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.
