How Do Realtors Get Paid


Subscribe to our podcast on Spotify, Apple Podcast or Google Play. Search: “The Real Wausau Real Estate Show”. 

Hey! It’s Austin Solomon with The Solomon Group, Coldwell Banker Action. Thanks for listening to this week’s episode of The Real, Wausau’s Real Estate Show.

Today we’re talking about the age old question… the question I get asked a lot and I answer a lot, but that many agents just might shy away from.

It’s – how do Realtors get paid?

Basically Realtors get paid on commission. The definition of commission is the fee or percentage allowed to a sales representative or agent for services rendered. So, a lot of times we get paid a percentage of the sales price.

Today we are going to talk about how much we get paid, what we get paid and what that looks like and we’re going to keep it real.

The interesting thing about real estate is we don’t actually get paid until the property closes. There’s really no hourly rates, there’s no guaranteed money. So if we showed a buyer 20 houses and they decided that there is just too much snow on the ground to move to such an area and they decide to move to Florida. We showed them 20 houses but for that we don’t get compensated. This happens a lot by the way, which is ok. That is just part of the industry.

The nature is… if you’re looking for a paycheck, that’s not the right spot to be in. Obviously, you want to have the right motives and work for the best interest of the clients that you’re helping. That often means we show a lot of houses or do a lot of stuff and the timing is not right, and we just right that one off as free experience.

Real estate is not for everybody. Obviously, when starting out there are a lot of gaps between sales and uncertainty, and that can be a bit challenging when you start.

Ok, so how much to Realtors get paid? For the majority of the time we get paid a percentage of the price, whether that’s land, residential property or commercial. It’s a percentage.

And I’m going to give you guys a realistic example now. Say I help a buyer purchase a house for $200,000 and there is a commission offered to the agent who brings the buyer of 2.5%. Then 2.5% of $200,000 would be $5,000. So that’s your commission, it would be $5,000.

As a sub note, who pays for that? The majority of the time the seller would pay the commission for the agents involved, so not the buyer in most cases.

So the $5,000… where does that go? Does it go into the agents pocket? Are they walking out of the room with a big $5K check? No.

So, most of the time, or I should say, if the real estate agent is in fact an agent and not a broker, meaning they work with a company. For example, I’m an agent. I’m not a broker. That $5,000 check goes into our office or the agents office and from there gets dispersed between the office and the agent.

So, I wish that full $5,000 went into the agents pocket but it does not. It gets split between the office and the agent. The office has a lot of overhead and expenses that go into the running of an office, the marketing, the office building, all the equipment, the staff, and all the things that go into running a company.

From there, like I said, the agent and the office what we have in our industry, what we call a split. There is a way that the commissions are split among the agent and the office. And really those splits can vary depending on a multitude of factors.

So that’s how real estate agents get paid, how much they get paid and how things are handled.

What’s interesting about real estate is that a lot of times, like I talked about we kind of work for free for about 75% of the time and we get paid super well 25% of the time. Meaning that a lot of times the work we put in doesn’t necessarily lead directly to a sale, which is the nature of the industry.

But when things do connect and work out, the agent does get rewarded very well for bringing that together. And it’s really not a bad thing. A lot of times actually favorable if you can focus on the right things and help the consumer and convey excellent service, focusing on the buyers and sellers needs throughout, the sales will naturally occur. And that’s the belief that we demonstrate when we practice real estate by focusing on the right things. The payments and commissions will come as a result of doing the first thing, the most important thing, the best… which is obviously helping people.

There you go! That’s how real estate agents get paid. It’s a shorter episode today. We’re keeping it real and hopefully you guys have a great week.

Subscribe to our podcast on Spotify, Apple Podcast or Google Play. Search: “The Real Wausau Real Estate Show”.

Have a question or idea you’d like to learn more about? Email our team at!

Austin Solomon | The Solomon Group – Coldwell Banker Action – (715) 212-4693.

Leave a Reply