The Average Real Estate Broker Salary in Each State

Real estate brokerage can be a rewarding and lucrative career for those who excel in it. However, 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.

How much do real estate brokers make on average?

Our comprehensive research pulls from the following sources: VanEd, The Close, Agent Advice, StateRequirement, Zippia, Glassdoor, Indeed, and ZipRecruiter. Our custom summary reports that the average annual salary of real estate broker-owners in the United States is $80,507.

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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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.

Average real estate broker salary, state by state

Here’s a breakdown of the average salary for real estate brokers by state.

The highest-paying states for real estate brokers

The top five states with the highest real estate broker salaries are New York, California, Washington, Nebraska, Delaware, and Arizona.

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.

The lowest-paying states for real estate brokers

These states include Iowa, Florida, West Virginia, Missouri, and Oklahoma. 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.

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 in 2023 was higher than that of real estate agents, property managers, and appraisers. Brokers who manage teams or own their own brokerage may even earn incomes similar to corporate executives, especially if they handle high-value markets.

However, brokers’ earnings can fluctuate more than those of salaried professionals in related fields like real estate finance or property law, who typically enjoy more stable, predictable incomes.

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.

The portion of a broker’s income that comes from their agents’ commissions is highly variable and depends largely on the agent’s contract with the brokerage. It’s also important to note the difference between a broker and a broker-owner. A broker-owner owns the brokerage entity, which means that they get the entire portion of their commission. A broker who isn’t an owner has to split their commission with their broker-owner.

Finally, don’t forget that income from agents doesn’t usually go wholesale into a broker’s pocket; this is the revenue they use to operate the business. Agent splits are the main driver fueling rent, utilities, technology costs, franchise fees, and more.

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How much do real estate brokers make compared to agents?

Real estate brokers tend to make more money than the agents working in their brokerage, but not always. Remember, brokers are paid a base salary for managing the brokerage business, as well as a portion of each of the commissions earned by the agents in the firm.

However, that portion of agent commissions is usually capped at anywhere between $15,000 and $30,000 per year. This means that if a brokerage has a $20,000 annual commission cap, a broker can only earn $20,000 per year from each of those agents, assuming they do enough business to meet that cap. For a brokerage of 10 agents, this would generate a maximum revenue of $200,000.

Agents, on the other hand, have no cap on what they can earn; they get paid for every contract they close. So, while it’s not something that happens often, there are years in many brokerages where agents out-earn their brokers.

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.

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.

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.

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