The global real estate industry has grown to over $10.5 trillion in value, making it one of the most potentially lucrative professional undertakings for people seeking high-value careers. The industry has many paths to entry, one of which leads to real estate brokerage.
If you’re a real estate agent looking to take your career to the next level, or if you’re simply interested in pursuing a real estate career path, here’s what you need to know.
What Is the Difference Between a Real Estate Broker and a Real Estate Agent?
Real estate brokers are a step above real estate agents on the career ladder. One cannot simply begin a career in real estate brokerage. Brokers start their careers as real estate agents and work under a broker. Every state has its own requirements for how this career phase is to be completed.
After they’ve “hung their licenses” on the wall of a firm for a while, they’ll have the opportunity to become a real estate broker. Once they’re eligible to take their state’s brokerage exam and they successfully pass, a new world of opportunities opens up for them.
Some real estate agents choose to stay real estate agents indefinitely because they aren’t interested in the new responsibilities and complexities that come with becoming a real estate broker, and that’s perfectly fine.
Real estate isn’t a career track that requires advancement in order to be successful. It’s always possible to maximize success and achieve a better salary, no matter where someone sits in the hierarchy.
Working For Themselves
Real estate brokers are self-governing. They work for themselves, and they don’t report to an immediate boss. Some brokers continue to act as real estate agents and may simply remain as solo agents with the perk of keeping more of their commission for themselves.
Brokers have the option of hiring other real estate agents or establishing a firm if they’re looking to expand their business outside the realm of solo practice. Brokers who supervise other real estate agents and employees can continue to work as real estate agents but often devote themselves to their supervisory titles. They oversee the actions of the agents reporting to them, and their salary comes out of the commission from the sales those agents make.
Because real estate brokers can vary significantly in the way they use their titles, this can skew the average salary of the career path significantly. Brokers that continue to act as real estate agents while managing a large team of real estate agents will inevitably rack up a much higher salary than brokers with a limited focus.
Average Real Estate Broker Salary by State
According to US census data from 2019, the average real estate broker salary in the United States is $59,720.00. Given the number of variables in the way real estate brokers choose to practice and the wide range of salaries, the average salary may not be indicative of the salary someone would make working as a broker. It’s important to put the data into perspective.
Here are just a few examples of salaries by state:
- Alabama – $45,700.00
- Alaska – $66,560.00
- Arizona – $52,830.00
- California – $68,390.00
- Colorado – $63,110.00
- Massachusetts – $68,850.00
- Michigan – $79,730.00
- New Hampshire – $66,850.00
- New Jersey – $100,482.00
- Texas – $72,460.00
- Utah – $48,200.00
- Washington – $60,560.00
- West Virginia – $86,314.00
- Wisconsin – $72,910.00
State average salaries for real estate brokers span a vast range. The lowest average salary is in Illinois at $29,860.00, a salary comparable to a school janitor. Minnesota sits at a shocking high of $407,808.00, which is higher than the salary of the President of the United States. On the surface, this seems like a perplexing disparity. How could the salary range be so wide for the same job?
The answer lies in best practices and real estate market trends. All brokers operate differently, and every community needs to be served in a specific way. Although the averages are significantly different, there is no minimum or maximum salary for a real estate broker position. The job is what you make of it, and you can leverage the position any way you’d like to.
Where Do Real Estate Brokers Make the Best Salaries?
Real estate brokers in Minnesota, North Dakota, New Mexico, Montana, New Jersey, Rhode Island, Connecticut, Iowa, and West Virginia will typically take home the largest salaries. That doesn’t mean you should move to a different state to practice as a real estate broker.
If salary is a significant factor in your career decisions, you can stay where you are and play the long game. Building a reputable brokerage firm and hiring a wealth of talented real estate agents can grow your business (and your income) exponentially. You only need to make a significant impression in one major metropolitan area to amplify your earning potential.
How To Make a Great Salary as a Real Estate Broker
Becoming successful as a real estate broker is a matter of cleverly approaching your opportunities to earn. The bigger and stronger you build your firm, the more success you’ll experience as a direct result.
Assembling a Dream Team
If you choose to start a real estate firm, selectively hire real estate agents who show promise and are willing to learn. Your mentorship will help your agents to become more successful, and you share in their success. Take your time to get to know every agent who wants to work with you.
Make resources available to the real estate agents who work with you. Invest your time in helping them succeed as agents the way you succeeded as an agent. Pass down the knowledge you’ve gained through your experience, and directly partner with agents who may need a little more help.
Building a Flawless Reputation
Your community needs to be able to recognize and trust your firm. Your firm will be their starting point for finding a real estate agent that meets their needs. Once you’ve built a reputation in the area, people who need your services will know they can come to you.
Consider your branding carefully. Showcase testimonials from satisfied clients. Establish yourself as an authority in your community and work to build trust. Make sure every member of your team is unified within your vision for your firm’s success.
Consistency is an important part of your reputation. Everyone who works with your firm should expect to receive the same quality of service. There will inevitably be difficult or unique situations that won’t pan out exactly how a client had hoped, but the goal is always to provide an outcome as close as their ideal outcome as possible.
Every client you serve is an opportunity to fortify your reputation, and if you can deliver that ideal experience consistently, your reputation will build over time.
Using a Real Estate Coach
Learning allows us to be the best that we can be, and learning is a lifelong process. Everything you know will change and evolve, and continuously learning is the best way to ensure that you’re always equipped to be a leader in your field. Real estate coaching can help you soar to new professional heights.
Even though you’ve already achieved success as a real estate agent, it’s important to remember that success rarely has an upper limit. Harris Real Estate University is designed to inform and empower real estate professionals by providing them with tools and market-tested strategies to optimize their approach to their local markets.
Managing your workflow, generating leads, and finding new opportunities are crucial to your success in the industry. Our certified coaches are prepared to teach you how to dominate your area by utilizing the best practices for success in any market condition.
Sources:
Full-Time, Year-Round Workers and Median Earnings: 2000 and 2013-2019 | US Census Bureau
7 Ways to Set Up a New Hire for Success | Harvard Business Review
Beat Your Competitors with the Best Reputation | Better Business Bureau
