How Do Real Estate Agents Get Paid

How Do Real Estate Agents Get Paid

08 Apr 2021

Introduction:- Most real estate agencies in the UK offer on-job training, so a degree or prior experience isn't necessary. Still, it is advantageous to have some experience or degree in Civil or Structural engineering, surveying or urban studies, business, estate management or property development to start a career in the sector.

The salary of a real estate agent is often defined in two parts - a basic salary and a commission. If the agents are authorised or licensed and work as a correspondent of real estate brokers, they earn a fixed salary, and you get it irrespective of the performance, and you can even earn a commission when you close a deal.

In the article below, we discuss How Do Real Estate Agents Get Paid and how real estate agent commission is calculated?

7 Tips: How to Earn Money as a Real Estate Agent

The average real estate agent's salary in the UK is between £12K and £35K. The salary and commissions depend on work experience and previous track records. It doesn't include commissions, which can add up to as little as £1.5K and £20K. The salary is also dependent on location.

For example, in London, average property prices are more than twice the national average, so you could earn up to £58K plus £50K in real estate agent commission per annum. 

Some tips to start your career in the sector are given below - 

1. Turn As a Representative of The Buyer

You need to play the role of a guide to the buyers. You need to stay focused on the kind of properties high in demand and help the buyer determine where to invest. Most online agents who get paid when buying a house offer their services for a lower upfront payment. Typically this will be less than £1K regardless of the value of your home.

2. Make a Checklist for the Seller

You have to create a list of properties for the sellers. Then, an agent's role is to search and notify the seller about the highest price they can get on the sale of their property, and the maximum time it will take to complete the deal. Once the seller approves, the agent needs to negotiate the price with the buyer.

To know how much do real estate agents make, agencies calculate personal commissions based on personal sales or letting figures. The commission is a fee added to the sale price, and it is offered partly to the agency or the agents who drove the sale.

The commission is either based on personal sales figures, official sales figures, or both. One could earn somewhere between £18K and £25K in the first year itself, although some trainees earn much more. The earnings depend on individual performance, and you control how much you make, and your salary reflects your sales ability.

Some salaries include OTE (on-target earnings), your basic salary, and the full amount of commission you'd earn if you meet your sales or letting targets for a full year.

3. Short Sale Can Earn You Money

An agent can list the seller's house for a short sale where the offer can be negotiated with the seller, just like a traditional sale. The offer is then submitted to the lender, not for "acceptance" but for the approval of the terms and net proceeds. 

4. Filling out the Viewpoint of Broker Price 

You can also join the broker office to earn some easy remuneration where you have to bargain and maintain the records. A licensed real estate agent gets access to the list of new properties in the market, and real estate agents get paid a salary to submit such reports to the broker's office.

5. Become a Supervisor 

You can work as a supervisor where you need to take care of the property, search for tenants, handle the renovations and maintain the house's interior and exterior. The real estate agents get paid for rentals earned by the property owners.

6. Work as a Private Enterprise Agent

A commercial or private enterprise real estate agent earns remuneration as commission while negotiating and finalising the price.

At the same time, commercial real estate agents get paid fixed remunerations in the form of monthly salary, but it requires expertise in the field, and you need to know the legalities involved in such transactions. 

7. Provide Services like a Broker

You can work as an independent property broker where you must research and learn about the regional markets. To start individual work in the sector, you have to apply for a license. You may have to set up an office where others agents will work under your guidance, and you have to share the real estate agent commission with the junior agents.

Also, you may have to set up a company policy to let the junior representatives know how real estate brokers get paid? 

How Does A Realtor Get Paid?

If you think you have skilled employees who enjoy negotiation and deal-making, a career in the field could be a great fit for you. Some of the best real estate agents command six-figure salaries in the UK, including a hefty amount as an estate agents' commission on each sale. 

A successful deal with a buyer earns the realtor a healthy remuneration in commission. In addition, as per the company's policy, real estate agents get paid salary entitlements.

HMRC has rules to determine how to calculate commissions and bonuses. There are rules on when a real estate agent must pay a salary and when they can pay in commissions and bonuses. In general, the salary structure must be transparent and measurable. If you're employed, it's illegal for an agency to pay you only in commissions and bonuses, and you must also have a basic salary. 

Real Estate Agent Commission Explained 

A commission is earned by the agents on individual deals, while the fee is a percentage of the sale price or the rent. Depending on the agency's policies, it can be as little as one per cent or as much as ten per cent.

  • Real estate agents don't usually earn the full commission. Instead, this goes to the agency entrusted with selling or renting the property.

  • Agencies calculate personal commissions based on the letting figure and the real estate market condition in the specific area. The agents get commission depending on their experience, but the basic salary usually decreases as your commission increases.

  • The salaries also include OTE (on-target earnings) and commissions you'd earn if you meet the sales or letting targets for a full year.

  • The remuneration or commission of a real estate agent is based on the sale or purchase of properties, or they earn through rental agreements. Their expertise makes the process of buying or selling easier. Usually, real estate agents don't charge the party directly; instead, they get a percentage of the total sales price as a commission.

  • The commission rate is also dependent on the market (urban or rural) and the type of property (office or residential). The agents' commission is determined by the contract between the agent and the buyer or seller.

  • The commission is not fixed and is always subject to negotiation. The commission is distributed in two parts, first is done during the initial paperwork process. Then, the party pays the remaining amount to complete the deal. The actual commission figure fluctuates as it depends on the deal's cost, and if there are many agents involved in the deal, the commission is divided among them.

How Do Real Estate Agents Get Paid For Rentals?

Rarely does the listing agent receive the entire commission? In reality, agents are unable to obtain direct commission payments. Rather, the payment is made to the broker who employs the agent. The broker then pays the agent as per the terms of the contract.

The commission is usually divided among the involved real estate agents, who work as buyers' or seller's agents, where the listing broker may receive a higher percentage of the sale. However, a 50-50 split is common.

Sometimes those with greater experience get 100% of the commission. The agents may have the required qualifications and licenses to serve as their brokers. The agent broker isn't required to break their commission.

A typical agent's wage depends on the commission, but if the house doesn't sell, listing agreements usually set conditions for the listing broker to pay a fee. For example, if a qualified buyer makes an offer and chooses not to sell, the seller will have to pay the fee. There can be other situations where the seller fails to create a clear title or the buyer cannot get a clear title.

How Do Commercial Real Estate Agents Get Paid? 

Commercial real estate agents get paid per the agreement between the seller and the firm where they are employed. Commercial real estate offers offices or places to businesses for professional use. Typically, commercial real estate agents deal with furnished and non-furnished office space or lands where commercial projects are developed.

  • Commercial real estate agents earn a better commission than residential because commercial real estate deals are valued higher than non-commercial properties. Therefore, it enables the broker to earn better compensation in commissions.

  • In case the real estate agent is appointed by a business or a commercial organisation, a legal contract ensures the real estate agent commission is paid once the deal is accomplished.

  • An individual property owner often pays the commission upfront at the time of the deal. However, as the commercial real estate agents operate as a firm, the contract is signed between the firm and the buyer or seller.

  • As per the custom, the real estate agent's fees are paid in two portions, 50% during the signing of the binding contract and the rest of the amount is credited after the completion of the transfer of the asset.   

How Do Real Estate Agents Get Paid When Buying A House?

Real estate agents assist buyers and sellers with their expertise and services. Compared to rental deals, the purchase or deal of a property allows a real estate agent to earn commissions. However, it is not a direct or a fixed payment but a one-time payment against specific services.

After being appointed by a buyer, real estate agents survey the market for suitable properties to match the clientele's requirements. Their experience in the field allows real estate agents to locate and identify suitable houses. The more the valuation, the more significant amount of commission they earn. 

Do Real Estate Agents Get Paid Hourly?

The agents collect information about properties, arrange or get photographs, estimate their value, market the properties to prospective buyers, help buyers determine what they are looking for, monitor the sales and liaise with mortgage brokers or surveyors and the estate agents and keep the records related to all development.

Real estate agents get paid hourly when they offer customised services where specialists need to handle tenants, meet legal / insurance and safety requirements, and draw the letting contracts. In addition, they may have to handle property-related laws, and they mostly earn through a combination of a fixed salary and a percentage of the commissions.

The firm that hires the agents determines its salary structure. An independent real estate broker is a professional who has a set of renowned clientele. 

Who Pays the Real Estate Agent Fees?

Real estate agents offer professional services to clients. Although there may be no fixed salary, if you work in one of the real estate agency's branches, sales, property valuation, or letting services, the transaction figures determine the real estate agent commission and monthly earnings.

Generally, the fees or commission are negotiated according to the valuation of the property involved. Sometimes, a lesser percentage is agreed upon in the case of premium properties with a higher valuation. The commission is always an added incentive in this profession. For example, a negotiator may get a companys' car or a car allowance.

It will sometimes be given on the first day, although usually, it is an incentive that they can earn within the first year. Some firms offer other incentives like insurance, pension schemes and health care or mobile phones, and extended holiday entitlements. Many companies not only reward their high achievers with excellent bonuses and commissions, but they even provide perks.


A real estate agent does all the legal and paperwork involved in negotiating and selling properties. They need to value properties, visit the sellers, communicate with buyers/tenants, arrange for viewing or appointments, show properties to the renters or the buyers, get their feedback and generate sales leads for mortgages.

They collaborate with solicitors, financial advisors, and surveyors, manage auctions and keep records of all proceedings. They can set up their independent agency or work as full-time negotiators or estate agents. They earn a salary between £50K and £250K per annum, while a senior manager's job can be around £40k.

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