Average Real Estate Agent Income

Considering California’s median home value is in the $600k–$700k range, there’s plenty of money to be made as a California real estate agent.

While not everyone can service the upper-tier markets, the sheer volume of active buyers and sellers in California produces a huge need for qualified part-time and full-time real estate agents who can offer their expertise in a broad spectrum of price points and niches.

To answer this question, it’s important to keep in mind everyone’s first year of real estate looks different. That means the average real estate income in California may not reflect what many new real estate agents actually experience in their first year.

Some factors that affect the average real estate income for first-year real estate agents in California are:

• Your first-year marketing budget
• Your broker’s reputation and success in your chosen market
• Your commission split with your broker
• Whether or not you’re working with a skilled mentor
• Whether you’re part-time or full-time
• The size of your sphere of influence and your networking skills
• Which city you work in
• And your understanding of the local market and your chosen niche

That said, we conducted a survey in 2020 finding the average first-year real estate agent in California earns approximately $41,000, and that number rises to over $104,000 between years four and ten of their career.

Although it’s not common, there are some real estate agencies that do offer their real estate agents a base salary and even offer health care benefits.

The most popular agency to do this is Redfin, which does offer real estate agents salary plus commission. Redfin also offers paid time off, parental leave, and bonuses.

But does that mean they’re the right choice for you to get started in real estate?

For some new real estate agents, the answer is yes.

The base commission some agencies offer could be the difference between new real estate agents pursuing a real estate career or not, especially if they don’t have much money saved up from another source.

However, the majority of real estate agents work off commission only — and many prefer it that way for unlimited earning potential.

Still, networking and transactions can take time, so if you don’t have another income source that can support you in the meantime, or you don’t have savings available for both living and marketing expenses, an agency that offers base salary may be the smart choice to get started.

Both REALTORS™ and non-member real estate agents charge around 5-6% per transaction. This can vary depending on their experience, their market, and whether they’re a buying or listing agent.

Though a buyer’s agent may also charge around 5-6% per transaction, buyer’s agents may offer a commission rebate to their clients and end up with a slightly lesser percentage.

In the simplest terms, offering clients a commission rebate means buyer’s agents sometimes offer money back to their client if they’ve saved money on marketing, staging, or other parts of the transaction (usually with the help of streamlined technology) as an incentive to continue working with them.

Why the City You Choose to Work In Affects Your First-Year Average Real Estate Income More Than the Average Commission Rate:

While all of the above reasons can contribute to what your first-year salary looks like, arguably the most important factor is which California city you’ve chosen to work in.

For example, the average commission rate in Los Angeles is around 5%.

When you consider the average single-family home in Los Angeles is $650k, a 5% commission yields $32,500 for a listing agent before broker fees.

On the other hand, a city like Oxnard has a median home value of around $330,000, making a 5% commission dwindle down to just $16,500 before broker fees.

While both commissions are much higher than the commission one might make in other areas of the country, it’s easy to see how the city you choose greatly affects your average real estate income in your first year, and even well beyond that.

Both REALTORS™ and non-member real estate agents charge around 5-6% per transaction. This can vary depending on their experience, their market, and whether they’re a buying or listing agent.

Though a buyer’s agent may also charge around 5-6% per transaction, buyer’s agents may offer a commission rebate to their clients and end up with a slightly lesser percentage.

Many real estate agents start out on a part-time basis.

Of course, the benefits are that part-time work allows one to experience a real estate career without immediately abandoning other sources of income, and may even make it easier for agents to find out which niches and markets they prefer working in before committing full-time.

Work More, Earn More

A recent survey found that real estate agents across the country who work more hours earn more money — specifically, real estate agents who work between 40–60 hours earn the most. Moreover, the highest earners are also the happiest real estate agents, likely because real estate is a career where hard work can directly pay off.

At the same time, agents who work less than 30 hours per week can still earn an average of $24,566 per year, which isn’t bad for a part-time career.

Part-Time Income In California May Be Higher

And again, a part-time California real estate agent in cities like Los Angeles, San Francisco, or San Diego may earn more than the average part-time real estate agent in other parts of the country simply due to higher home prices.

In short, the average real estate agent income in California can vary, but is higher than most states.

Though real estate success is highly dependent on individual effort, California’s huge population and high property values in most areas outweigh many other factors that influence the average real estate income.