What type of compensation do most salespeople, including real estate agents, earn for their work?

Most real estate salespeople earn compensation primarily through commission. This system incentivizes agents to sell homes or close leases because their earnings are directly tied to their performance in transactions. A commission is typically a percentage of the sale price of the property, meaning that the more successful an agent is at closing deals, the more they stand to earn. This payment structure aligns the interests of the agent with those of the clients, as agents are motivated to sell properties at favorable prices, benefiting both parties.

In contrast, a salary would provide a fixed income regardless of the sales volume, which is not commonly practiced in real estate. An hourly wage is also less prevalent in this field because it does not correlate with the commission-based performance metrics that govern how agents earn money. Additionally, while bonuses may be offered occasionally for high-performance or meeting specific targets, they are not the primary form of compensation for most real estate salespeople.

Overall, the commission model is foundational in real estate, directly linking the agent’s earnings to their sales effectiveness.