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How do Realtors Get Paid In 2022? Investment Tricks

Do realtors make a ton of money? How much do they get paid? This has been asked by numerous people and we are here to answer that.

For some people, becoming a realtor is a dream job, promising career, and a happy one at that. For the majority of people, realtors are viewed as one thing and one thing only – middlemen between buyers and sellers of real estate property.

Both of those categories of people are needed to make a deal, that is, both the realtor and the population of willing and able buyers or sellers. 

Stay with us as we examine the life of realtors and ascertain how they get paid.

Who is a Realtor?

If you want to buy, sell, lease, or rent a property, chances are that you’ll likely come in contact with a realtor. A realtor is a real estate agent that helps you in the process of buying or selling a property.

According to, a realtor is a Real Estate salesperson who is licensed under the National Association of Realtors. Realtors are people who act as mediators between buyers of sellers of a house.

They can mediate the transactions in situations of renting, leasing, and selling. Realtors are sometimes called real estate agents.

Some people even use the terms real estate agent, realtor, and real estate broker interchangeably.

Read: 10 Highest Paid Realtors In The USA | Best States For Realtors

What are the differences between a Real Estate Agent, Realtor, and Broker

Due to the common misunderstanding of the role of a real estate agent, broker, or realtor, it is important to state the occupational differences.

The possibility that you might have misused these terms while shopping for a property or looking for one of these professionals to help you sell is high. In any case, you will come across one of them while planning to buy or sell a home.

So why not get to know the true function and distinct features.

First, a real estate agent usually has a professional license to assist anyone who wants to buy, sell, and rent real estate. They mediate the process. Real estate agents comprise real estate brokerage firms and individual realtors.

Second, a real estate broker is an agency company who has completed additional licensing. They often hire other real estate agents or realtors. They may give additional training to their employed realtors or partnering real estate agents.

Third, a realtor is a real estate agent or broker who is part of the National Association of Realtors (NAR). Realtors are required to follow the code of ethics set out by NAR.

While most real estate agents are practically self-employed salespeople in general, they work under the licenses of their respective brokers or associations.

What is a Realtor’s Job Description?

A majority of people are only interested in the convenience that the services of a realtor provide when searching for a house or planning to sell one.

On the other hand, you may be among the unique minority who have an interest in becoming a realtor.

You may want to pursue this as a personal career or begin an agency or brokerage firm. Therefore, what other way to start learning than to have an idea of the job roles of a realtor.

Below are 5 descriptions of the job of a realtor or real estate agent.

  • Finding clients who are willing and able to buy and/or sell a home
  • Representing and connecting new clients to the listing broker
  • Explaining and guiding buyers or sellers on the process of home acquisition or home sale respectively. 
  • Taking clients on house tours and inspections
  • Drafting documents and certificates while interacting with clients’ lawyers 

Now that you know the small differences between those 3 occupations and a realtor’s job description, it is now time to consider a simple set of questions; how do realtors get paid?

Do real estate agents get paid? How much do realtors or real estate agents make in a year?

Read: 10 Best Paying Jobs in Real Estate Investment Trusts (REITS)

How do Realtors Get Paid? 

Realtors and real estate agents, in general, get paid on a commission basis. In most cases, it is usually 5 to 6 percent of the sales price of the house which is split between the listing broker and buyer’s agent.

This realtor’s fee otherwise called the agent’s fee is typically paid from what the seller makes. Since the buyer agents either a realtor or agency represented the interests of the buyer and yet connected them with the listing broker or seller agent, 5-6% of his proceeds from the sale is given a commission.

The commission is paid to the agents be it a broker agency or realtor while buyers generally pay nothing to the agent. It has now become rare to find real estate agents asking for a flat fee or payment on the basis of hourly rate worked.

Realtor Commission Explained 

The idea of getting paid on a commission basis is an age-old concept. The commission realtors get from representing their buyers and making a sale can vary depending on the cost price of the property.

You can get to better understand how real estate commissions work in the following paragraphs.

The intending seller signs a listing agreement that gives the realtor a 5-6% commission on the sale of each home. This agreement may also contain the duties the listing agent or realtor should perform which definitely includes advertising the property, etc. on behalf of the seller.

The 6% commission is split between the realtors and the brokers on each side (i.e Buyer’s and Seller’s), typically 50-50% based on the standing agreement.

After this, quality photos of the home are taken and a property description is written. Thereafter it is uploaded online to the local Multiple Listing Service (MLS). The MLS company will list the home both on their marketplace and on various other agency websites within a specified region. 

As time elapses, clients that show interest in the property will be shown the details of the listed home and even schedule for a physical tour of the place by the buyer’s agent.

If the home buying process continues an offer is made via a letter of intent or a standard form known as a residential purchase agreement. Typically, after a few negotiations between the buyer’s agent and the seller’s agent or listing broker, a deal might be struck.

In addition,

Assuming both parties agree and final inspections are good, then the paperwork is then drafted and the agreement form is signed with the supportive backing of the lawyers. The real estate deal will now proceed to the closing stage.

During the closing, the intending buyer pays in an earnest money deposit or down payment into an escrow company account – a neutral third party – which handles all the money paid in.

In a normal home buying process, this protects both parties from financial disagreements and possible fraud. The listing fee or agent’s commission is subtracted from the cost of the house sold, and then the remaining bulk amount is disbursed to the companies for whom the seller agents work.  

In summary, there is a;

  1. Seller who sells with the help of a Listing broker (a real estate agent) who lists the home on the property market.
  2. Buyer and his representative, the Buyer’s agent who intercedes for the buyer and gets paid from the listing broker’s commission split.
  3. Once the property is sold the Brokers and agents on each side (Buyer’s and Seller’s) split the agreed-upon commission into halves.

Read: What is Fractional Real Estate Investing and does it work?

How much do Real Estate Agents Get Paid?

According to Glassdoor, the national average salary for a Real Estate Agent is $67,962 per annum in the USA. Remember that this figure is the statistically estimated average pay in the US.

It may vary from country to country and vary even in the different states in the US.

Highly sought out cities such as California, Los Angeles, and so on will pay real estate brokers and realtors more money.

Glassdoor reports that the salary estimate is based on the result from 2,331 submitted anonymously by realtors all over the United States. 

Why Should you be a realtor?

That question is definitely dependent on you and your career choice. The job of a realtor is it a buyer’s agent, seller agent or dual agent is not easy. Some realtors work 40 hours a week while others work less than that depending on the level of commitments one is involved in.

The hardest part of the job is finding clients and spreading the word about new listings to contacts and new leads. However, if you have a strong desire to help people find and get their dream house, then becoming a realtor may be a good career for you.

To be sure, it’s a fun and rewarding profession with many responsibilities. You should note that realtors make some expenses that eat into their seemingly enticing profits.

Marketing and networking is one thing real estate agents endeavor to master in order to excel at doing business.

Lastly, be wary of dual agents because they work with conflict of interest as they can represent both sides of the deal and mar the relationship.

Read: 13 Ways to Make Money in Real Estate with no Money in 2022

FAQs on How do Realtors Get Paid In 2022? Investment Tricks

You don’t come upfront and pay the agent(s) involved in buying a house. The money that goes to them is inscribed in the cost price and shared on a percentage basis among the agents and the brokers they represent. 

No realtors get paid on a commission basis and so, it is old practice to see real estate agents being paid on an hourly basis. 

usually about six percent of the cost price and it is later split into halves i.e. 3% between the buyer and seller agents or brokers.

It largely depends on the kind of properties being sold and their prices. Luxury homes and commercial real estate agents/realtors will surely get paid higher than agents conducting single family homes or rentals.




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