How Much Do Real Estate Agents Make in Arizona?

Have you been thinking about a career as a real estate agent in Arizona? Smart choice! The average real estate agent in Arizona makes around $61,000 per year. However, many agents are making $100,000 or more! We’ll dig into the exact figures right after we explain how Arizona real estate agents are paid. 

How Real Estate Agents Are Paid in Arizona

Real estate agents work on commission. This means they are paid a percentage of the sales price when they close a deal. This puts the earning potential in the hands of the individual agents. You can earn as much or as little as you want. 

How Much Do Real Estate Agents Make in Arizona?

According to the most recent data from the U.S. Bureau of Labor Statistics (BLS), the annual mean wage for AZ real estate agents is $61,410 (as of May 2023). This works out to $29.53 per hour.

As you would expect, this rate varies by market, with agents in the Phoenix-Mesa Metro earning $63,850, while those along the Eastern border earn $67,810. In the lower-priced Lake Havasu-Kingman market, agents are averaging $50,820. 

However, top-producing agents can make bank! In the Flagstaff area, for example, agents in the 90th percentile average $132,370!

Average Commission Rates for Real Estate Agents in Arizona

The commission rate for real estate agents is negotiated between the agent and the buyer or seller they represent.

A recent poll found that listing agents in AZ typically earn 2.78% of the price, and buyer’s agents typically earn 2.62% of the price. 

Commission Structure Changes from the 2024 NAR Settlement

Before August 2024, it was standard practice for home sellers to pay a commission of 5-6%, covering both the listing agent and the buyer’s agent.

But then a few sellers got together and filed a lawsuit against the National Association of REALTORS (NAR), arguing that sellers shouldn’t have to pay for the buyer’s agent. The lawsuit resulted in a NAR settlement. As part of the settlement, the buyers are now responsible for their buyer’s agent’s fees.

While the industry is still working through this change, we’re seeing sellers step up to help buyers. Many sellers currently offer cash concessions that buyers can use to cover their agents' fees. This makes the seller’s listing more appealing to buyers who can’t afford to pay their agents out of pocket.

Arizona Broker Splits

When you get your Arizona real estate license, you’ll need an AZ real estate broker to oversee your work. The broker makes sure you’re working within legal and ethical boundaries. They also usually provide services like desk space, training, and maybe even marketing. Of course, they expect to be paid for all this. 

That’s where broker splits come in. You split your commission with your broker. New agents might have a 50/50 split since the broker is investing so much in helping you establish your career. As you gain experience and require less from your broker, you can renegotiate your split. Top-producing agents might have a 75/25 or 80/20 split. 

Setting Aside Some of Your Commission for Taxes

Since real estate agents are independent contractors rather than employees, brokers don’t have to withhold taxes from commission checks. You’re responsible for saving money to pay your quarterly estimated taxes.

Tax rates vary depending on your tax bracket. But it’s usually a good idea to save 30% of every paycheck for taxes.

Example of an Arizona Real Estate Commission Calculation

Assume you sell a house for $500,000. According to the listing agreement negotiated with your sellers, you get a 2.75% commission. This gives you $13,750 on closing day.

If you have a 60/40 broker split, you’d pay $5,500 to your broker, and you’d keep $8,250. This $8,250 is the gross (pre-tax) income from this deal. 

Then you save 30% for taxes, leaving you with a net of $5,775 from this one transaction. 

If you sell just one home per month at this rate, you’d earn a gross annual income of $99,000 and net $69,300!

Start Earning Money as a Real Estate Agent in Arizona

Arizona is an exciting place to start a real estate career. The short road to your license begins with the Arizona real estate pre-licensing course. It is a 90-hour class you can take online from an approved school like Aceable. We offer on-demand classes for the Arizona license course so you can easily fit your education into your life. 

Enroll today and start on the path to your career as a real estate agent in Arizona!