How to Pay the Real Estate Agent a Salary


Most real estate agents are paid a commission on the sale of a property. This fee is typically between 5% and 6% of the home’s final sales price and split equally between the seller’s agent and the buyer’s agent. The commission rate is always negotiable, however, so it can be worth trying to negotiate with the agent you are considering hiring.

As a result, many agents are willing to work for a lower commission than what is typical, especially if they are able to sell your home quickly and at a good price. You can also hire an agent that charges a flat fee for their services, which may save you money as well. Read more

Often, the broker receives most of the total real estate commission amount and then pays the agents their portion of that. This can vary between brokerages, and there is a wide range of broker commissions available, from 30/70 to 90/10. Ultimately, the broker is responsible for collecting and paying out the commission to the agents and will want to ensure that they are receiving a fair amount of the overall sales price.

For example, if the home sells for $300,000 and the agent is on a standard 6% commission, that will give them $18,000. Adding in the cost of other expenses such as the Multiple Listing Service (MLS) fees, advertising, and other business-related costs can cut into an agent’s commission earnings quite significantly. This is why it is important to make sure that the total selling price for the property is accurate and not inflated.

In addition, many factors can impact the selling price of a home, such as whether the buyer is working with a lender who is offering a mortgage credit or rebate. The final sales price will often be adjusted to reflect these credits, which can greatly impact how much an agent will earn on a sale.

In addition to these expenses, it is important to note that most agents do not get paid weekly or biweekly, instead getting one lump sum payment upon closing. As a result, many agents are forced to rely on savings or loans for living expenses while they are waiting on the sale of their properties to close and their commission checks to come in. While it is possible to pay an agent a salary as opposed to commission, this is rare and will likely only happen for highly experienced agents who have a solid track record of closing deals. For most, negotiating a lower commission will be the best way to help them afford to live and continue providing exceptional services for their clients.


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