How Much Do First-Year Real Estate Agents Make?

A first-year real estate agent in the United States may earn anywhere from very little to well over $100,000, but a realistic planning range for many new agents is approximately $10,000 to $50,000 in gross income during the first year.

Some agents earn nothing for several months before closing their first transaction. Others build a strong referral network, join a productive team, or enter a high-volume market and earn substantially more. The result depends less on the license itself than on the agent’s market, lead-generation system, brokerage agreement, transaction volume, and ability to stay financially stable while building a business.

The National Association of REALTORS® reported that members with two years or less in the business had median gross income of $8,100 in its 2025 Member Profile, which was based on members’ 2024 activity. That figure is not a guaranteed salary or a precise forecast for every new licensee, but it illustrates how uneven the first years can be.

What “Making” Money Means in Real Estate

Real estate agents generally do not receive a traditional salary. They are commonly paid when a transaction closes, and the compensation is divided among several parties.

A simplified transaction might work like this:

A home sells for $400,000.
The compensation negotiated for one side of the transaction is 2.5%, or $10,000.
The agent’s brokerage takes an agreed-upon share.
The agent pays business expenses and taxes.
The remaining amount is the agent’s approximate pre-tax business income.

If an agent has a 70/30 brokerage split, the agent would retain about $7,000 before expenses and taxes. A newer agent may also owe transaction fees, franchise fees, desk fees, marketing costs, association dues, MLS fees, insurance premiums, mileage, and technology expenses.

The agent’s actual take-home amount could therefore be much lower than the commission shown on a settlement statement.

Typical First-Year Income Ranges

There is no single national “first-year real estate agent salary.” The following ranges are practical planning estimates rather than official wage categories:

| First-year outcome | Approximate gross income | What it may look like |
|---|---:|---|
| Very slow start | $0–$10,000 | No closings or one small transaction |
| Common early outcome | $10,000–$50,000 | One to several closings, often with inconsistent prospecting |
| Strong first year | $50,000–$100,000 | Consistent lead generation, coaching, referrals, or team support |
| Exceptional first year | More than $100,000 | Several successful transactions in a strong market or high-price area |

These figures are gross income before the brokerage split, operating costs, self-employment taxes, and income taxes. They should not be confused with guaranteed earnings.

Industry-wide wage data also requires careful interpretation. The Bureau of Labor Statistics reported a median annual wage of $52,830 for real estate sales agents in May 2025, but that figure covers the occupation as a whole—not just people in their first year. Experienced agents, part-time agents, high-volume producers, and agents in different types of markets are included in the broader number.

Why First-Year Income Is Often Low

The income lag

A newly licensed agent may spend weeks or months learning contracts, building a database, finding clients, and touring properties before earning a commission. Even after finding a client, the transaction may take several months to close.

This creates a significant delay between the work performed and the money received.

Commission income is unpredictable

One month may produce a large commission, while the next several months may produce nothing. Agents must budget around closings rather than pay periods.

New agents often lack a sphere of influence

Experienced agents may receive repeat business and referrals from prior clients. A first-year agent usually has to build that network from scratch.

Lead costs can arrive before revenue

Agents may spend money on signs, photos, advertising, websites, customer relationship management software, mailers, networking events, and continuing education before completing a transaction.

Brokerage splits affect income

A brokerage may offer a favorable split but charge fees, or provide leads and training in exchange for a larger portion of each commission. Comparing only the advertised split can lead to poor decisions.

A First-Year Income Example

Assume an agent closes three transactions during the year:

Average sale price: $350,000
Negotiated compensation for the agent’s side: 2.5%
Gross commission per closing: $8,750
Total gross commission: $26,250
Brokerage split: 70/30
Agent’s share before expenses: $18,375
Annual business expenses: $6,000
Approximate profit before taxes: $12,375

This example shows why a first-year agent can generate more than $25,000 in gross commissions but have far less available as personal income.

Compensation is negotiable and can take different forms, including a percentage, flat fee, hourly rate, or other agreed arrangement. NAR’s practice changes require written buyer agreements for participating agents working with buyers before touring a home, with compensation disclosed clearly and objectively.

The Costs First-Year Agents Should Budget For

Before estimating income, create a realistic expense plan. Common costs include:

Prelicensing education and exam fees
State application and licensing fees
Fingerprinting and background-check fees
REALTOR® association dues, if applicable
MLS access
Brokerage fees and transaction fees
Errors and omissions insurance
Business cards, signs, photography, and marketing
Website and customer relationship management software
Lockbox access
Transportation, mileage, parking, and client entertainment
Continuing education
Tax preparation and bookkeeping
Health insurance and retirement savings

A new agent should ideally maintain several months of living expenses outside the real estate business. Borrowing heavily to fund advertising before developing a reliable sales process is a common and costly mistake.

How Brokerage Splits Work

Brokerage compensation structures vary widely. Examples may include:

A traditional percentage split, such as 50/50, 70/30, or 80/20
A graduated split that improves after reaching a production threshold
A capped model in which the agent pays the brokerage a certain maximum amount
A transaction-fee model
A team arrangement with additional lead or support fees
A salaried or hybrid position, which may involve different responsibilities and compensation

Ask each brokerage to show the complete financial picture in writing. Questions should include:

What is the commission split?
Is there a cap?
What transaction fees apply?
Are there monthly or annual fees?
Who pays for leads?
Are team splits separate from brokerage splits?
What training and contract support are included?
Are there fees when a client cancels or a transaction fails?
What happens to pending commissions if the agent changes brokerages?

A higher split is not always the best deal. A brokerage that provides strong supervision, practical training, qualified leads, and transaction support may help a new agent close more business.

How to Increase First-Year Earnings

Build a contact database immediately

Create a database containing friends, family, former coworkers, community contacts, lenders, contractors, and other professionals. Record meaningful details and communicate consistently without pressuring people.

Choose a specific market

Learn a manageable geographic area rather than trying to know an entire metropolitan region. Study:

Recent sales
Property taxes
School boundaries
Zoning and land-use issues
Insurance costs
Local inventory
Days on market
Common inspection problems
Neighborhood amenities and restrictions

Local expertise helps an agent provide value before becoming highly experienced.

Use a daily prospecting schedule

A simple schedule might include:

30 minutes reviewing market activity
60 minutes contacting prospects and past contacts
30 minutes following up with active leads
30 minutes creating useful local content
Time for appointments, showings, and transaction work

Consistency generally matters more than occasional bursts of activity.

Join a productive team carefully

A team can provide leads, mentorship, administrative support, and transaction experience. However, the agent may receive a smaller share of each commission. Review the team agreement and calculate expected net income, not just the number of leads promised.

Learn contracts and compliance

A new agent should understand agency relationships, disclosures, fair housing requirements, advertising rules, escrow procedures, and state-specific contract deadlines. Errors can cost clients money and expose the agent and brokerage to legal or regulatory problems.

Develop referral partnerships

Build relationships with lenders, inspectors, attorneys, contractors, insurance professionals, property managers, and other agents. Referral relationships should be handled in compliance with applicable laws and regulations, including restrictions on payments for settlement-service referrals.

Use training strategically

Training is most useful when it addresses actual business tasks: pricing a property, preparing a comparative market analysis, writing an offer, handling inspection negotiations, explaining agency forms, and managing a transaction timeline.

LeapRealEstate.com can be a helpful next step for aspiring and newly licensed agents who want structured education, practical training, and a clearer path from licensing into day-to-day real estate work.

Common First-Year Mistakes

Treating gross commission as personal income

A commission check is not the same as take-home pay. Always subtract the brokerage split, transaction expenses, operating costs, and taxes.

Spending heavily on leads too early

Paid leads can be expensive and may require fast follow-up and strong conversion skills. Establish a repeatable follow-up process before committing to a large advertising budget.

Choosing a brokerage based only on the split

A 90/10 split may be less valuable than a 70/30 split if the first brokerage provides no training, supervision, or lead support.

Failing to plan for taxes

Many agents operate as independent contractors and may need to make estimated tax payments. Set aside a portion of every commission and consult a qualified tax professional about business deductions and filing obligations.

Ignoring written agreements

Under current NAR practice changes, participating agents working with buyers must use a written agreement before touring a home, and the agreement must address compensation clearly. State law and brokerage policy may impose additional requirements.

Neglecting follow-up

A lead who is not ready to buy today may become a client months later. New agents often lose business because they stop communicating after the initial conversation.

Promising results they cannot control

Agents should avoid guaranteeing a sale price, closing date, appraisal outcome, financing result, or specific investment return. Clear communication and accurate expectations are more valuable than overpromising.

How to Decide Whether Real Estate Is Financially Practical

Before entering the business, estimate the number of transactions required to support your goals.

For example:

Desired annual pre-tax business income: $60,000
Estimated net income per closing after brokerage split and transaction costs: $6,000
Required closings: approximately 10

Then account for the possibility that some transactions will fall apart, take longer than expected, or produce less income than planned. A safer target may be 12 or more transaction opportunities rather than exactly 10 completed closings.

Also consider whether you can:

Support yourself during an extended period without commissions
Work evenings and weekends
Prospect consistently
Handle rejection and uncertainty
Learn state-specific rules
Pay business expenses before receiving revenue
Provide responsive service during stressful transactions

Bottom Line

First-year real estate agents often earn less than the occupation-wide median because they are still building a client base and may go months without a closing. A realistic financial plan should assume modest early income—potentially close to zero at first—while leaving room for higher earnings if the agent develops consistent lead generation and closes several transactions.

The strongest first-year strategy is to control expenses, choose a supportive brokerage, build a contact database, follow up every day, learn contracts thoroughly, and measure net income rather than gross commissions.

Authoritative Sources