Earnings as a broker depend on many factors, from regional economic realities to career experience, education, and skill levels.
Here’s a comprehensive look at what affects a real estate broker’s salary. We’ll also include the steps to become a broker, key factors influencing income, comparisons with other professions, and ways to boost earnings.
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How much do real estate brokers make on average?
Our comprehensive research pulls from the following sources: StateRequirement, Zippia, Indeed, and ZipRecruiter. Our custom summary reports that the average annual salary of real estate broker-owners in the United States is $80,507.
In addition to base salary, they also earn an average annual bonus of approximately $17,653, according to SalaryExpert.
What is the average real estate broker salary?
Here’s a breakdown of the average salary for real estate brokers by state.
| Alabama | $70,924 |
| Alaska | $73,025 |
| Arizona | $73,856 |
| Arkansas | $69,882 |
| California | $93,435 |
| Colorado | $81,596 |
| Connecticut | $74,529 |
| Delaware | $88,098 |
| District of Columbia | $83,521 |
| Florida | $62,728 |
| Georgia | $72,057 |
| Hawaii | $81,205 |
| Idaho | $70,332 |
| Illinois | $66,007 |
| Indiana | $69,711 |
| Iowa | $63,463 |
| Kansas | $69,397 |
| Kentucky | $67,661 |
| Louisiana | $66,547 |
| Maine | $76,362 |
| Maryland | $83,728 |
| Massachusetts | $78,886 |
| Michigan | $74,678 |
| Minnesota | $72,109 |
| Mississippi | $76,470 |
| Missouri | $60,291 |
| Montana | $80,030 |
| Nebraska | $91,262 |
| Nevada | $82,019 |
| New Hampshire | $78,772 |
| New Jersey | $80,571 |
| New Mexico | $81,962 |
| New York | $95,352 |
| North Carolina | $79,956 |
| North Dakota | $78,597 |
| Ohio | $72,686 |
| Oklahoma | $58,575 |
| Oregon | $81,295 |
| Pennsylvania | $76,493 |
| Rhode Island | $79,335 |
| South Carolina | $76,534 |
| South Dakota | $75,531 |
| Tennessee | $71,135 |
| Texas | $70,517 |
| Utah | $71,414 |
| Vermont | $83,891 |
| Virginia | $83,944 |
| Washington | $89,511 |
| West Virginia | $66,530 |
| Wisconsin | $76,109 |
| Wyoming | $61,866 |
What are the highest-paying states for real estate brokers?
The top five states with the highest real estate broker salaries are New York, California, Nebraska, Washington, and Delaware.
Remember, though these states offer the highest average pay for real estate brokers, they may require more investment on your part. For instance, while California offers high earnings, it also has one of the highest costs of living in the country.
If you’re considering a move to one of these states, start by talking to brokers in your target area to make informed decisions. Also, be aware of different licensing requirements across states.
What are the lowest-paying states for real estate brokers?
These states include Oklahoma, Arkansas, Missouri, Wyoming, and Florida. Some of these states have relatively low housing prices, which directly impact the commission-based income of real estate brokers. In the case of Florida, there are more agents per capita, increasing competition and pushing down commission rates.
What are salary differences by experience level?
Like many professions, real estate broker salaries tend to increase with experience and leadership responsibilities.
Entry-level brokers with one to two years of experience typically earn $50,900 annually, depending on market conditions and whether they’re starting as independent brokers or team members under a managing broker.
By contrast, senior-level brokers with eight or more years of experience, especially those who own their brokerages or lead high-performing teams, can earn upwards of $114,000, particularly in strong real estate markets. These brokers often benefit from higher commission splits, additional revenue streams, and established client networks.
What are some factors affecting income?
A real estate broker’s income is influenced by various factors, including:
- Market conditions: Economic factors like interest rates, housing demand, and local economic health can directly impact brokers’ earnings. In a booming market, brokers generally see higher commissions as property values and transactions increase. Conversely, economic downturns can reduce income as fewer properties are bought and sold.
- Brokerage size: Larger brokerages often handle more transactions, potentially increasing the commission pool. Brokers who manage a team of agents at a larger firm may earn more than those at smaller, independent brokerages.
- Specialization: Brokers who focus on high-value niches, luxury properties, commercial real estate, or specific types of clients (such as investors) often command higher commissions due to the increased value and complexity of such transactions.
These factors underscore why broker salaries can vary widely and why some brokers consistently earn above the industry average.
Expenses and overhead
One factor that affects brokers’ net income is the cost of running a real estate business. Brokers often cover expenses such as office rent, marketing, licensing fees, and insurance, as well as administrative support, technology platforms, and other operational costs.
Managing these expenses efficiently is crucial for maximizing take-home pay. Luxury brokers, in particular, may spend more on marketing to build brand awareness in high-end markets, which can impact their net earnings.
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What are some additional income streams for brokers?
In addition to commissions and bonuses, real estate brokers can diversify their income by pursuing other revenue streams, such as:
- Property management: Some brokers manage rental properties, collecting fees for services like tenant screening, lease management, and property maintenance.
- Real estate investing: Brokers may invest in properties themselves, generating passive income through rental properties or capital gains from property sales.
- Consulting services: Experienced brokers can offer consulting services to property developers, investors, or other real estate professionals, earning fees for their expertise. This can expand to training or coaching services, and even speaking fees.
Real estate broker salary in context
Income stability and managing market cycles
One challenge brokers face is income stability, as their earnings depend on commission-based sales in a cyclical real estate market. Brokers who thrive in volatile environments are often those who actively manage their finances and plan for market fluctuations. Diversifying income sources, maintaining a strong client base, and budgeting for slow periods can help brokers maintain stability despite market downturns.
Comparison with other real estate professions
Compared to other real estate roles, brokers typically earn more than agents due to their higher qualifications and expanded responsibilities. According to the U.S. Bureau of Labor Statistics, the median annual wage for real estate brokers as of May 2024 was $72,280, while agents earned a median of $56,320.
Income potential varies widely. Top-performing brokers can earn over $166,000, especially those who manage teams or operate in high-value markets. Similarly, the most successful agents can clear $125,000 annually, particularly in competitive regions. Brokers working in real estate and rental and leasing averaged around $71,990, while agents in the same sector earned closer to $52,050. Agents in construction-related industries earned more, with median wages around $61,810.
Do brokers make money from agents?
Typically, the income earned by a real estate broker comes from three places: their base salary, the commissions they earn from directly representing buyers and sellers, and a portion of the commissions earned by the agents they manage.
This third source, agent commission splits, is often misunderstood. A broker earns a percentage of each agent’s commission, but the exact amount depends on the agreement between the agent and the brokerage. Some brokerages operate with annual commission caps, which limit how much a broker can earn from any one agent. For example, if a firm sets a $20,000 cap, then that’s the maximum a broker can collect per agent in a year, regardless of how many deals the agent closes beyond that threshold.
In theory, a brokerage with 10 active agents and a $20,000 commission cap per agent could generate $200,000 in revenue from agent splits. However, that figure doesn’t go directly into the broker’s pocket; it helps fund the operations of the business, covering everything from office rent and utilities to software subscriptions and franchise fees.
It’s also important to distinguish between a managing broker and a broker-owner. A broker-owner typically keeps the full portion of their commissions and may retain profits from the business, whereas a non-owner broker often has to share a percentage with the brokerage’s owner.
Interestingly, while brokers usually out-earn agents, the reverse can happen, especially in years when high-performing agents exceed expectations. Since agents don’t have an income cap, they can potentially out-earn even the most experienced brokers if they’re closing enough deals.
Get three buy-side compensation structures that will appeal to clients while protecting your paycheck. We also include templates with sample language you can use to amend your current buyer’s agreement.Buyer’s agent comp strategies
Career progression: Real estate agent to broker
Most brokers begin their careers as real estate agents, gaining experience in buying, selling, and managing properties. This entry-level role allows future brokers to build their skills, understand market trends, and cultivate a client base.
After meeting state-specific experience and education requirements, agents can then apply for a broker’s license, taking on more responsibilities, including managing other agents, overseeing transactions, and ensuring compliance with legal standards.
What are the education and licensing requirements for becoming a broker?
Agents who are interested in becoming a real estate broker must take specific educational and licensure steps.
Most states require real estate professionals to gain practical experience, usually two to three years as an agent, before applying to become a broker. After taking additional broker-specific classes, candidates must pass a broker’s licensing exam covering brokerage management, real estate laws, contracts, and property management topics.
What are the essential skills and qualities for success?
Successful brokers combine technical knowledge with key interpersonal skills. Communication, negotiation, and problem-solving abilities are crucial in this career, as brokers work closely with clients and agents to manage complex transactions.
A successful broker should also be detail-oriented, analytical, and organized in order to handle the administrative side of brokerage operations and compliance. Persistence, adaptability, and a strong customer service orientation can set brokers apart, as these qualities help them build long-term client relationships and excel in a competitive market.
Brokers may also pursue additional certifications or designations, such as the Certified Real Estate Brokerage Manager (CRB) credential, to enhance their knowledge and marketability. This additional education can help brokers position themselves as experts and, potentially, command higher income.
How Luxury Presence supports real estate brokers
Elevate your brokerage’s success with Luxury Presence’s suite of industry-leading tools designed to help you grow your business, attract top talent, and deliver exceptional results for your clients. Our custom-designed websites provide a polished, professional online presence that reflects your brokerage’s brand and showcases your listings in their best light. Luxury Presence’s marketing solutions, including social media content and email campaigns, ensure that your brokerage stays top-of-mind for both buyers and sellers, driving consistent engagement across all platforms.
For brokerages looking to recruit and retain top agents, our tools include agent marketing support and team branding solutions, helping your agents amplify their reach while maintaining consistency with your brokerage’s identity. With these cutting-edge tools, Luxury Presence empowers you to position your brokerage as an industry leader, offering unparalleled value to your team and clients alike.
Learn how we can help take your real estate business to the next level. Schedule a time to speak with one of our branding experts today.Luxury Presence can elevate your marketing strategy
