Real estate brokers guide their clients, sellers and buyers through the real estate transaction process for commercial and residential properties. Brokers need to undergo special training and have real estate experience to practice, and they typically oversee the transactions of real estate agents who work under them. In this article, we review how much a real estate broker makes with the highest salary by state, how they earn money, as well as broker responsibilities and requirements.
How much does a real estate broker make?
Across the U.S., the average salary of a real estate broker is $68,256 per year. They also make $42,000 per year in commission. However, much of the money a real estate broker makes depends on varying factors.
A broker's specialty could affect how much they make. Some property types have a greater potential for higher earnings than others, such as luxury, commercial or investment properties. The size of the firm also impacts brokers' earnings. A larger firm with more agents means more transactions and commissions. Location is a significant factor. Location determines house prices, buyers' demand and other business costs.
Highest real estate broker salary by state
A broker's salary can differ from state to state. Here's the average salary for a real estate broker by state:
- Alabama: $60,225 per year
- Alaska: $65,375 per year
- Arizona: $59,696 per year
- Arkansas: $60,039 per year
- California: $85,556 per year
- Colorado: $77,926 per year
- Connecticut: $66,918 per year
- Delaware: $63,173 per year
- Florida: $78,787 per year
- Georgia: $75,162 per year
- Hawaii: $62,581 per year
- Idaho: $57,841 per year
- Illinois: $57,570 per year
- Indiana: $60,868 per year
- Iowa: $61,659 per year
- Kansas: $60,580 per year
- Kentucky: $59,566 per year
- Louisiana: $61,018 per year
- Maine: $17.13 per hour
- Maryland: $67,383 per year
- Massachusetts: $64,732 per year
- Michigan: $81,925 per year
- Minnesota: $24.16 per hour
- Mississippi: $57,651 per year
- Missouri: $63,733 per year
- Montana: $58,133 per year
- Nebraska: $60,680 per year
- Nevada: $76,938 per year
- New Hampshire: $62,099 per year
- New Jersey: $67,243 per year
- New Mexico: $90,533 per year
- New York: $71,434 per year
- North Carolina: $58,928 per year
- North Dakota: $62,257 per year
- Ohio: $62,184 per year
- Oklahoma: $49,852 per year
- Oregon: $57,154 per year
- Pennsylvania: $17.98 per hour
- Rhode Island: $63,231 per year
- South Carolina: $60,705 per year
- South Dakota: $28.00 per hour
- Tennessee: $48,563 per year
- Texas: $66,371 per year
- Utah: $65,209 per year
- Vermont: $61,111 per year
- Virginia: $71,313 per year
- Washington: $75,264 per year
- West Virginia: $58,559 per year
- Wisconsin: $23.52 per hour
- Wyoming: $60,309 per year
Related: Jobs That Pay Well
How do real estate brokers make money?
Like real estate agents, a broker usually earns commissions. To buy or sell real estate, an agent must work for a broker. In exchange for training, tools, mentorship and oversight, a broker earns a capped commission on their agents' sales.
Additionally, a broker can earn money through other sources. For example, some brokers charge the real estate agents working under them a fixed monthly fee regardless of their sales for the month. Brokers also have the option of helping their own clients buy and sell property, and earn a commission for these sales and transactions.
Related: The Definitive Guide to Mentorship
Earning more money as a real estate broker
Here are the three types of real estate brokers you can become to earn more money:
Associate Real Estate Broker
Known as "broker associates," these professionals work under a managing broker, with many choosing agent-like sales roles. Broker associates can also choose to focus on other business aspects like marketing, technology or training.
Managing Real Estate Broker
Managing real estate brokers oversee the day-to-day business operation. These real estate professionals do not own a brokerage.
Owner Real Estate Broker
In many states, real estate agents need to work with a broker. Brokers can own their own brokerage and employ brokerage associates, managers and real estate agents.
Real estate broker duties
As the seller's representation, the broker lists the property for sale, advertises it and arranges for viewings, including open house days. They help during negotiations, ensuring the seller receives their desired price.
As the buyer's representation, the broker first determines their needs, finds a property to suit the buyer's budget and requirements, assists the buyer to organize their finances and shows them available property options.
Although some brokers use real estate agents to complete some of these tasks, they must oversee the transaction process in most states to ensure all regulations are met for both parties. Strong communication skills are vital for success in this field. Through the process of the sale, a broker is in contact with the client, other brokers and agents. When it is time to close a deal, a broker negotiates for the client.
Requirements for real estate brokers
Before becoming a real estate broker, you need to work as a real estate agent. Agents work for brokerages, assisting with sales and rentals. States require real estate agents to complete a pre-licensing course. During the course, an agent will learn about real estate finance, legal issues, ethics, taxes, insurance and contracts. On completion of the course, a real estate agent can work for a broker.
After two or more years of experience, an agent can pursue additional training to become a broker. Broker courses include topics relating to the law regarding operating a brokerage, developments and construction, property management, business law and real estate investments. This state-approved broker course can take several weeks or months to complete. Upon completion, a candidate needs to pass their state's examination and apply for licensure.