The median real estate broker salary is $65,300. Unlike real estate agents, these are individuals who run firms and/or perform managerial duties.
How much real estate brokers make varies widely depending on whether you run your own firm, and the size of that firm. In this guide, we’ll show you how much a real estate broker can expect to make. We’ll also examine broker expenses like marketing and technology.
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How Much Do Real Estate Brokers Make?
|Real Estate Agent||Associate Broker||Broker-Owner (small firm)||Broker-Owner (large firm)|
|Median Income (2014)||$33,900||$52,200||$79,000||$144,000|
|Median Expenses (2014)||$5,000||$7,700||$12,990||$15,000|
The first thing to note is that most real estate brokers do not make a salary. Instead, they earn a commission on homes they sell, or their agents sell. For the sake of simplicity, however, we’ll use both terms interchangeably.
The gross median salary for licensed real estate brokers was $65,300 in 2014, according to the National Association of Realtors (NAR). The median take home pay after taxes and expenses was $39,600. Our income data comes exclusively from NAR members. Because about half of real estate professionals in the US are NAR members, this is fairly representative of the whole.
As you can see in the chart above, real estate brokers make substantially more than real estate agents. The income of real estate brokers varies widely, however, based whether they’re an associate broker, or broker-owner.
What do these terms mean?
An associate broker works below another real estate broker. A broker-owner, on the other hand, runs their own business.
To explain the difference, let’s first recap what a real estate broker does: A real estate broker is a step above real estate agents. Brokers start out as real estate agents, then undergo additional training and licensing to real estate brokers. Among other benefits, this enables them to run their own real estate business and manage agents.
All real estate agents must be sponsored by a real estate broker. Some agents seek to become brokers so they can sponsor other agents, and thus earn a commission on their sales. Others become brokers so they can “sponsor themselves” and keep 100% of their own sales. Additionally, some brokers earn their license, but continue working under another broker.
As you can see from the chart above, each of these approaches yields vastly different annual salaries. We’ll also explain these trends more further below.
For more information, check out our guide Real Estate Agent vs Broker: Education, Responsibilities and Salary.
What Factors Affect Real Estate Broker Salary?
One of the biggest factors that affect real estate broker salary is whether or not you own your own firm.
Associate brokers do not own their own firm. They work below a broker-owner and have a mix of managerial and salesperson responsibilities. They do not technically sponsor agents, but can step in when the “main” broker is unavailable.
Associate brokers make a median gross income of $52,200, which is about $13,000 less than the median for licensed brokers. This is still almost $20,000 more than the median income for real estate agents, however.
Broker-owners tend to have much higher salaries than associate brokers. Those who run a solo agency or small team earn a median gross income of $79,000. These are agents who still sell homes, in addition to their broker duties.
Brokers who exclusively manage real estate agents (and don’t sell any homes on their own) earn a median gross income of $144,000. These are brokers who run considerably larger businesses.
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, real estate brokers spend a median of $9,160 per year. In reality, however, there’s a pretty wide range of how much real estate brokers spend:
|Expense||Median Cost (2014)|
|Administrative Expenses (office supplies, equipment, phone bill)||$910|
|Marketing and Promotion (online ads, print ads, email marketing)||$720|
|Professional Development (real estate coaching, seminars, continuing education, etc.)||$730|
|Technology (website, CRM)||$720|
Adding up all these costs, the total is almost half as much as the median of $9,160. 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 broker-associate, and work for another broker.
As a business owner, you may have to pay office & technology costs for your entire team of agents. Median expenses for broker-owners was $15,000 in 2014. For broker-associates, expenses were only $7,700.
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 2014 was $33,900 – almost half as much as the $65,300 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. Also, check out our review of Kaplan, our recommended online real estate school, which offer training courses for broker licensing.