You must be specific when asking any question involving New York salaries. For example, have you asked yourself ‘how much do real estate agents make in New York?’ Or which city in New York do real estate agents make the most? We could even get more specific and ask how much do real estate agents make in Brooklyn vs. Manhattan.
Here’s what we know about New York real estate salaries.
Data from Indeed shows that the average salary of real estate agents working in New York State was $88,607. The average commission for Realtors in NY State was $95,486.
However, the real answer to the question, “how much commission does a Realtor make in NY?” is about 1.5% of the property’s sales price.
We know this answer isn’t satisfying. So we will further explain the typical NYC real estate commission and then give you other factors that determine the average real estate agent salary in New York.
On Average, How Much Do Real Estate Agents Make in New York?
Like most states, the typical New York real estate commission is 6% of the sale. Since Manhattan is known for having the highest real estate prices in the country, you may think that real estate agents living in New York regularly do snow angels in their piles of cash.
However, like other areas of the country, the real estate commission in NY is negotiable. Competition in the industry has driven down the average commission percentage to 5.75%. Expect an even lower commission for luxury properties.
Even if the average NY real estate commission is 5% of the sale, a real estate agent will take home much less.
How do you split your real estate commission in NYC?
The first split occurs between the buyer’s agent and the seller’s agent.
If you are the listing agent for a property that sold for $1,000,000, you will split your 5% commission with the real estate agent who found a buyer. (This split is not always 50/50.)
$1,000,000 x 5% = $50,000
$50,000 divided in half = $25,000
This $25,000 commission you earned as a listing agent (or seller’s agent) is also split with your broker. Your broker earns this money by overseeing your transactions to ensure they are legal and ethical. Your broker can be liable for your mistakes, so they deserve a percentage of the cut.
Your commission split may change as you gain experience, but beginner real estate agents give a good chunk of their commissions to their brokerage. For this example, let’s assume that the split is 50/50. This means that your $25,000 commission is now $12,500.
On top of that, most real estate agents work as independent contractors, which means they have to pay Uncle Sam on their own. Most real estate agents do this by paying quarterly taxes. This means your take-home commission for your million-dollar sale may be closer to $8,750.
While this is a lot less than the original commission – it’s still great money!
What other factors determine how much you’ll make as a real estate agent in NY?
It’s difficult to flatly state the average real estate agent commission in NYC because the real answer depends on many factors.
Hours worked
Some real estate agents work part-time – especially when they first start in the industry. This is understandable, as it can be frightening to give up a regular salary and benefits for a fluctuating NYC Realtor commission.
However, the same study of 9,000 real estate agents showed that the average commissions increased when the real estate agent worked longer hours each week.
Market conditions
Another factor that will affect your real estate commission in New York – and elsewhere across the country – is the market. Those market fluctuations will affect the take-home pay of anyone who works solely for commissions.
Years of experience
How much do real estate agents make in New York? One factor determining this is how many years of experience you have in the field. Your success as a real estate agent depends on your connections, which increase over time. You may also improve your take-home earnings over time by negotiating more favorable terms with your brokerage.
As mentioned earlier, a real estate salesperson in New York must have a broker oversee their transactions. In return, that salesperson will share a portion of their commission with the broker.
One way to potentially increase your earnings as a NYC Realtor is to upgrade your license to become a broker. Colibri Real Estate School (formerly Real Estate Express) can help!
Earn Your NY Broker License with Colibri Real Estate School
Colibri Real Estate School offers a Broker Basics package for those who currently have their real estate license. This package comes with the easy-to-navigate 75-hour broker course, a Principles of Real Estate Practice eBook, a Real Estate Math eBook, and state-approved instructor support.
Before you know it, you will become a leader in your office and increase your income potential.
Begin the process of upgrading your NY real estate license by enrolling in Broker Basics today.
Key Takeaways
- The average salary of real estate agents working in New York/Long Island was $98,343 in 2020.
- Real estate agents work solely on commissions.
- Those commissions are typically split between the buyer’s agent and the seller’s agent.
- The broker overseeing the transactions also gets a split of the commissions.
- New York real estate agents can increase their income potential by earning their NY broker license.
