If you've ever considered a career in real estate, you may have questions about where to begin, what licensing involves and what working as a real estate agent is actually like.For people in
How I Get Paid
Dated: October 9 2025
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Real estate agents primarily get paid through commissions after a transaction closes, not with a regular salary or hourly wage. A significant legal settlement in 2024 involving the National Association of Realtors (NAR) has changed how commissions are paid, requiring more transparency and negotiation.
How an agent's commission is paid
The journey of a commission from a home sale to an agent's bank account involves several parties.
- Negotiation with clients: Real estate commissions are not fixed; they are negotiable. A seller's total commission rate is agreed upon during the signing of a listing agreement with their agent's brokerage. A buyer will also sign a written agreement with their agent to define the services and compensation structure.
- Negotiation between brokers: Following the NAR settlement, an offer of compensation to a buyer's agent cannot be publicly listed on a multiple listing service (MLS). While a seller can still offer to pay a buyer's agent, the commission split is now negotiated privately between the brokers. In some cases, buyers may pay their agent directly.
- Payment at closing: On closing day, the transaction is finalized, and funds are disbursed from the escrow account. The commission is taken from the sale proceeds and first sent to the brokerages involved.
- Brokerage split: The total commission is then split between the seller's brokerage and the buyer's brokerage. The exact division is determined by the negotiation between the parties.
- Agent payout: Finally, each brokerage pays its own agent based on their individual contract, which details the commission split. The broker's portion covers business costs and legal liability. The agent receives their share, from which they must pay their own business expenses and taxes.
When a real estate agent gets paid
An agent's hard work does not guarantee immediate payment. Their compensation is tied directly to the finalization of a sale.
- At closing: The payment process begins only after the deal closes and all funds have been distributed by the title or escrow company. The agent does not get paid a salary for the months of work it may take to get a deal to the closing table.
- Varies by brokerage: How quickly an agent receives their money after closing depends on the brokerage's internal processes. Some brokerages have automated systems that allow for same-day payment, while others with manual processes may take a week or longer.
- No deal, no pay: If a sale falls through before closing, agents are typically not paid for their time or effort. Some listing agreements, however, may specify conditions under which a commission is still owed to the listing brokerage, such as if the seller backs out after a qualified buyer is found.
Common payment structures with a brokerage
The cut an agent receives from their brokerage varies based on their experience and negotiated agreement.
- Commission split: This is the most common model, where the agent and the brokerage divide the commission from each sale. An experienced, high-producing agent might have a favorable split of 80/20, while a new agent might start at 50/50.
- Desk fee: In this model, agents receive 100% of their commissions but pay a flat monthly "desk fee" to their broker to operate under their license.
- Hybrid model: Some brokerages offer a blend of both models, with a smaller desk fee and a higher commission split than a standard model.
- Salary plus commission: Though rare, some large brokerages employ agents as salaried employees and offer smaller commissions or bonuses on top of a regular paycheck.
John Wagner
John is a dedicated real estate professional serving the Tri-Cities of Northeast Tennessee.John was born and raised in Kingsport, Tennessee, and is a graduate of Sullivan Central High School. Although....
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