It's easy to feel rich when you cash a $15,000 commission check. You think, "I showed that house 3 times, wrote one contract, and made $15k. I'm a genius!"
But that math is a lie.
Real estate agents are notorious for ignoring the "unpaid labor" that goes into every deal: the driving, the open houses with zero attendees, the paperwork, and the deals that fell apart at the last minute.
If you don't know your true hourly wage, you can't scale your business. You might be working for less than minimum wage without realizing it.
1. The "Big Check" Trap
The "Big Check" mentality is dangerous because it masks inefficiency. If you work 80 hours a week to close one deal a month, you are burning out for a mediocre salary.
The Goal: Your goal isn't just to make more money; it's to make more money per hour. That is the only way to buy back your freedom.
2. Tracking the "Hidden Hours"
To get an accurate number, you need to be brutally honest about where your time goes. It's not just "showing homes."
🚫 The Non-Revenue Activities
- Driving: 30 mins there, 30 mins back. That's 1 hour of work.
- Canva/Social Media: Spending 2 hours designing an Instagram post? That's work.
- Tech Support: Fixing your printer or CRM settings.
- Emotional Support: Listening to a client vent for 45 mins.
Action Step: For one week, use a simple time-tracking app (like Toggl or just your phone notes) to log everything you do related to real estate.
3. The Real Math (Step-by-Step)
Let's run a scenario for an "Average Agent" named Sarah.
Step A: Calculate Net Income (Use our Calculator)
- Gross Commissions: $100,000
- Broker Splits/Fees: -$20,000
- Marketing/Expenses: -$15,000
- Taxes (Self-Employment): -$15,000
- NET TAKE-HOME: $50,000
Step B: Calculate Total Hours
- Sarah works 50 weeks a year.
- She says she works "40 hours," but she answers emails at night and does open houses on weekends.
- Real Hours: 50 hours/week x 50 weeks = 2,500 hours.
Step C: The Division
$50,000 (Net Income) ÷ 2,500 (Hours) = $20.00 per hour.
The Reality: Sarah is a highly stressed business owner making $20/hour. She takes all the risk and has no benefits. She could make similar money managing a Starbucks with less stress.
4. How to Give Yourself a Raise
If your number is depressing, don't panic. Now you have a baseline to improve. There are only two ways to increase your hourly rate:
Option 1: Increase Your Average Price Point
Selling a $1M home takes the same amount of paperwork as a $300k home. If you shift markets, your hourly rate triples instantly.
Option 2: Outsource "Low Value" Tasks
Make a list of everything you do that is worth less than $50/hour.
- Transaction Coordinator ($350/deal): Stop chasing signatures.
- Virtual Assistant ($10/hr): Stop data entry and social media posting.
- Runner ($20/hr): Stop putting up lockboxes and signs yourself.
If you pay someone $20/hr to do admin work, and you use that time to prospect for a $15,000 commission, your ROI is infinite.
5. Frequently Asked Questions
Should I count my commute time?
Yes. Unlike a corporate job, your "office" is your car. You cannot sell houses without driving to them. That time is blocked from doing anything else productive.
What is a "good" hourly rate for a Realtor?
Aim for $100/hour or more. This compensates you for the risk of uneven income months and the lack of benefits (health insurance, 401k match).
Conclusion
Real estate offers unlimited income potential, but only if you treat your time as your most valuable asset. Stop working for free. Track your hours, calculate your rate, and ruthlessly cut out low-value activities.
Ready to see your real numbers? Use the calculator below to get started.