Real estate agents don't make a salary but instead rely on commissions and fees to make money. Because of this, a real estate agent who closes a lot of sales makes significantly more money than one who only closes sales occasionally. An agent who sells more expensive homes tends to make more than agents who sell less expensive houses. The seller pays the realtor fee out of the money paid for the home.

How Real Estate Agents Get Paid

In most communities, the standard commission for a real estate agent is about 5 to 6 percent of the final sale price. However, the real estate agent doesn't get all of that money.

Many real estate agents work for a real estate firm, so the firm typically takes a cut of all commissions that the agent makes. If the agent works with a real estate broker, a person who passes referrals on to the agent, then that person also gets a cut of the commission. The final commission is split between the seller's agent and the buyer's agent if both parties used a real estate agent.

How Real Estate Agents Work

A good real estate agent works hard to get the best price on the property in order to maximize the overall commission. Before selling a home, the agent will assess it and compare it to recent homes sold in the area. This helps the sellers determine the best asking price.

After the seller sets a price, the agent lists the home in the Multiple Listing Service, a database of homes being sold in the area, and markets the home through various channels. The agent is also responsible for arranging appointments to show the home to prospective buyers and helping negotiate the sale once a buyer places an offer on the house.

An agent representing a buyer researches homes in the area and brings clients to see houses they might like. This agent also negotiates with the seller's agent on behalf of the buyer.

Other Real Estate Agent Compensation

Some real estate agents deal not only with selling homes, but also with renting houses or apartments. These agents get a percentage of the rental fee, either as an up-front payment or as a monthly portion of the rent.

A real estate agent might also do appraisals. Some states do not allow real estate agents to appraise property values, but in states that do allow this, the agent typically charges a flat fee per appraisal.