Whether you’re ready to buy or sell your home, you’ll want to find a real estate agent to work with. But you might be wondering: How much does it cost to hire a real estate agent? How does a real estate agent make money? How much money does a real estate agent make? 

Q: When does a real estate agent get paid? 

A: A real estate agent will get paid at the end of your transaction. So whether it takes you weeks or months to buy or sell a home, a real estate agent is not getting paid until you either buy a home or sell your home. 

Q: How much does a real estate agent charge? 

A: Generally, a commission for a real estate agent is 6% of a home’s sold price, but this can really vary. This commission is usually split between a buyer’s agent and a seller’s agent. Sometimes it’s split evenly, and sometimes something else is agreed upon. So, for example, if a home’s selling price is $300,000, the overall commission is $18,000, and it’s split from there. 

Q: How will I know how much a real estate agent charges? 

A: This will all be detailed in a contract that you have with your agent, whether you’re working with a buyer’s or seller’s agent. 

Q: What types of expenses does a real estate agent have? 

A: It might sound like a real estate agent is making a decent chunk of money from just one transaction, but there are several expenses the agent will have to handle on their own. The first one is the fee to an agent’s brokerage. Brokerage’s have different contracts with their agents, and some agents have to pay tens of thousands of dollars each year before they can even begin making a profit. 

Real estate agents also have to spend money on licenses and permits, MLS fees, real estate agent association dues, office space, office supplies, software, transportation, marketing and advertising, continuing education, conferences, income taxes, and then of course, paying part of the commission to their brokerage.


There are even more scenarios when it comes to how real estate agents charge for their services, split commissions, etc. Keep in mind that it’s important that you clearly establish your working relationship and terms at the beginning of your home buying or selling journey! 


Have more questions about money and real estate? Check out a few of our other blog posts: 

Is It Time To Reduce The Price of My Home? 

If you are trying to sell your home but not having any luck, you may be wondering if it...

Read More

What You Need to Know About Mortgages

A mortgage is a loan that will provide you with the finances necessary so you can purchase...

Read More

Improving Your Credit Score to Buy a Home

Credit scores are a BIG factor when it comes to obtaining a mortgage loan. Is it possible ...

Read More