As a real estate agent, you will earn your keep by helping sellers find their home and buyers find theirs!
As such, it is important to be paid well for the services that you provide.

But what are appropriate levels of compensation as an agent? And how do you go about earning those rewards?

This article will talk about some things agents can add to their paychecks, why these are important, and what tips we have for you to learn here.

You’ll also read some stories from other brokers who opened new doors for themselves through the art of negotiation. These include details like what types of negotiations are worth it and what aren’t, and strategies for getting what you want out of others.

So stay tuned and read on! We’ve got lots more info for you.


As a real estate professional, you deserve to be compensated fairly for the services you provide. Your clients expect this from you, and they look to you as a source of information and guidance in all areas related to the market and property.

Agents are professionals, which means they should be treated with respect and professionalism at all times.

What people say about you goes a long way towards determining your career path, and whether or not others trust you to handle key aspects of their lives. When you don’t get enough money, there’s always someone else willing to take on a client instead.

Commissions are too high

how should real estate agents be paid

As we mentioned before, not everyone agrees that agents deserve their very large 6%-8% commission. Some feel it is way too high of a percentage to earn for selling or buying a home.

Agents also need to pay close attention to all of the fees they charge for services, such as being paid online or via mobile device, paying your own mortgage in addition to theirs, etc.

These additional costs can add up quickly if you’re doing many transactions at once! And because these fees vary from agent to agent, some may be more transparent than others about how much money they make off of you.

We recommend staying away from agents who do not disclose this information to you clearly. You should ask directly what their overhead is and whether there are ways to help you reduce those expenses.

Full service agents

how should real estate agents be paid

As mentioned before, full service real estate agents are those that handle all of your property’s listing services and properties. They will take care of finding you a home, negotiating on your behalf with other potential buyers, being in touch with them, as well as representing you during the sale process.

Full service agents usually get paid more than part time ones because they have longer hours. This is due to the amount of work that comes along with being a professional agent (no pun intended).

However, there are some things that full service agents can do that part time agents cannot. Part time agents may not be able to negotiate on their clients’ behalf or help facilitate a sale, for example.

There are also times when it is impossible to represent a client due to limited access to homes or sellers who will not accept representation. In these cases, an agency fee becomes unnecessary since the agent could not perform their job properly.

Limited service agents

how should real estate agents be paid

As we mentioned before, limited agency services are becoming more common in real estate. These agencies do not hold themselves out to be experts in the field, nor do they advertise as such. They typically offer lower price limits for homes, don’t require a pre-listing consultation, and even go as far as advertising being paid off for the month!

While these strategies may work well for them, they can also hurt your business. By limiting yourself, you will never achieve your potential. You will always feel that you aren’t giving enough effort to earn your full pay cheque and this could easily end in lost sales or clients.

By having a basic understanding of the market, how it works and what products and services are needed by sellers and buyers, you should at least try to provide some of those things to your clients. If you really wanted to stick to budget, you could even become a discounted seller agent!

There is an art to negotiating and closing deals, and if you want to reap the benefits, you must devote time to learning those skills. Luckily, you can take many free courses via websites and apps, and there are plenty of books available as well.

However, most people start working as a residential real estate agent after completing either college or technical school, so why not boost their education while supporting others in their career? It is a worthy investment that almost anyone can make.

Flat fees

how should real estate agents be paid

The most common way to pay real estate agents is via a flat fee. This is usually for a specific amount of services, such as listing a house or selling a property.

The agent is paid their fee at the end of the transaction, when it’s done. This can be problematic in two ways.

Firstly, if the seller takes longer than expected to sell the home, the agent will have to keep working without being compensated. If the agent doesn’t take this opportunity to find you your next place to live, they risk losing money.

Secondly, if the buyer finds the house too expensive, they may choose not to make an offer, resulting in a loss of revenue for the agent.

Not only that, but because these types of fees are typically used by more experienced sellers and buyers, young professionals who are looking to buy or rent may feel reluctant to work with them due to the cost.

Thinking about how to pay your real estate agent like an accountant would help avoid wasting money on unnecessary expenses.

Hourly rates

how should real estate agents be paid

An increasingly popular way to be paid as an real estate agent is via an hourly rate. This is where you are paid for every hour you work, regardless of whether or not you make a sale while you are at the office.

This can be quite lucrative if you’re in the business of selling large houses or commercial buildings, but it may not feel like enough compensation when you’ve got commitments outside of work that take up time.

If this sounds familiar, there’s another option that might be more appropriate for you!

The traditional commission-based model rewards agents who bring in lots of buyers or sellers, which takes some doing.

Multilevel marketing

As we have seen, direct sales are great for agents if they possess certain qualities that make them successful.

Agents who use direct selling strategies to market homes often do so because it is more efficient than other methods.

A main reason why this method of income generation is becoming less common is due to something called multilevel marketing (MLM).

In fact, some experts refer to direct sale models as one-level sales while MLMs are two or more level sales.

What is the difference? A one level sale means that the seller will take all the steps needed to find a buyer themselves, but they usually pay a premium price for the home.

With an MLM, you will sometimes be asked to recruit additional sellers or reps to earn money from their downlines. This can feel like a never ending process that requires a lot of effort and time.

There are also times when people get paid poorly or not at all in these types of businesses.

Corporate partnerships

how should real estate agents be paid

Another way to earn extra money as a real estate agent is through corporate partners. Companies will sometimes make you an offering of being their brand ambassador, sharing their messages and products via social media or advertisements.

This can be very lucrative for you if you are able to connect with a right company that needs your exposure.

Some of the most well-known brands like Coca Cola and Johnson & Johnson have team ambassadors that get paid large sums per month to promote their product.

By working with companies that offer this type of sponsorship, you too can start earning good money from advertising products you already use.

Warning! Just because someone else does it doesn’t mean it’s effective for me. I won’t be using anyone’s product unless they pay me to try it out so I can give my honest opinion.


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