most real estate agents are paid through a listing agreement, which is signed by the seller and the listing agent. The agent signs on behalf of the brokerage.
The listing agent then shares part of that commission with the agent who represents the buyer. All real estate commissions are negotiable, and are paid directly to the broker, not the agent. Agents work for the broker. Typically, it is the seller who designates how much the buyer's agents are paid.
A listing commission can vary from 1% to 10% or more of the sales price. Let's look at an example of how much a listing agent earns if the commission paid is 7%, with a 50% split with the brokerage who produces the buyer.
Say the sales price is $200,000. The total commission at 7% would be $14,000, of which $7,000 is retained by the listing brokerage. From that $7,000, the listing agent is paid on a split, which on average is around 60% for a first-year agent.
This means the agent would gross $4,200. After deducting federal and state taxes, which could amount to 30% or more, the agent would net about $2,940. The agent also pays overhead and expenses, which could eat up another 20% of the gross, resulting in a net income of $2,100.