Are you looking for a profitable position in real estate that you’ll also love? If you have experience in real estate, strive to become a broker. This position will earn an impressive income and you’ll rise to the realty ranks.
But what is a broker? In short, a real estate broker oversees a group of agents.
They either run their own business or are hired to run an office for a larger real estate firm. Real estate brokers need at least two years of experience as an agent and to pass the broker’s real estate exam.
But what is the real estate broker salary? Is all of this work worth it? Here’s your guide to how much a broker makes.
The Average Real Estate Broker Salary
On average, a real estate broker makes about $90,000 a year.
But that doesn’t mean you will make this much. You make this salary when you manage between nine and thirteen realtors and how much commission you make from your agents.
Most brokers don’t actually make a salary. They make a commission off of their own sales and/or their agents’ sales. But if you work for a major brokerage or real estate firm, you’ll likely make a salary.
As a broker, your salary depends on a few different things:
Just becoming a broker is only the first step in your career. Continue reading to find out the ways you can advance as a broker and how your salary can reflect a promotion.
The Different Types of Brokers
Being a “real estate broker” is actually more complex than you think. There are three main types of real estate brokers. The company also matters — a broker who works in a firm is different than one who owns one.
Here’s an explanation of the different real estate brokers:
Associate Real Estate Broker
This is a real estate broker who has a brokerage license but works at a firm instead of managing one on their own. These brokers are usually also sellers.
Associate brokers can be just as successful as the broker who owns or manages the firm. But they choose the associate position because they have lower monthly expenses and have lower risk on a variety of levels.
The median salary for associate brokers is $56,000. It’s lower than the salary of a broker who owns or manages a firm, but it’s a lot higher than a real estate agent’s salary.
This is a good position if you’re considering advancing as a real estate agent but don’t want to jump into opening or managing a firm.
Managing Brokers
Managing brokers are brokers who don’t own a firm but still manage the firm.
Managing brokers usually work at offices of major real estate moguls. These companies have individual offices set up in different cities and states and often run an individual office.
Managing brokers can also be hired by smaller and privately owned real estate companies. This occurs when the broker-owner needs assistance or can’t be at the office during day-to-day office hours.
The main job of a managing broker is to oversee the real estate agents and associate brokers. They can also sell themselves.
The average salary of a managing broker is $97,000. But a managing broker has a lot of stress managing all of their agents and managing their own clients (if applicable).
Broker-Owners
Broker-owners, or designated owners, own a real estate firm.
A broker-owner is the main person responsible for sponsoring real estate agents, though this role can also be given to the managing broker. “Sponsoring” means they keep a portion of all of their agent’s commissions.
Some broker-owners don’t have agents under their belt. They run their own business and do their own sales. This means they keep the entirety of their commissions.
As a broker-owner, you also have a choice to sell or not. Broker-owners who sell make the most money. The commission difference can 17% of entire sales versus 13% of entire sales.
In general, the average broker-owner salary with selling is $147,000 and $142,000 without selling.
Regardless of whether or not you sell, broker-owners have a lot more expensive. The owners have to pay for their marketing and all of the other expenses required by owning a real estate business.
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Hours Worked
The amount you make also depends on the number of hours you work.
If you’re a broker-owner or manager, expect full-time hours right off the bat. But an associate broker can get away with working part-time since they don’t own their business.
Managing brokers are the ones who work the most hours. They don’t make their own schedules and have more duties on their plate. These hours can increase over time if they manage their own clients as well as their staff.
The average broker, no matter what position, works an average of 40 hours.
Common Broker Owner Expenses
The expenses needed to manage a real estate firm have come up a couple of different times. If you strive to own a real estate firm, you should know how much of your revenue is needed to cover these expenses.
This includes:
- General administrative expenses (equipment, phones, etc.)
- Marketing and promotion
- Professional development (real estate courses and seminars)
- Lease and building expenses
- Technology (computer, website)
- Vehicle expenses
With these expenses adding up, you could spend on average $7,300 a month.
Will You Become a Real Estate Broker?
If you’re already a real estate agent, a real estate broker is your next step in advancing in your real estate career. But there are lots of different broker career options you have, therefore there are lots of different salary options.
To know which broker job you want, compare each real estate broker’s salary with the hours you work and your workload. Regardless of the role you choose, you’ll be satisfied with your job as a real estate broker.
Are you looking to get a broker license or start your own company? Take a look at our services.