What is the average Salary of a Real Estate Broker? How much You Can Earn

Real estate brokers are professionals who help people buy, sell, or lease properties.

They have to be licensed by the state and work under the supervision of a broker-in-charge.

Real Estate Developer
Real Estate Developer | LENDING TREE

Real estate brokers can earn income from commissions, fees, bonuses, and profit sharing. But how much do they actually make?

And what factors affect their earnings?

In this article, we will explore the average salary of a real estate broker in the U.S., as well as the steps to become one.

ALSO READ : How To Get Into Commercial Real Estate? 6 Easy Steps

Average Salary of a Real Estate Broker

According to PayScale, the average salary of a real estate broker in the U.S. is $67,955 per year as of 2023.

An image of a real estate agent
Real estate agent [photo courtesy of PInterest]
However, this figure can vary widely depending on the location, market conditions, number of agents working under the broker, years of experience, and the broker’s role.

For example, ZipRecruiter reports that the average annual pay for a real estate broker in the U.S. is $91,873 as of October 2023, while Indeed states that it is $68,256 per year as of June 2022.

Real estate brokers earn most of their income from commissions, which are a percentage of the sales price of a property.

The commission rate can range from 1% to 10%, depending on the type of property, the contract terms, and the negotiation skills of the broker.

Some brokers may also charge fees for services such as marketing, advertising, staging, or consulting. Additionally, some brokers may receive bonuses or profit sharing from their brokerage firm or franchise.

Steps to Become a Real Estate Broker

To become a real estate broker, you need to meet certain educational, licensing, and experience requirements. Here are the general steps to follow:

1. Take a state-approved real estate sales course.

This course will teach you the basics of real estate law, finance, ethics, and practice. You need to complete this course before you can take the licensing exam.

2. Pass your state’s real estate agent licensing exam.

This exam will test your knowledge and skills on real estate topics such as contracts, negotiations, disclosures, closing procedures, and agency relationships. You need to pass this exam to become a licensed real estate agent.

3. Work as a real estate agent for a certain period of time.

Before you can apply for a broker license, you need to gain some experience as an agent.

The required amount of time varies by state, but it is usually between two to five years. You also need to complete a certain number of transactions during this period.

4. Take a state-approved real estate broker course.

This course will cover more advanced topics such as brokerage management, marketing strategies, legal issues, and risk management.

You need to complete this course before you can take the broker exam.

5. Pass your state’s real estate broker exam.

This exam will assess your ability to run a brokerage business and supervise other agents. You need to pass this exam to become a licensed real estate broker.

How do brokers make money?

Real estate brokers make money mainly from commissions, which are a percentage of the sales price of a property.

The commission rate can range from 1% to 10%, depending on the type of property, the contract terms, and the negotiation skills of the broker.

Some brokers may also charge fees for services such as marketing, advertising, staging, or consulting.

Additionally, some brokers may receive bonuses or profit sharing from their brokerage firm or franchise. You can read more about how real estate brokers make money in this article or this one.

real estate broker salary vs agent

The average salary of a real estate broker and a real estate agent varies depending on the source, the state, and other factors.

However, in general, it seems that real estate agents tend to earn more than real estate brokers, especially in terms of base pay.

This may be because real estate agents work on commission, which can be higher than the fees or profit sharing that brokers receive from their agents or brokerage firm.

However, some brokers may also earn more by working independently or managing a large and successful team of agents.

Here are some examples of the average salary of a real estate broker and a real estate agent in different states, based on the web search results:

1.In California, the average salary of a real estate broker is $68,390 per year, while the average salary of a real estate agent is $59,830 per year.
2.New York, the average salary of a real estate broker is $80,350 per year, while the average salary of a real estate agent is $93,100 per year.
3.Florida, the average salary of a real estate broker is $37,860 per year, while the average salary of a real estate agent is $43,670 per year.
4.In Minnesota, the average salary of a real estate broker is $407,808 per year, while the average salary of a real estate agent is $39,470 per year.

This may be an outlier or an error in the data.

Conclusion

Real estate brokering is a rewarding career that offers flexibility and growth opportunities.

However, it also requires hard work, dedication, and continuous learning.

The average salary of a real estate broker depends on many factors, such as location, market conditions, experience level, and role.

To become a real estate broker, you need to complete certain courses and exams and gain some experience as an agent first.

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