, the total commission has traditionally been around five to six percent of the sale price. But things are changing fast in 2026.

The national average real estate agent commission is currently hovering around 5.57 percent. That is not a hard rule. Commissions are always negotiable. No law says it has to be six percent. But let us stick with the average for a moment. On a house that sells for four hundred thousand dollars, a total commission of 5.57 percent would be roughly twenty-two thousand dollars. That sounds like a nice payday. But here is the catch. That money does not go to one person.

The Broker Split

The slicing does not stop there. A real estate agent cannot just work on their own. They have to hang their license with a broker. The broker is the one who legally oversees the transactions. In exchange for this, the broker takes a cut of every single sale. This is called the "split." This is the part most people forget when they ask how much do real estate agents make.

A common split for a new agent is 50/50. This means the broker keeps half of the commission, and the agent keeps the other half. Let us go back to our example. The agent had eleven thousand dollars from the sale. If they are on a 50/50 split, they give five thousand five hundred dollars to their broker. They are left with five thousand five hundred dollars. That twenty-two thousand dollar check has shrunk dramatically.

The Expenses No One Talks About

We are not done yet. The agent now has their share of the money. But they have bills to pay to get that sale. Agents are independent contractors. They are small business owners. They have to pay for their own expenses. When you ask how much do real estate agents make, you have to subtract the cost of doing business.

Think about what goes into selling a house. The agent pays for the professional photos. They pay for the "For Sale" sign post installation. They pay for the lockbox. They pay for the Facebook ads and the flyers. They also have to pay dues to the local real estate board and the National Association of Realtors. They pay for access to the Multiple Listing Service (MLS) every year. They pay for their own car gas to drive buyers around. They pay for their own health insurance because they do not have an employer providing it.

What Do Real Estate Agents Do for That Money?

You might still be wondering if it is worth it. What do real estate agents do to earn that four or five thousand dollars? It is more than just opening doors. A good listing agent analyzes the market to price the home right. If you price it too high, it sits. If you price it too low, you lose money. They coordinate the staging and photography to make the house look amazing online. Most buyers look online first, so this is critical.

They handle the negotiations. This is the hardest part. When an offer comes in, it is not just about the price. It is about the closing date, the contingencies, and the repairs. A good agent fights for your best interest. They navigate the inspection period where deals often fall apart. They talk to the title company and the lender to make sure the money actually shows up on closing day. It is a high-stress job with crazy hours.

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Real Estate Commission Split Explained in Detail

Let us go deeper into the splits because this varies a lot. The traditional model is the split we discussed, like 70/30. But there are other models. Some agents work for a flat fee brokerage. In this model, they pay the broker a small flat fee per transaction, maybe five hundred dollars. They get to keep the rest of the commission. This sounds great, but usually, these brokerages provide zero support. No office, no training, no leads. The agent is completely on their own.

Then there are teams. You see these "Mega Agent" teams everywhere. If an agent joins a team, the split gets even more complex. The team leader provides the leads. In exchange, the team leader takes half of the agent's commission. Then the brokerage takes their cut from the remaining half. An agent on a team might only see twenty-five percent of the total gross commission. They do this because the team provides a steady stream of clients, which is the hardest part of the job.

How Much Does a Realtor Make Per Sale?

So, how much does a realtor make per sale when you average it all out? For a standard agent doing a standard deal, the net income before taxes is often around 1.5 percent of the home's sale price. If the house sells for three hundred thousand, they might put four thousand five hundred in their bank account before taxes. It is not the massive windfall people imagine.

This is why volume matters. Top real estate agents are not just selling one house a year. They are selling fifty or a hundred. That is how they get rich. But the average agent? The average agent sells fewer than ten homes a year. If you sell six homes a year and net four thousand per home, you are making twenty-four thousand dollars a year. That is poverty level wages for a job that requires you to work weekends and nights.

The Gap Between High and Low Earners

The income gap in real estate is massive. It is a "winner takes all" industry. The top ten percent of agents make ninety percent of the money. When people ask how much do real estate agents make, the answer depends entirely on who you ask. The agent driving the luxury car and wearing the nice suit is in the top one percent. They are selling multi-million dollar homes or doing huge volume. They might make a million dollars a year.

Listing Agent Commission vs Buyer’s Agent Commission

Historically, the listing agent commission and the buyer’s agent commission were equal. It was an even split. Today, we are seeing a shift. Listing agents often have more expenses. They pay for the marketing upfront. They take the risk. So, sometimes listing agents will negotiate a slightly higher fee for themselves.

Buyer's agents have a different challenge. They might drive a client around for months. They might show fifty houses. And then the buyer decides to rent an apartment instead. The buyer's agent worked hundreds of hours for zero pay. That is why buyer’s agent commission is justified. They are paid for the successful completion of a very long process. If they don't find the perfect house, they earn nothing.

Commission After Broker Split

Let us try a specific calculation using a real estate commission calculator logic. Imagine a luxury home sale of one million dollars. The total commission is five percent, which is fifty thousand dollars. The listing agent's side is twenty-five thousand dollars.

The agent is on a 70/30 split. They keep seventy percent of the twenty-five thousand. That is seventeen thousand five hundred dollars. Then they have a franchise fee of six percent off the top to the national brand. That takes another fifteen hundred away. Then they spent two thousand dollars on high-end drone video and staging. Their net pay is fourteen thousand dollars. That is still a great check. But it is a lot less than the fifty thousand the seller paid out.

Who Pays Realtor Commission Now?

The question of who pays realtor commission is the most common one in 2026. Technically, the seller pays the listing agent. The buyer is responsible for the buyer's agent. However, cash-strapped buyers often ask the seller to cover their agent's fee as part of the offer. It becomes a negotiation point.

If you are a seller, you have to decide if you want to pay that extra fee. If you refuse, you might limit your pool of buyers. If you agree, you eat into your profit. This is why low commission real estate agents and flat fee real estate agents are gaining popularity. They promise to list your home for a small set price. It saves money, but you often get less service.

Realtor Take-Home Pay vs Gross Income

Gross income is what the agent puts on their tax return as revenue. Realtor take-home pay is what is left after everything. We talked about business expenses, but we did not talk about self-employment taxes. Agents have to pay both the employer and employee side of Social Security and Medicare. That is an extra 15.3 percent tax on top of income tax.

So, when you see a report saying the average real estate agent commission creates an income of fifty thousand dollars, know that their spendable cash is much lower. They also have no paid vacation, no paid sick leave, and no retirement matching. They have to fund all of that themselves.

How Are Real Estate Agents Paid?

The actual payment process is strict. An agent cannot just take a check from a client. That is illegal. The client writes a check to the title company or the brokerage. The transaction closes. The title company sends the wire to the brokerage. The broker calculates the split, deducts the fees, and then cuts a check or direct deposit to the agent. This can take days after the house is sold. How are real estate agents paid involves a chain of custody to ensure everything is tracked for the IRS.

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Commission vs Salary Real Estate Agent

There is a small trend toward commission vs salary real estate agent models. Some companies like Redfin experimented with paying agents a salary plus a small bonus. This gives the agent stability. They know they can pay rent every month. But the ceiling is lower. They won't make the huge money that a commission-based agent can make in a boom market.

Most agents prefer the commission model. They want the freedom. They want to know that if they work harder, they make more. How much do real estate agents make is theoretically unlimited in a commission model. In a salary model, you are capped by your boss's budget.

Net Commission After Taxes

We need to hammer home the net commission after taxes reality. If an agent earns a gross commission of one hundred thousand dollars in a year, they are not rich. After thirty thousand in business expenses, they have seventy thousand. After self-employment tax and income tax, they might have forty-five or fifty thousand dollars of real spendable money. That is a decent living, but it is not the lifestyle of the rich and famous that TV shows portray.

The Impact of Market Conditions

How much do real estate agents make depends heavily on the economy. When interest rates are low, houses fly off the shelves. Agents make money hand over fist. When rates go up, the market freezes. Agents might go months without a paycheck. They have to save money during the good times to survive the bad times. It is a feast or famine industry.

In a hot market, real estate agent commission percentage might even drop because it is so easy to sell. In a tough market, agents work harder for every dollar. They have to spend more on marketing to find buyers. Their margins get squeezed from both sides.

Final words

So, how much do real estate agents make on a home sale? The answer is not a simple number. It is a series of subtractions. They start with a big number, but they share it with the other agent, their broker, the tax man, and their business expenses. The average agent makes a middle-class income for doing a high-stress job. The top agents make a fortune, but they are the exception, not the rule.

Understanding these numbers helps you as a buyer or seller. You realize that the fee you pay is funding an entire ecosystem of professionals, marketing, and legal protections. It is expensive, yes. But now you know exactly where every penny of that commission goes.

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