According to the National Association of Realtors (NAR) member profile, the median real estate broker salary in 2015 was $66,670, up slightly from 2014 when the median salary was $65,300. If you’re looking for the median salary of real estate agents, check out our guide on real estate agent salaries here.
How much real estate brokers make varies widely depending on whether you run your own brokerage and the size of that firm. In this guide, we’ll show you how much a typical real estate broker can make, as well as discuss the different types of brokers and expenses they might incur in order to run their business. Specifically, we’ll cover the following:
- How Much Is a Real Estate Broker Salary?
- What is an Associate Broker?
- What is a Managing Real Estate Broker, or Broker-Owner?
- How Many Real Estate Brokers Own Their Brokerage
- Common Real Estate Broker Expenses
If you’re thinking about taking the leap from agent to broker, start now. The process can be time consuming, but the benefits are great. You’ll be able to negotiate higher commission splits, and finally truly work for yourself and open your own brokerage.
In order to get there, you’re going to have to take broker pre-licensing classes. We recommend Kaplan, which offers top-notch real estate licensing programs online. Click here to visit Kaplan, or read more in our Step-by-Step Guide to Becoming a Real Estate Broker.
How Much Is a Real Estate Broker Salary?
|Real Estate Agent||Associate Broker||Broker-Owner|
|Median Gross Income (2015)||$27,260||$54,910||$86,400||$102,200|
|Median Expenses (2015)||$4,500||$9,000||$14,710||$3,000|
*Source: NAR 2016 Member Profile
The first thing to note is that most real estate brokers do not actually make a salary. Instead, they earn a commission on real estate that they or their agents sell. For simplicity’s sake, we’ll use the term salary in this article.
The gross median salary (i.e. salary before expenses were taken out) for licensed real estate brokers was $66,670 in 2015, according to NAR data. This is up slightly from 2014 where the median gross income for real estate brokers was $65,300.
Compared to this, real estate agents in 2015 had a median income of $39,200. A big part of the reason that salaries for real estate brokers were significantly higher than sales agents is the fact that there are far fewer part time real estate brokers, and all real estate brokers have some experience, which means they get a larger percentage of their income from repeat and referral business.
That being said, the income of real estate brokers varies widely based whether they’re an associate broker or managing real estate broker/broker-owner, and on whether or not they sell homes themselves. Let’s take a look at the different types of real estate brokers.
What is an Associate Real Estate Broker?
A licensed Associate Real Estate Broker is a real estate professional who has a real estate broker’s license, but chooses to work for a brokerage instead of opening their own brokerage.
While there are many reasons why someone with a real estate broker’s license would choose to work for another broker instead of opening their own brokerage, the most common reason is lower risk and generally lower monthly expenses.
As you can see from the chart above, the median salary for an associate broker in 2015 was $54, 910. While this is significantly higher than the median salary for sales agents, it is still much lower than the median salary for Managing Real Estate Brokers or Broker-Owners.
What is a Managing Real Estate Broker, or Broker-Owner?
If a real estate broker owns the agency they are working at, they are what is known as a broker-owner or designated real estate broker. If they also choose to manage the agents and associate brokers working there, they can also be called a managing broker. However, they may decide to hire another broker to manage their agents and associate brokers. In this case, they would be considered a designated broker or broker-owner, while the agent they hire to manage their agents would be considered the managing broker.
All real estate agents must be sponsored by a broker-owner or managing broker. Some agents seek to become managing brokers/broker-owners so they can sponsor other agents, and thus keep a portion of their commissions in return for sponsoring them. Others become brokers so they can “sponsor themselves” and keep 100% of their own sales. They may or may not sponsor other real estate agents and keep a portion of their commissions.
As you can see from the chart above, there is also a vast difference in expenses for broker-owners who continue to sell property and those who do not. This is because these brokers still have to pay for marketing their own listings.
For more information, check out our guide Real Estate Agent vs Broker: Education, Responsibilities and Salary.
How Many Real Estate Brokers Own Their Brokerage?
In 2016, roughly 35% of all Real Estate Brokers had sole ownership of their brokerage. In other words, most of these brokers started their own small, boutique firm that they own outright. A small percentage own franchises of larger franchise brokerages. Another 47% have no ownership at all of the real estate brokerages they work for. They might be associate brokers working essentially as agents, or managing brokers working under another broker-owner.
Common Real Estate Broker Expenses
While real estate brokers can make a sizable income, they also have fairly large expenses. From advertising to equipment, technology, automobile expenses, and more, associate real estate brokers spend a median of $10,500 per year. Median expenses for broker-owners was $14,710 in 2015. There’s a pretty wide range of how much real estate brokers spend:
Typical Expenses for a Real Estate Broker
|Expense||Median Cost (2015)|
|Administrative Expenses (office supplies, equipment, phone bill)||$1,400|
|Marketing and Promotion (online ads, print ads, email marketing)||$1,300|
|Professional Development (real estate coaching, seminars, continuing education, etc.)||$900|
|Office lease/building expenses||$600|
|Technology (website, CRM)||$870|
*Source: NAR 2016 Member Profile
Adding up all these costs, the total is more than half as much as the median of $10,500. That’s because there’s a pretty wide range of expenses whether you’re a broker-owner and run your own business, or you’re a associate real estate broker and work for another broker. If you’re a broker-owner you may have to pay office & technology costs for your entire team of agents as well as expenses for recruiting and training new agents.
The Bottom Line
Although there’s a pretty wide income range for real estate brokers, in general they make a lot more than real estate agents. The median gross income for real estate agents in 2015 was $27,260 – almost half as much as the $66,670 median income for brokers.
If you’re a real estate agent who is interested in becoming a real estate broker, learn more about the process in our guide Real Estate Agent vs Broker: Education, Responsibilities and Salary, or check out our step by step guide on how to become a real estate broker. Also, check out our review of Kaplan, our recommended online real estate school, which offers training courses for broker licensing.