Real estate brokers help buyers and sellers to find each other and negotiate deals. They work with clients to buy, sell and rent real estate properties and do everything that involves property management and marketing. Real estate brokers find customers by promoting, networking, advertising, and offering services to prospective parties.
Real estate brokers may work exclusively in a specific type of real estate, such as residential or commercial properties. Or some may focus on certain types of transactions, such as buying or selling, and then there can be some who handle all kinds of real estate equally.
A real estate broker works for a commercial real estate firm or owns a real estate office, so they must have a minimum of an associate's degree in real estate business or related field and at least three years of work experience.
In some states, like New York, a real estate broker is referred to as any real estate sales representative, regardless of how long they have been working. While in most states, a broker has to practice real estate for the minimum number of years required by the state to qualify for a real estate broker status.
Still, there are a few subsets of brokers:
Real estate agents with a few more qualifications and years of experience lie in this category. They work at brokerage firms, which they do not own, and work with buyers and sellers to help them get the best possible deals.
They take care of the day-to-day operations of real estate brokerage, or they can be responsible solely for different sections of brokerage, like agent licensing or transaction management.
They are the ones who are considered the owner of the brokerage, and they are the end of the brokerage chain where ultimately, money stops. Sometimes, they also play the role of managing brokers.
While it is not mandatory to have an associate broker or managing broker for every office, it is compulsory for every real estate office to have a designated or principal broker to oversee the transactions and ensure everything is happening as per state rules and regulations.
Typically, real estate brokers are paid commission, which may vary depending on the type of property, location, or level of experience of a broker themselves. Interestingly, brokers are likely to earn additional income through commission on sales they had referred to other agents.
According to various sources, the average salary of a real estate broker in the United States ranges between $60,472 and $118,792 per year. However, the median salary for a real estate broker is $50.48/ hour, which sums up to $105,000 annually. And, if this is not astonishing enough, you must know that the top 10 percent of real estate broker salary is $88.46/hour, making it around $184,000 annually, while the bottom 10 percent makes under $68,000 per year.
For the next decade, the pace at which real estate broker employment is expected to grow will be average. Regardless, as the housing market grows, the demand for brokers will follow. And unsurprisingly, New York, Arizona, and Michigan are considered some of the best states to work for real estate brokers in terms of earnings.
The earnings of a real estate broker can be influenced by several factors, including but not limited to the state they work in, type of property they deal with, number of years of experience, and company they work in. Here is a closer look at how some of these crucial factors are influencing the salary of a broker:
The one variable that affects the commercial real estate broker salary is the number of years for which the broker has been in business. Like most careers, the longer a broker stays in the industry, the more they can expect to earn. The science behind this correlation is that as the broker grows old in the business, they continue to develop connections with buyers, sellers, and other agents and brokers, which will make their orb of influence grow. Hence, their ability to capture business will also grow eventually.
Let us see how much experience can impact the salary of a real estate broker, according to the Bureau of Labor Statistics and the National Compensation Survey. An entry-level broker, having less than one year of experience, can earn an average salary of $40,099. While the real estate broker in his early career with experience from 1-4 years can have a salary up to $55,398, when their experience grows to 5-9 years, their salary can jump up to $82,903. And, for a significantly experienced real estate broker, having 10-19 years of experience, the offer on the table can be as high as $124,873. Now, coming to the most experienced real estate broker in the business, with more than 20 years of experience, earnings can shoot up to $223,969.
When it comes to real estate broker job profiles, some places are better for business than others. Since home prices and other factors vary as per location, the amount earned by real estate brokers also varies. Let's have a look at how the average salary for real estate broker changes with different states:
Usually, working in metropolitan areas correlates to a higher salary, but it also results in a higher cost of living.
According to various surveys, the average earnings of real estate brokers can vary up to $35,000 depending upon the niche they specialize in. For example, a broker who specializes in luxury homes has higher earning potential than brokers who deal in simple houses.
The five most profitable real estate specialties that real estate brokers must keep their eyes on are Commercial properties, relocation, foreign investment, investment properties, and green or eco-friendly properties.
The level of responsibility or job role also affects the salary of a real estate broker. A broker who manages agents has more opportunities to earn extra than the brokers who are only dependent on their own income-generating ability.
Who are the successful real estate brokers? They are the ones who can build a client base and maintain good relationships with them. With each passing year, brokers gain more and more experience and build a reputation for being trustworthy and reliable, which helps them bag a lot more clients who are willing to do business with them. Every broker must market themselves and their services effectively.
Moving ahead in their career, brokers eventually become managers or partners in the firms they are working for or open their brokerage firms. While some brokers get involved in real estate-related businesses, others teach real estate courses or pursue careers in real estate law or real estate appraisal.
There are some compelling ways that can help real estate brokers increase their salaries.
Strengthen your skills: Pursuing and improving in-demand skills could make you more competitive for promotions and higher-paying positions, and some of these skills for a real estate broker are property evaluation, contract negotiation, marketing, business development, transaction management, and any other skill that can help in increasing real estate business.
Know Your Value: It is always wise to keep track of the deals you close, the clients you bring in, and the money you save for the company, as these records will help you negotiate with your boss while discussing the raise. Also, this will help you analyze yourself and understand the scope of your improvement.
Negotiate your job offer: Make sure you negotiate your salary while getting your job offer. It becomes really essential in the real estate industry, where the commission is a large part of the income for brokers. By negotiating your pay, you can ensure that you will be getting the best salary package in the industry.
Enhance Knowledge: Real estate brokers, during their entire career, should undergo various training, read books, and take programs that can help them enhance their knowledge about ongoing and upcoming changes in the field of real estate and how to make the best out of the situations.
The real estate agent can earn an average annual salary of $82,898, while a real estate attorney can make up to $100,182 annually, and a real estate salesperson can have $94,096. Where a Leasing consultant can make as low as $31,563, the real estate investor makes a whooping average annual salary of $123,937.
This guide is curated to give you every aspect of real estate broker salary classification with the hope that it will help you make your career decisions.
In this guide, you can learn about every aspect of real estate broker salary, including research, statistics, growth components, influential factors, learning, and outlook for every real estate broker in the United States.