How much does a real estate agent make on a 6% commission on a $600,000 sale? The math is straight-forward.
$36,000 Commission paid by Seller
Assuming one agent represents the Seller and another the Buyer,
$18,000 paid to the employing broker of each of the two agents
The employing broker will pay a new agent $9,000 (50%) or a high volume agent $14,400 (80%).
If you're new that $9,000 gross commission may be your only commission that year, or like many agents its one of your four sales, for a total gross pay of $36k that you must use to pay your E&O insurance, say $2k and your other expenses.
Obviously the high volume agent makes a higher percentage and on more sales. But to maintain this volume they need to employ assistants, each earning perhaps $35k.
Often big name agents don't pay for assistants but take a split while someone else does the work. A younger agent does all the work on the listing the big name agent brought in. Say they split the $14,400 50/50, so each get $7,200. This $7,200 is less than the $9,000 the young agent would have received on their own, but then its unlikely they would have received the listing.
So if you're a big name agent selling 200 properties per year at an average price of $600k, your cut is $720k. Not bad at all! But why are they a big name agent? Because they spend a lot of money on advertising, often 50% of what they bring in. That still leaves them with an income of say $320k after expenses - during the good years.
So its good to be king. If you're going to waste your time being a real estate agent, make sure you're the high volume successful agent making $320 and not the other agent netting $30k.
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