How Much Do Real Estate Agents Make Off My Home Sale?

You work hard for every paycheck, so you expect your real estate agent to earn all the money you’re paying him to sell your home. After all, you’re not some corporation, you’re a person. A family. You want to make sure you’re making the right decision to hire an agent versus selling your home yourself.

According to a Realtor field guide, homes sold without a real estate agent accounted for 8% of total home sales in 2014. The typical “For Sale By Owner” (FSBO) home sold for $210,000 compared to $249,000 for agent-assisted home sales. Even after you pay the average agent commission of 6% (about $14,940 at those average sale prices), you stand to make more money (roughly $24,000 more)  with an agent.

Granted, it’s hard to be convinced of these numbers when they’re just figurative concepts in a blog post. How much extra money are you actually making when you use an agent, and how much money are you actually paying your agent while your house sits on the market? Let’s dive a little deeper.

How Much Real Estate Agents Make Off An Average Home Sale, In Short

On average, 6% of the sale price will go towards the commission. This figure typically gets split 50-50 between your agent and the buyer’s agent. On top of that, your agent has to split their half with their broker. Let’s say your home value is consistent with the nationwide average of $240,000. A standard agent commission would be 6%, so the commission comes to: 240,000 x .06 = 14,400. Of that figure, half would go towards your agent, and the other half would go to the buyer’s agent. So: 14,400 / 2 = 7,200.

However, that’s still not your real estate agent’s take-home pay. Your agent will owe some of that to his or her broker. The percentage they owe the broker varies based on the experience of the agent — which can range from less than half to two thirds. Assuming your agent is decently experienced but not incredibly so, they’re probably looking at another 50-50 split: 7,200 / 2 = 3,600. Therefore, the agent’s take-home commission is $3,600.

The Difference In How Much You Make Without an Agent and With a Real Estate Agent

Will Gaskins, a top real estate agent in Washington DC and Northern Virginia, who has sold 10x the number of homes that the average Arlington real estate agent has over his 12 year career, says the most important part about being an agent is “being able to protect people’s interests, because those interests are normally not well met.”

If you sold your home without an agent, statistically you would receive 84.3% of that price:
240,000 x .843 = $202,320

On the other hand if you sell with an agent, your total after the commission is taken out is 94% of the sale price:
240,000 x .94 = 225,600

That’s a pretty big difference.

The average time it takes to sell a home in 2016 varies by state, between 30 days to four months. $3,600 seems like a fair number to pay a real estate agent for a couple months of work, but let’s keep diving.

Average Real Estate Agent Commissions By State

In order to see what your agent’s daily rate might look like, we decided to use our database of housing transaction data to analyze the following averages in each state over the last three years (2015, 2014, 2013): home price, days spent on the market, commission per sale, and agent takeaway. After all, it seems like a lot of money to hand over to someone (and it is!) but when we break it down, we find it easier to get one’s head around why realtor fees are worth it.

Region: West

How much do real estate agents make in the West?

 

State Avg. Home Price Avg. Days on Market Avg. Commission Per Sale Avg. Seller Agent’s Takeaway What You’re Effectively Paying Your Agent Per Day
Alaska $305,940 90 $18,356 $4,589 $51
California $546,800 90 $32,808 $8,202 $91
Hawaii $497,160 190 $29,830 $7,457 $39
Oregon $227,000 190 $13,620 $3,405 $18
Washington $357,390 110 $21,443 $5,361 $49

Region: Rocky MountainHow much do real estate agents make in Rocky Mountain states?

 

State Avg. Home Price Avg. Days on Market Avg. Commission Per Sale Avg. Seller Agent’s Takeaway What You’re Effectively Paying Your Agent Per Day
Colorado $322,430 80 $19,346 $4,836 $60
Idaho $192,250 110 $11,535 $2,884 $26
Montana $256,120 150 $15,367 $3,842 $26
Nevada $212,370 110 $12,742 $3,186 $29
Utah $239,210 110 $14,353 $3,588 $33
Wyoming $461,880 140 $27,713 $6,928 $49

Region: MidwestHow much do real estate agents make in the Midwest?

 

State Avg. Home Price Avg. Days on Market Avg. Commission Per Sale Avg. Seller Agent’s Takeaway What You’re Effectively Paying Your Agent Per Day
North Dakota $198,920 160 $11,935 $2,984 $19
South Dakota $159,070 100 $9,544 $2,386 $24
Nebraska $176,140 150 $10,568 $2,642 $18
Kansas $230,710 110 $13,843 $3,461 $31
Minnesota $208,240 120 $12,494 $3,124 $26
Iowa $164,410 180 $9,865 $2,466 $14
Missouri $206,280 120 $12,377 $3,094 $26
Illinois $139,150 170 $8,349 $2,087 $12
Indiana $159,970 150 $9,598 $2,400 $16
Michigan $137,810 140 $8,269 $2,067 $15
Ohio $148,260 160 $8,896 $2,224 $14
Wisconsin $184,160 130 $11,050 $2,762 $21

Region: SouthwestHow much do real estate agents make in the Southwest

 

State Avg. Home Price Avg. Days on Market Avg. Commission Per Sale Avg. Seller Agent’s Takeaway What You’re Effectively Paying Your Agent Per Day
Arizona $196,720 140 $11,803 $2,951 $21
New Mexico $200,160 180 $12,010 $3,002 $17
Texas $255,470 90 $15,328 $3,832 $43
Oklahoma $139,260 160 $8,356 $2,089 $13

Region: SoutheastHow much do real estate agents make in the Southeast?

 

State Avg. Home Price Avg. Days on Market Avg. Commission Per Sale Avg. Seller Agent’s Takeaway What You’re Effectively Paying Your Agent Per Day
Louisiana $218,710 130 $13,123 $3,281 $25
Florida $273,940 150 $16,436 $4,109 $27
Georgia $225,140 110 $13,508 $3,377 $31
Arkansas $149,480 160 $8,969 $2,242 $14
Mississippi $179,650 140 $10,779 $2,695 $19
Alabama $153,660 170 $9,220 $2,305 $14
Tennessee $209,640 100 $12,578 $3,145 $31
Kentucky $165,910 150 $9,955 $2,489 $17
South Carolina $228,770 130 $13,726 $3,432 $26
North Carolina $226,700 120 $13,602 $3,401 $28

Region: Mid AtlanticHow much do real estate agents make in the Mid Atlantic

State Avg. Home Price Avg. Days on Market Avg. Commission Per Sale Avg. Seller Agent’s Takeaway What You’re Effectively Paying Your Agent Per Day
District of Columbia $620,480 70 $37,229 $9,307 $133
Virginia $460,190 80 $27,611 $6,903 $86
West Virginia $171,650 120 $10,299 $2,575 $21
Maryland $321,610 110 $19,297 $4,824 $44
Delaware $221,960 140 $13,318 $3,329 $24
Pennsylvania $259,490 130 $15,569 $3,892 $30

 

Region: NortheastHow much do real estate agents make in the Northeast?

State Avg. Home Price Avg. Days on Market Avg. Commission Per Sale Avg. Seller Agent’s Takeaway What You’re Effectively Paying Your Agent Per Day
Vermont $243,270 190 $14,596 $3,649 $19
New Hampshire $247,160 130 $14,830 $3,707 $29
Rhode Island $263,990 150 $15,839 $3,960 $26
Maine $256,830 130 $15,410 $3,852 $30
New York $300,610 150 $18,037 $4,509 $30
New Jersey $270,870 170 $16,252 $4,063 $24
Massachusetts $418,100 120 $25,086 $6,272 $52
Connecticut $246,690 140 $14,801 $3,700 $26

What does this data show us? In some states, it seems like you’re barely paying your real estate agent the minimum wage (unless they work more than one home sale every month, that is). In others, it might seem like you’re paying them more per day, but that’s only because your property will sell quicker and for more money than it would if it was located elsewhere.

For Gaskins, explaining his worth to his clients is simple. He looks at his role as not only results-driven, but one of empathy. “We are here to solve people’s problems,” Gaskins said. “We’re here to solve problems people don’t know how to solve for themselves. Every deal has hiccups and everyone on your team should be focused on how to make these problems go away.”

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