Most real estate agents work on commission only, meaning they get paid when a deal closes, no salary, no hourly wage. But alternatives exist, including referral-only and flat-fee models with minimal overhead and full flexibility.
If you’re exploring a career in real estate, or reevaluating the one you already have, you’ve likely asked yourself: Is real estate really commission only? And if it is, how do agents actually make money? More importantly, is it sustainable?
This guide breaks down how commission-based real estate actually works in 2025, what’s changed, and what options agents have today. We’ll cover how agents are paid, who pays them, and why many are moving away from traditional splits in favor of smarter models.
Let’s dig in.
Understanding the Real Estate Pay Model
In most real estate careers, income is directly tied to performance. That means you don’t get paid unless a transaction closes. There’s no hourly wage, no guaranteed salary, just commission.
The commission itself usually falls between 5% to 6% of the home’s sale price, which is then split between the buyer’s agent and the listing agent. Each of those agents may then share a portion with their brokerage, depending on the structure.
So if a home sells for $400,000, that’s roughly $24,000 in total commission, often split four ways.
This model isn’t inherently bad. In fact, it rewards hustle, self-direction, and entrepreneurial thinking. But it also creates risk, especially for new agents with no pipeline or financial cushion. If you’re not closing deals, you’re not earning, simple as that.
What Do Most Realtors Actually Make?
Most agents fall into one of three categories when it comes to commission splits:
- 70/30 or 80/20 splits: The agent keeps 70% or 80%, and the brokerage keeps the rest.
- Flat-fee models: The agent keeps 100% of the commission and pays a small, fixed amount per transaction (e.g., $100–$500).
- Tiered splits or caps: Some brokerages start at a lower split but offer better terms as you hit volume milestones.
According to national data, the median gross income for Realtors was around $56,000 in 2024, but that number drops dramatically in year one, often below $10,000.
Why? Because it takes time to learn the ropes, build relationships, and get clients under contract. Add in expenses like MLS access, marketing, and licensing fees, and it’s no surprise that many agents exit the business within 12–18 months.
Is Real Estate Really Commission-Only in 2025?
The answer used to be a simple yes. But 2024 changed the game.
A major antitrust lawsuit settlement between the DOJ and NAR reshaped how buyer agents are compensated. Historically, sellers paid both their own agent and the buyer’s agent through the listing agreement. But as of 2025, sellers are no longer obligated to pay the buyer’s agent. That responsibility now falls on the buyer.
This shift introduced three big changes:
- Buyer-agent commissions are no longer visible on MLS listings.
- Agents must enter a signed representation agreement before showing properties.
- Buyers must negotiate and fund their own agent’s commission.
In other words, agents must now clearly demonstrate their value and secure compensation agreements up front. It’s a more transparent system, but also one that adds friction, especially for new agents without strong buyer pipelines.
The Referral-Only Option (Myth vs. Reality)
Another alternative, and one that’s often misunderstood, is the referral-only license.
Many agents are told that if they’re not full-time, they must hang their license in a “referral-only” brokerage. This usually means they can’t actively represent clients or close deals, just refer leads for a cut of the commission.
But that’s not a legal rule, it’s a model created by certain brokerages (and reinforced by some associations) to keep control over part-time agents.
Referral-only setups can be a smart way to stay licensed, earn passive income, and avoid overhead, especially for investors, parents, retirees, and agents taking a break from the field. And with the right brokerage, you don’t have to sacrifice flexibility to make it work.
Real-Life Worries Agents Have (That You Probably Do Too)
“What if I don’t close anything for 6 months?”
This is one of the most common concerns we hear from new and transitioning agents, and it’s completely valid. Real estate is unpredictable, and a commission-only structure means you could put in 100 hours and walk away with $0 if a deal falls through.
So how do you protect yourself?
- Start part-time. Don’t quit your day job until you’ve closed a few deals or built a consistent lead pipeline.
- Use a 6-month runway rule. Have savings set aside for at least half a year of expenses.
- Explore referral-first models. If you’re not ready for full production, refer deals out and earn passive commission while keeping your license active.
“Can I really afford to go commission-only?”
Before you dive into real estate full-time, do what any savvy business owner would: run the numbers. Here’s what to factor in:
- Start-up licensing fees: $1,000–$2,000 including course, exam, and application.
- MLS access and board dues: $1,000–$2,000/year depending on your region.
- Monthly tools & marketing: CRM, website, signs, lockboxes, lead gen.
Now stack that against your personal living costs, rent, utilities, debt, insurance. If you’re short on runway or risk-averse, commission-only can be overwhelming.
“Will clients even respect what I do?”
A hard truth: real estate agents don’t always get the respect they deserve.
From the outside, it can look like “easy money.” Clients don’t see the hours you spent prepping a listing, coordinating inspections, handling negotiation drama, or keeping a shaky deal from falling apart. And because there’s no hourly invoice, they assume the work was light.
The key? Position yourself as an advisor, not just an assistant. Don’t just open doors, offer strategy, market insight, negotiation leverage, and risk mitigation. Show them what they don’t see.
We remind our agents that respect is earned through professionalism and consistency. Whether you’re working three deals a month or three a year, the value you bring is measurable, and the right clients will see that.
Commission Breakdown: Who Gets What?
Say a home sells for $300,000. The typical commission is 6%, or $18,000 total.
- Seller’s agent: $9,000
- Buyer’s agent: $9,000
But it doesn’t stop there. Each agent typically splits with their brokerage. In a 70/30 split, that means:
- You, the agent: $6,300
- Your broker: $2,700
That’s before you subtract expenses.
What’s Left After Fees?
From your gross, you’ll still need to cover:
- Broker split or flat fee
- Franchise fees, if your brokerage has them
- MLS and association dues
- E&O insurance
- Marketing, staging, photography
- Transaction coordinator fees
By the time you’re done, that $9,000 commission might look more like $4,000–$5,000 in net income.
What If I Don’t Want to Be 100% Commission?
Some real estate teams offer a hybrid setup: they feed you leads, and in exchange, you accept a lower commission split (sometimes as low as 50/50). A few high-volume brokerages even offer salaried agent roles, especially in tech-forward or institutional firms.
These setups can work for some, but they often come with tighter controls, mandatory schedules, and micromanagement. If you value autonomy, these roles may feel restrictive.
Referral-Only or Part-Time Path
If you’re not ready to dive in full force, or you want real estate to fit around your life, the referral-only or part-time approach is ideal.
Here’s how it works:
- Stay licensed without committing to full-time production.
- Send referrals to trusted agents and collect a referral fee (often 25%–35% of their commission).
- Work when you want, without worrying about quotas or sales goals.
How to Succeed in a Commission-Only Real Estate Career: Step-by-Step Guide
If you’re going commission-only, the difference between struggle and success comes down to execution. Here’s how to build a solid foundation:
- Get Licensed: Research your state’s licensing requirements (Florida, Georgia, and Alabama each have their own steps). Choose a reputable pre-licensing course and prepare thoroughly for your exam. Your license is your gateway, but it’s just the start.
- Choose the Right Brokerage: Your brokerage dictates your earnings, fees, and day-to-day freedom. Compare:
- Commission splits (70/30 vs. 100%)
- Upfront and ongoing fees
- Support systems (tech, mentorship)
- Pressure to perform (quotas, desk time)
- Build Your Pipeline: Business doesn’t appear overnight. Start by tapping into:
- Friends and family
- Social media outreach
- Hosting open houses
- Local business networking
- Free content marketing
- Budget Like a Boss: This is a business. Set aside 3–6 months of personal expenses or start part-time until you build consistency. Track your spending and invest only in tools that support lead generation or deal flow.
- Use the Right Tools: Tech won’t replace hustle, but it can amplify it:
- CRM to track leads and follow-up
- Email campaign software for nurture sequences
- MLS access (if active)
- eSignature platforms to close deals remotely
Tools You’ll Need to Thrive
To run lean and stay efficient, we recommend:
- CRM (e.g., Follow Up Boss, LionDesk): Centralize contacts and automate follow-ups.
- eSignature software (Dotloop, DocuSign): Close transactions quickly and compliantly.
- Social content planner (Buffer, Later): Keep your personal brand visible and consistent.
- IDX website or landing page builder: Capture leads passively with home search functionality.
FAQ: Real Estate Commission Model Myths
Myth: You have to split commissions with a broker forever
False. Flat-fee brokerages let you keep everything after a small fee per deal. You’re not bound to revenue sharing forever.
Myth: Bigger brokerages = better tools
False. Many large firms offer bloated platforms that most agents never fully use, and charge you anyway.
Myth: Referral-only = restricted
False. There’s no legal rule that referral-only agents must operate under separate brokerages. That’s an industry myth, not a mandate. At Realty Hub, referral agents keep their license active with full flexibility
Should You Go Commission-Only?
Going commission-only isn’t for everyone. But if you’re strategic and self-motivated, it’s one of the most rewarding business models in real estate.
- If you thrive on autonomy and unlimited income, yes, it’s a great fit.
- If you want part-time flexibility or to generate passive income, consider a referral-only license.
- If you need steady cash flow or don’t have a financial buffer yet, you may want to start part-time or explore hybrid roles.
Whatever your path, the brokerage you choose determines whether your income supports your lifestyle, or drains it.
Ready to Stop Splitting Your Commission?
If you’ve made it this far, you’re clearly serious about your real estate career, but you’re not sold on handing over 30%–50% of your earnings just to get started.
Here’s the good news: You don’t have to.
At Realty Hub, we offer:
- 100% commission with no franchise or desk fees
- $100/year and $100 per transaction, flat and simple
- E&O insurance included
- No MLS requirement, no quotas, and no pushy upsells
Whether you’re a full-time agent, an investor who closes a few deals a year, or someone who prefers to refer clients and earn passively, we have a model that fits.If you’re ready to build your business on your terms, join Realty Hub today.