I should tell you upfront that this article is harder to write than the other nine in this series. Every other occupation I’ve covered (nurses, teachers, cops, electricians, pharmacists, truck drivers, data scientists) has a salary you can point to and say “this is roughly what the job pays.” Real estate doesn’t work that way. There’s no salary. There’s commission, and commission can mean $8,000 a year or $800,000, and the federal survey median of $56,320 is technically accurate but tells you almost nothing about what your life will look like if you get your license.
My neighbor across the street (not the retired cop; different neighbor) is a real estate agent. She’s been doing it for about twelve years, works the Palo Alto and Los Altos market, and she’s doing very well. But she told me something last year that stuck: “Most people who get their license quit within two years. The ones who make it through the first two years do fine. The problem is surviving those two years.” I think that’s the most honest summary of this career I’ve heard.
What the Survey Says (And Why It’s Weird for This Job)
The federal survey median for real estate sales agents is $56,320 as of the most current data. The mean is higher; different aggregators put it anywhere from $66K (PayScale) to $82K (Luxury Presence) to $86K (ZipRecruiter). The spread between these sources is wider than any other occupation I’ve covered and the reason is that real estate income is all over the map. An agent who closed two deals last year and an agent who closed forty are both “real estate agents” in the data.
NAR’s own member survey puts median gross income at $58,100 for 2024. Here’s the stat from that survey that really got me: 62% of agents with two years or less experience earned under $10,000 in their first year. Under ten thousand dollars. Not a typo. Meanwhile, 40% of agents with 16+ years of experience earned over $100,000. The distribution is bimodal in a way that makes the average almost useless. You’re either making very little or doing pretty well; the middle is thin.
The survey also has a structural problem with real estate data. Most agents are independent contractors, and the OEWS survey doesn’t capture self-employed workers. So the numbers are skewed toward agents who work for brokerages on some kind of salary or guaranteed draw, which is a minority. The actual median for all working agents (including independent contractors) is probably lower.
The Highest-Paying States (With a Huge Asterisk)
New York consistently shows up at or near the top, which makes sense: Manhattan real estate prices are absurd, and a 2.5% buyer’s agent commission on a $2 million condo is $50,000 from a single deal. Vermont is surprisingly high in some rankings. Washington and Connecticut are up there too. California should be near the top given home prices but the data is messy because there are so many agents competing; California has more licensed agents than any other state by a wide margin.
The asterisk is that “highest-paying state” means something different for a commission job than for a salaried one. A registered nurse in California makes $149K pretty reliably. A real estate agent in California might make $200K or might make $30K depending on how many deals they close, what price range they work in, and how their commission split works. The state doesn’t pay you; the market and your hustle do.
I live in a market where houses sell for $2 million to $4 million. My neighbor does well here because at those price points, even a couple of deals a year is real money. But there are hundreds of agents licensed in the same zip code, and I’d guess a third of them closed zero or one transaction last year. High-price market doesn’t mean easy money. It means big checks and long droughts.
The Lowest-Paying States
Mississippi is near the bottom again. Ten articles in and the streak is unbroken. Wyoming, Kentucky, Montana, and Florida are also at the low end on multiple lists.
Florida surprised me again (it showed up low for police officers and electricians too). You’d think a state with that much real estate activity would pay agents well, but Florida has an enormous number of licensed agents, way more per capita than most states, and the competition drives commissions down. There’s also a lot of lower-priced inventory relative to, say, California or New York, so the commission per deal is smaller.
The southern and midwestern states with lower home values naturally produce lower commissions. If the average home in your market sells for $180,000 and you’re getting 2.5% on the buy side, that’s $4,500 before your brokerage split. Close ten of those and you’ve made $45,000 gross, minus your split, minus expenses, minus self-employment tax. The math is tight. A lot of agents in these markets have a second job or treat real estate as a side gig.
How the Money Actually Works
Since I’ve been explaining this to people who ask, let me walk through it. Real estate commissions aren’t standardized (NAR is very clear about this) but a common structure works out roughly like this:
On a $400,000 home sale, the total commission might be 5% to 6%, which is $20,000 to $24,000. That gets split between the listing side and the buyer’s side. So each side gets $10,000 to $12,000. Then the agent splits their share with their brokerage. A common split is 70/30 (agent keeps 70%), so on the buyer’s side of that deal, the agent takes home about $7,000 to $8,400.
One deal, $7,000 to $8,400. If you’re doing that on a $400K home.
If you’re my neighbor in Palo Alto working a $3 million sale with a 2.5% buyer’s commission, that’s $75,000 on one side of the deal, and after an 80/20 split with her brokerage (experienced agents negotiate better splits), she keeps $60,000 from a single transaction. Two or three of those a year and she’s clearing $150K+. But she also told me she’s gone four months without a closing. This job is feast or famine in a way that salary data can’t capture.
The NAR settlement from 2024 changed how buyer’s agent commissions work. Sellers no longer automatically offer compensation to buyer’s agents through the MLS. Instead, buyers negotiate their agent’s fee directly. How this shakes out long-term is still unclear; some agents think it’ll compress buyer-side commissions, others think it won’t change much in practice. Worth keeping an eye on if you’re entering the field.
What Actually Determines Your Income
I’d rank these roughly in order of how much they matter:
Market you work in. Nothing else comes close. An agent in San Jose closing five deals a year at $1.5 million average will out-earn an agent in Tupelo closing fifteen deals a year at $175K average. This is a percentage-of-sale-price business, and the price of the homes in your market is the single biggest variable.
Whether you’re full-time or part-time. Full-time agents (40+ hours a week) earning $75K to $200K+ is normal per the McKissock survey. Part-time agents working under 20 hours a week earn a median of about $25K. This is not a career you can phone in.
Your brokerage and commission split. New agents usually start at a 50/50 split with their brokerage. Top producers negotiate to 80/20 or even 90/10. Some brokerages (like eXp or Real) do 100% commission with a flat transaction fee. The math changes a lot depending on which model you’re on.
Years of experience. This one takes a while. The first two years are brutal. After five years, if you’re still in the business, your referral network starts generating leads without you spending money on marketing. After ten years, most of your business comes from repeat clients and word of mouth. That’s when the economics get really good.
Specialization helps too. Luxury agents, commercial agents, and property managers all tend to earn more than generalists. Loan officers who work alongside agents on deals do well too; the median for loan officers is about $73K, which is actually higher than the median for the agents they partner with.
Should You Get Your License?
I’ve been asked this by three people in the past year. My answer depends on the person.
If you have savings to cover 12 to 18 months of expenses while you build a client base, you’re in a market with decent home values, and you’re the kind of person who can handle months of zero income between commission checks, it can be a great career. The ceiling is very high. Agents in my neighborhood who’ve been doing this for a decade are earning $200K to $400K and working on their own schedule. That’s hard to replicate in most salaried jobs.
If you’re thinking about real estate because you saw someone on Instagram showing off a big commission check and you think it’ll be easy money, don’t. Half the people who get their license never close a single deal. The first year is brutal, the income is unpredictable, and you’ll spend money on marketing and lead generation before you earn anything back. There’s a reason 62% of new agents earn under $10K in year one. Most of them quit.
Probably the most honest thing I can say about this career is that the top 20% of agents have an incredible job. The other 80% would have been better off doing something else.
We’ve got state-by-state data for real estate sales agents and property managers. For related careers, check loan officers, financial managers, insurance sales agents, and appraisers and assessors. State hubs for California, Texas, New York, and Florida have the full occupation breakdown.