Do Real Estate Agents Make Too Much Money?

Before we get started on the topic of whether real estate agents make too much money, let me be clear that I am not about to tell you how much money I earn as a top producing Sacramento Broker, because how much I earn as a real estate agent is not what this blog about, plus it’s kinda gauche to discuss. I’d like to talk about how those in the 1%, whether it’s all people in the world or just the top agents in any given community, are often looked down upon and intensely disliked simply because they earn more money than somebody else. It’s like everybody gets dumped into one category, being earning more than the person who is upset about it earns.

A retired elderly friend of my mother’s was like this. He used to mail me cartoons cut out of newspapers about denigrating the wealthy, which also included attacks on real estate agents. It was as though he could not be a good defender of the downtrodden, or an effective political activist trying to right wrongs, without slamming those with a net worth higher than his.

Do some real estate agents make too much money? A few, perhaps, you’ve met some of those, but most agents also earn exactly what they are worth. You’d probably be surprised to know that the average salary of a real estate agent in the United States is less than $50,000. Out of that, agents expect to fork out overhead expenses, medical and insurance costs, federal and state taxes, so they’re lucky to end up with half that amount, if that.

When sellers sometimes ask if I will discount my commission, my answer is always the same. I don’t mind the fact they asked, but my answer is no because they are paying for superior service. They are paying for assurance that the million and one mistakes I have made and observed over the past 40 years won’t happen to them. What I have learned and pass down to them has a dollar value. That assurance carries a dollar value. If sellers want a less experienced agent, they can certainly hire that kind of agent for less money.

If they want a full-service agent who is dedicated to focusing on their needs and producing results, then they agree to pay my fee. I will fight tooth and nail for them to protect my client’s financial interests, which means that small bump that I charge over many other agents makes its way back into their pockets at closing. Do real estate agents make too much money? For what I do, I earn what I am worth. Just ask my clients.