Real estate agents typically earn income through commissions, not a fixed monthly salary. This means their monthly pay is variable and directly tied to closing transactions. Consequently, understanding this structure is crucial for both licensing exams and practical career planning. A firm grasp of the commission flow is tested on state exams, such as those detailed by the National Association of Realtors.
The Commission Payment Pathway
An agent's pay follows a specific sequence from sale to personal income:
- Transaction Closing: A commission, typically a percentage of the sale price, is paid by the seller to the listing broker at closing.
- Broker Cooperation: The total commission is often split between the listing broker and the buyer's broker, as per a cooperative agreement.
- Broker-Agent Split: The agent's sponsoring broker then splits their share with the agent based on a pre-negotiated agreement (e.g., 70/30). This is the agent's gross commission.
- Net Monthly Income: The agent's monthly take-home pay is the sum of their net commissions from all closings that month, minus business expenses (e.g., marketing, MLS fees, transportation).
Exam Focus and Financial Reality
For exam purposes, you must master calculating net agent commissions. Test questions frequently present a sale price, a total commission rate, and a broker split, requiring you to compute the agent's final earnings. In practice, this model creates an irregular income stream. Some months are highly lucrative after multiple closings, while others may have minimal income during slower periods or while properties are listed.
Therefore, when asking how do real estate agents get paid per month, the answer is: through a variable, commission-driven process that rewards successful deal completion. This structure underscores the importance of financial discipline and pipeline management, which are essential for sustaining a stable monthly income in this profession.