How Do Estate Agents Make Money? — The Hedge (2023)

In very simple terms, most estate agents make money by charging a fee, based on a percentage of a property’s final sale price. This type of fee is known as a commission. According to a survey from 2018, the average estate agent commission is 1.42%.

So to look at an example, if a property was sold for £350,000 and the estate agent charged a 1.42% commission, their total fee for the deal would be £4,970. Now of course this is just the average fee. Some estate agents will charge less than this, some will charge more, and some agents are now also offering a fixed selling fee.

You might be looking at those figures and thinking it’s pretty good money. After all, if an agent sold one of those £350,000 properties every 2 weeks, it would equal commission of £129,220! Pretty tidy income for wandering around houses all day and sticking up some signs.

In today’s article, we’ll explain why it’s not quite as lucrative as it can initially appear on the surface, and provide some more detail on how estate agent businesses, and individual estate agents, make their money.

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Estate Agents Commission Explained

The commission that estate agents are paid is based on the final sale price of a property. As mentioned above, the average rate of commission is 1.42%. Whilst this is the average, commission rates can vary from 1% up to 3.5% or sometimes even more. One factor that impacts the rate of commission being paid is the number of agents that have been instructed to try to sell the property.

If you elect to have your property listed with multiple agents, the commission will generally be higher than if you listed with only 1. This is because the risk is higher for the estate agent. If they have sole listing, they can afford to charge a lower rate of say 1-2%, as their time and cost in marketing and showing the property is likely to be rewarded with a sale.

If you have multiple agents trying to sell for you, it means that not all of them will be actually paid for the time they put into the property. For this reason, most agents will charge a higher commission to sell in this way, to compensate for the increased risk.

An important point to keep in mind is that the figures quoted for an estate agent's commission now must include VAT. Prior to October 2016, agents would generally quote their commission figures as ‘plus VAT’ however legislation was introduced to ban this practice.

It’s also important to keep in mind that the commission is charged on the agreed sale price of a property. There are additional costs involved in buying a property, and these can be significant. Additions such as Stamp Duty, legal and conveyancing costs and various mortgage and administration charges can mean the total cost of buying a property is much higher than the final sale price. The fee you pay to sell your property is based purely on the agreed sale price, not the additional lump sum costs that are payable by the buyer.

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Are Estate Agents Fees Negotiable?

As a commercial business that is trying to get your listing, estate agents fees are always negotiable. This isn’t to say that you can definitely get a specific agent to reduce their fees, but it is always worth asking the question to see whether there is any room for negotiation.

The likelihood of whether a reduction in commission is possible will depend on a number of different factors. The first will be simply how badly the agent wants the listing. If their listing numbers are getting low, they may be prepared to offer a good deal in order to get more properties on their books. After all, every time they have a new listing it is an opportunity to advertise their business to other people in the property market, so the benefits go beyond your specific property.

It also depends on the property market. In a hot property market where houses and flats are being snapped up quickly, an estate agent may be more likely to discount their fees. If they are confident that they can get a quick sale, they may not have to put too much time, effort and money into marketing the property, which means they can operate on slimmer margins.

How Much Do Individual Estate Agents Make?

At the beginning of this article, we gave some examples of the types of figures that an estate agent business could make from the regular sale of properties. After all, this is their business and given how many estate agents there are around the country, it’s no surprise that there is good money to be made.

With that said, it’s important to make the distinction between how much the estate agent business can make, and how much the individual estate agent themselves can make! The example given at the top of this article showed that an estate agent who sells a £350,000 property every 2 weeks could generate commission of £129,220 in a year. This looks like a pretty incredible income for the individual estate agent, but unfortunately for them, that’s not how it works.

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In reality, most estate agents are paid a modest salary of between £10,000 - £15,000 and then receive a percentage of the total commission on each sale. For example, they may receive 10% of the total commission received on their sales.

Using the same figures above, this means our individual estate agent could make a £15,000 base salary, plus 10% of the total commission of £129,220 (£12,922). In total then, their earnings for the year could be £27,922 (£15,000 + £12,922). Every business will pay their staff differently, and there are also often additional bonuses available based on overall sales targets being hit throughout the year.

All of this boils down to an average income in the UK of £46,847 for an estate agent. This obviously includes agents who are earning well into 6 figures, as well as those new to the industry who are earning much less than average. Overall, an estate agent can make good money if they are capable of making regular sales.

How Do Estate Agents Make Money From Rental Properties?

Letting agents get paid in a very similar way to estate agents who sell properties. Effectively, they are paid a percentage based commission to provide ongoing management for the buy to let investment properties.

This commission is taken from the ongoing rent that is being paid, and covers the cost of administration of the property costs, liaising with tenants and dealing with any problems that arise from the property.

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Letting agents also charge extra for letting a property out to a new tenant. They will charge a fee for advertising and showing the property, as well as a fee for conducting reference and credit checks on prospective tenants.

How Do Fixed Fee Estate Agents Work?

Fixed fee estate agents have become more popular with the introduction of online agents such as Purple Bricks. This fee method is less common, but it can work out cheaper depending on the circumstances.

As the name suggests, fixed fee agents charge a specific fee based on the details of the property, and not a commission on the final sale price. This is often cheaper than a commission based fee, as it will be designed to apply to a wide range of properties. It will also stay the same regardless of whether the property sells for significantly more than expected.

There are a couple of potential downsides to a fixed fee arrangement. Firstly, the fee is generally paid upfront, which means that you need to come up with the cash yourself rather than have the fee come out of the proceeds of your property sale.

Secondly, there is potentially a reduced incentive for the estate agent to sell your property. As they have already been paid, it doesn’t matter whether the property is sold quickly or slowly. With a commission based fee, the estate agent is incentivised to sell the property so that they can get paid as quickly as possible.

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Estate agents generally make money by charging fees based on a percentage of a property sale price, or a percentage of the monthly rent on a property. This type of fee is known as a commission.

An individual estate agent will generally be paid a nominal salary, and will also receive a portion of this commission on each sale. The vast majority of the commission, however, is paid to the business they work for.


How do estate agents make money? ›

Summary. Estate agents generally make money by charging fees based on a percentage of a property sale price, or a percentage of the monthly rent on a property. This type of fee is known as a commission.

Do estate agents make a lot of money? ›

If you are a successful seller, you can expect to earn between £25,000 and £35,000 in your first year, although many estate agent starters have earned a whole lot more than that – it all depends on how much commission you earn.

How do Rightmove make their money? ›

Our principal source of revenue is the monthly subscription fees paid by customers to advertise all of their properties on Rightmove. Our customers can also pay for our additional advertising solutions, which increase a customer's share of voice and competitiveness.

How do estate agents grow? ›

Read on to know more.
  1. Take up a property franchise. This is a great idea if you are starting out or are in the estate market for quite some time. ...
  2. Set up for social. ...
  3. Stage the property you are selling. ...
  4. Email Newsletters. ...
  5. Host Seminars. ...
  6. Press Releases. ...
  7. Be responsive and approachable. ...
  8. Create a virtual tour.
5 Jan 2018

How most real estate agents are paid? ›

When an agent is paid on commission, they get a percentage of the final sale price of the property they sold. The average commission for a real estate agent can vary, but it is generally around 6%.

What makes the best estate agent? ›

At Movewise we believe there are three key qualities that a good estate agent needs: A good list of potential buyers for your property. A willingness to be proactive and call those buyers. The marketing skills to show your home in the best light.

How many hours do estate agents work? ›

Estate Agency is a service industry, therefore you should be willing to provide one! This involves making yourself available to the public outside normal working hours. On average, the hours tend to be 8.30/9.00am through to 6.00/6.30pm Monday to Friday, with varying amounts of weekend work.

Is being an estate agent hard? ›

Being an estate agent is not an easy job; it requires a lot of hard work, knowledge of the markets, and top-notch sales and people skills. Becoming an accomplished estate agent takes years of experience, but if you put in the hard work and dedication, there are some serious rewards.

Is it good being an estate agent? ›

Working as a real estate agent or broker can be fulfilling and financially rewarding, but it's not easy. A career in real estate requires drumming up business, promoting yourself, tracking leads, handling complex paperwork, providing customer service, and much, much more.

Do estate agents pay to use Rightmove? ›

Cost to Advertise on Rightmove and Zoopla

It costs just £29 to advertise on Rightmove and Zoopla. That is a super low cost to find tenants online compared to the thousands you would pay to a high street agent over the course of a tenancy. Unlike these agents, we don't charge 10% of your rent every month.

Is Rightmove better than Zoopla? ›

Rightmove is typically the best for traffic with around 127.5 million visits per month. This is significantly higher than Zoopla's average of 60 million.

Can you get rich from buy to let? ›

But is there really money to be made from Buy to Let? In short, yes. However, it's important to understand that it requires a lot of time and effort to do so. There's also a lot of other things to consider.

How do agents get so many listings? ›

Real estate agents get listings through a number of strategies, including networking with their target clientele and others who can provide referrals, using traditional and online marketing to reach potential customers, and employing old fashioned, shoe leather methods, such as door knocking, and cold calling.

How do property agents succeed? ›

10 Tips To Help You Become More Successful As A Real Estate Agent
  1. Enhance Your Knowledge Of The Market. ...
  2. Don't Conform To Negative Stereotypes About Real Estate Agents. ...
  3. Team Up With Other Real Estate Agents. ...
  4. Find A Mentor. ...
  5. Leverage The Reputation Of Your Brokerage Firm. ...
  6. Use Technology To Streamline Your Business Practices.

How many houses do most agents sell per year? ›

So How Many Houses Does a Realtor Really Sell Each Year? Only a small number of realtors sell more than a hundred homes a year, and the majority sell anywhere between 2-10 homes a year. Further, first-year or those just starting as realtors usually sell the least number of homes.

Why do real estate agents make so much money? ›

Most real estate agents make money through commissions that are based on a percentage of a property's selling price, (Commission can also be flat fees, but that is much less common.) Agents work under real estate brokers, and the commissions are paid directly to the brokers.

Who is the highest earning real estate agent? ›

Caballero broke his record, which he set in 2018 selling 3,496 new homes in the Dallas-Ft. Worth area, worth $1.384 billion. Ben Caballero, a current Guinness World Record title holder and No.

What type of real estate agent makes the most money? ›

Real Estate Broker

A career as a real estate broker is one of the highest paying and lucrative professions in the real estate industry. On average, experienced brokers take home a six-figure pay. You can only achieve this number once you get a significant amount of good reputation.

What makes an estate agent stand out? ›

Making a unique presence in your community with events, relevant virtual resources, and consistently great photography on your listings can make you really stand out as a real estate agent. Be sure to highlight unique features of your listings to curate experiences for your ideal buyers.

What skills should an estate agent have? ›

Key skills for estate agents
  • Negotiation and selling skills.
  • Ambition, drive and charisma.
  • Good communication skills and the ability to maintain a positive relationship with clients and colleagues.
  • Strong organisation skills, as you may be dealing with more than one property at a time.

How do you act like an estate agent? ›

All examples are drawn from actual recent estate-agent "literature".
  1. 1 Euphemise relentlessly.
  2. 2 Use the magic get-out clause.
  3. 3 Accentuate the positive.
  4. 4 Try to sound formal.
  5. 5 If in doubt, add "-ed"
  6. 6 Be geographically optimistic.
  7. 7 Employ cliches that no one can possibly contradict.
18 Jul 2014

What time do most real estate agents wake up? ›

A real estate agent's daily schedule will look like this: Wake up early (before 7 AM), working out and your morning routine (until 8 AM), lead generation and prospecting (8-11 AM), lunchtime and a mental break (11-12 PM), appointments and meetings (12-4 PM), and the rest of the day is yours!

Is being an estate agent a stressful job? ›

It can be stressful, very busy depending on market. Workload can be heavy and stressful due to small office/few staff.

Is it worth becoming an estate agent UK? ›

Higher than Average Salary

Working as an estate agent is also an opportunity to build a successful career, from which you can earn an income based on your performance. It is, therefore, a growing market and you will most probably see a positive return on your efforts.

Is being a real estate agent lonely? ›

It can get lonely.

Yep, quiet open houses can make you feel like you're the last person on Earth. There's also the hours alone driving around town, the silent hours up late scouring new listings, and the time spent twiddling your thumbs and just sitting there waiting for your appointment to show up.

Is real estate agent a happy career? ›

Real estate agents are remarkably happy people. A whopping 53 percent of agents claim they are “very happy” with their lives, while only 33 percent of Americans can say the same. This means that real estate agents are 60 percent more likely to be very happy with their lives than the average American!

Can I become an estate agent with no experience? ›

You usually don't need any academic qualifications to become an Estate Agent and some large estate agencies will offer to take interesting candidates with no experience and train them up.

Do you need a degree to be an estate agent? ›

Take Real Estate Education

However, estate agents don't need to go to university. But having a degree in real estate will show your future employers and clients that you have gone through professional education and training to deal with properties.

What skills do you have to help you succeed in real estate? ›

With that in mind, here are eight qualities to look out for when searching for the perfect agent.
  • They communicate well and regularly with their clients. ...
  • They're proactive with the sales process. ...
  • They listen. ...
  • They're client-motivated. ...
  • They know the local area. ...
  • They know their clients time frame.
25 Feb 2020

Can you remove sold price from Rightmove? ›

We can remove the description, images and floorplan from a Sold Price record at the home owner's request.

Can you scrape Rightmove? ›

Scraping property listings

Go to and search for whatever region, postcode, city, etc. you are interested in. You can also add any additional filters, e.g. property type, price, number of bedrooms, etc.

Can you sell your house without an estate agent? ›

If you wish to sell your property you can find a buyer yourself or use an estate agent. Before making a decision you should consider how much each method would cost and how much time you have available.

Which property value site is most accurate? ›

The most accurate home value estimator is Redfin as it uses historical pricing data and also considers real-time demand and market trends. Redfin estimates are more accurate than Zillow and the interface is intuitive making it easy to find exactly what you're looking for.

Which home site is most accurate? › is affiliated with the National Association of Realtors and uses MLS listings which are sourced from around 580 regional databases and considered the gold standard for quality listings. For this reason, is our pick for most accurate real estate website.

What is the most popular property website in the UK? ›

Here we review the 12 best property portals in the UK. Rightmove is the UK's biggest property portal, both in terms of its inventory of properties and number of users, making it the go-to property portal for buyers, sellers and renters.

How many rental properties do you need to be a millionaire? ›

To become a real estate millionaire, you may have to own at least ten properties. If this is your goal, you need to accumulate rental properties with a total value of at least a million.

Are most landlords rich? ›

Business owners and landlords (about 15% of U.S. households), tend to be among the wealthiest.

Why do new agents fail? ›

The most common mistakes that agents make is inadequate prospecting, failing to market properties in ways that lead to fast sales, and not following up with their contacts so that strong relationships result in returning clients.

How many clients should an agent have? ›

For maximum profits and minimum headaches, your agency should have 10-20 active clients. That is, 10-20 is the ideal client count for agencies. Less than 10 active clients? You're bound to have a Client Concentration problem (with huge clients you're afraid to say “no” to).

How do you get 10 listings in 30 days? ›

  1. Step 1: Publish Useful Real Estate Blog Posts.
  2. Step 2: Stay In Touch With Previous Clients.
  3. Step 3: Create and Share a One-Minute Video.
  4. Step 4: Post on All Your Social Media Channels.
  5. Step 5: Make Connections with Personal Outreach.
  6. How to Get 10 Listings in 30 Days: Take 5 Simple Steps.
5 Nov 2021

How do I succeed as a real estate agent in 2022? ›

5 Tips for a More Successful 2022 as a Real Estate Agent
  1. Work with an Accountability Partner. ...
  2. Team Up with Other Agents. ...
  3. Engage Your Database of Clients. ...
  4. Be Consistent with Your Content. ...
  5. Never Stop Learning.
4 Feb 2022

Do estate agents earn well? ›

If you are a successful seller, you can expect to earn between £25,000 and £35,000 in your first year, although many estate agent starters have earned a whole lot more than that – it all depends on how much commission you earn.

Do property agents earn alot? ›

It has been said 'The sky is the limit' when it comes to the amount of income a real estate agent can earn. It is true. I have seen agents, many of whom new to the industry, clocking in a 6-figure sales commission in a single month! This is no small feat and kudos to all who have done that!

How long do most real estate agents last? ›

It's common knowledge that 87 percent of real estate agents will fail within the first five years. But it's not as simple as that. A combination of housing inventory challenges, anxiety around the country, and ever-changing effective lead generation strategies make the real estate industry more complex throughout 2021.

Do attractive real estate agents sell more? ›

Researchers looked at listing prices, sales prices and the time properties spent on the market before the sale was completed. In general, the research found that the agents who were rated more attractive had listings with higher prices and larger commissions, which comes from higher sales prices for attractive agents.

How many houses do you have to sell to make 100k? ›

How many houses does an agent have to sell to make $100,000 a year? If you are selling $100,000 houses and paying 40 percent of your commission to your broker you would have to sell over 50 houses a year to gross $100,000 a year. That is a lot of houses to sell, especially for a new agent.

Do estate agents take a percentage? ›

Overwhelmingly, estate agents charge a fee based on a percentage of the price your home sells for. This can be anywhere between 0.75% and 3.0%+VAT depending on the type of contract you opt for with your estate agent.

Is it hard to make money as a real estate agent? ›

Hard work is essential to high salaries, however. While the average represents a high number, the salary range for California Real Estate agents falls between $24,970 on the low end and $123,700 for top earners. In order to become a top earner, agents must commit time, energy, and money.

What do estate agents earn in South Africa? ›

The average real estate agent salary in South Africa is R 456 000 per year or R 234 per hour. Entry-level positions start at R 270 000 per year, while most experienced workers make up to R 4 848 000 per year.

Is it worth using 2 estate agents? ›

The simple answer is yes. The real question is why would you want to? Two agents are usually employed either because one agent has failed to secure a sale or because another promises you they have a buyer waiting. Sometimes this is true.

Can you haggle over estate agents fees? ›

Is it possible to haggle estate agent fees? The simple answer is yes: it is possible to negotiate on estate agent fees. But while fees are important to bear in mind, agent performance matters most. A good high street estate agent will always justify the fee you pay.

How much over asking price should I offer on a home 2022 UK? ›

How much over asking price is too much? In a hot market, experts recommended offering at least 1% to 3% above the asking price in a bidding war. But today's home buyers may face less competition. In June 2022, the average home actually sold for about 1% below its list price, according to Redfin.

Why I quit being a real estate agent? ›

Some common reasons why realtors may choose to leave their jobs could include feeling burned out from the long hours and high pressure of the job, feeling like they are not earning enough money, or simply wanting to try something new.

What is the hardest thing about being a real estate agent? ›

You get paid differently

“The hardest part of being in real estate for new agents is financial and technical,” she says. “It is financially challenging because most people are used to salaried positions. They are accustomed to getting a paycheck every two weeks after putting in a certain amount of work.

Can you be rich if you are a real estate agent? ›

It's clear that real estate agents are necessary and those shopping around or selling in the housing market are willing to pay for the services they offer. Therefore, being an agent could be a great way to become rich in real estate.

How long does it take to become a real estate agent? ›

Key Takeaways. You can become a real estate agent in about four to six months, depending on where you live. The general steps to earning a license include taking the real estate prelicensing course and licensing exam, and then activating your license, and joining a brokerage.

What is the highest paying occupation? ›

Highest Paying Occupations
General internal medicine physiciansThis wage is equal to or greater than $208,000 per year
Family medicine physiciansThis wage is equal to or greater than $208,000 per year
Emergency medicine physiciansThis wage is equal to or greater than $208,000 per year
17 more rows
8 Sept 2022


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