One of the most common questions people ask is, how much do real estate agents make? The answer involves a lot of variables - years in the business, your niche, full-time vs. part-time and location.
The latter variable is going to have a huge impact on an agent’s annual earnings. To highlight this point, we’re going to take a look at how much agents make in New York and what factors into the commission.
Average Income of Real Estate Agents in New York
Real estate is all about location, location, location - even in terms of agent earnings. NYC is notorious for its high-priced real estate, but other areas of the state, like Buffalo, are much more reasonably priced. Since the median sales price can fluctuate dramatically so does the commission.
According to the Bureau of Labor Statistics (BLS), real estate agents in New York have:
- An annual mean wage of $102,310
- 50th percentile (median) wage of $89,110
- Hourly wage of $49.19
This places New York at the very top of real estate agent earnings in the U.S. Not too shabby!
Commission Splits in New York
Once a sale closes it’s time to split the commission. New York is very similar to the rest of the nation in regards to the amount of commission paid to the listing agent, the split with the buyer agent and the split between the individual agent and their broker. But there are a few caveats.
Commission Percentage on the Sale
The standard commission percentage in New York is 6% (the national norm). However, for properties that are $15+ million, it’s not uncommon for homeowners to limit commission to 4-5% of the sale price.
Listing Agent/Buyer Agent Splits
The vast majority of deals in New York are “co-broke”, which means a 50/50 split between the listing agent and buyer agent.
In New York, the split between broker and agent typically ranges from 40/60 to 65/35. The percentage an agent receives largely depends on the amount of business they bring into the brokerage. The more homes you sale the bigger your percentage split becomes.
The New York Tax Factor
After the other agent and broker take a chunk of the commission Uncle Sam will want his cut. Federal income taxes are broken into brackets based on annual earnings, and independent contractors (like real estate agents) can file as individuals.
Agents in New York also pay the state income tax that’s tiered based on annual earnings. The New York income tax brackets for those filing separate are:
$0 - $8,450 - 4.00%
$8,450 - $11,650 - 4.50%
$11,650 - $13,850 - 5.25%
$13,850 - $21,300 - 5.90%
$21,300 - $80,150 - 6.45%
$80,150 - $214,000 - 6.65%
$214,000 - $1,070,350 - 6.85%
$1,070,350+ - 8.82%
But wait - if you live in NYC you’ll also pay an additional city income tax. The NYC income tax ranges from 2.907%-3.876%.
There you have it! A solid overview of how much real estate agents in New York make and how their take-home earnings are determined.
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