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How Much Do California Real Estate Agents Make

How Much Do California Real Estate Agents Make?

If you’re looking for how much California real estate agents make, then this blog post is for you. According to the research, the average annual salary for California agents is $91,363.

When we see nationwide real estate agents’ salaries vary from $28,270 to $102,170. Why there is so much gap in pay? It means how much you work is going to affect how much you get also location makes the difference. Across the country, you will find it true for California.

There is a significant difference when we talk about earning in northern California compared to southern California. In the bigger metropolitan areas life and earing for real estate agents will be significantly different than it will be for those who live in rural areas.

So how do agent commission splits work in California?

Number one is the total commission that is paid by the seller. In California 1-6% is the sales price. 5-6% is the standard sales price and for high-priced properties, the commission may be more like 4-5%. The seller and the listing agent negotiate before the contract is signed.

Second, comes the commission split that is between the buyer agent and the listing agent. Generally, it splits 50/50. In hopes of attracting more leads, you see a listing that offers the buyer agent a higher split. If we take the opposite, then it is also true.

They receive the full commission if the listing agent ends up finding the buyer and representing both because a dual agency is also a possibility.

In the end, the commission is split between the broker and the agent. Broker pays the agent their cut after he receives the proceeds from a sale. Even within the same brokerage, the agreed-upon commission split can differ from agent to agent. New agents get 50/50 splits while seasoned agents get upward of 70/30 or 80/20.

Also, other possible scenarios exist. Monthly broker fees are necessary when you have to keep 100% of the commission.  Sliding scale commission split is also offered by a broker. It becomes more advantageous the more you sell when the commission starts low around 40/50 or 50/50.

For a month or year there could be additional broker fees per sale, so be aware of that.

Moving on to do California real estate agents pay their own taxes?

The tax factor is last but not least. High taxes are the reason why California is being notorious. The broker does not deduct anything when they pay an agent their share of the commission. Each time an agent receives a commission check they must subtract taxes.

Real estate agents must pay the IRS estimated taxes every quarter as independent contractor.

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