Imagine earning a real estate broker salary that is more than double what your agents make. According to the 2016 National Association of Realtors (NAR) member profile, this is a reality for many brokers. Whether they earn straight commission or a combination of salary and sales percentage, brokers have the potential to earn significantly higher incomes. In this article, we'll explore the factors that contribute to a broker's income and provide insights into how managing agents and advanced training can command higher pay.
Managing Agents: The Path to Greater Earnings
When it comes to real estate broker salary, managing agents can hold the key to increased income. Mark Ferguson, a broker at Pro Realty in Greeley, Colorado, affirms that most of his agents earn an average of $80,000 per year, while brokers make 40 to 50 percent more. This trend is not limited to Ferguson's experience; nationwide, managing brokers make 70 to 115 percent more than agents, as reported by Bruce Ailion, a broker with RE/MAX Town and Country in Atlanta, Georgia.
However, it's worth noting that the top managing broker actually earns 75 percent less than the top agent. This highlights the importance of not just managing agents but also excelling as an individual in the field. Ailion emphasizes that managing brokers need to possess not only real estate expertise but also strong leadership skills. Recruiting and retaining top talent, recognizing potential, and holding people accountable are critical competencies that drive the success of a brokerage firm and ultimately contribute to the broker's compensation.
The Unique Journey of a Managing Broker
To understand why real estate brokers have the potential to earn higher incomes, it's important to recognize the unique path they follow. While agents can start their careers directly, brokers are required to undergo additional training, pass comprehensive exams, and gain experience by working as agents themselves. This journey ensures that brokers possess a deeper understanding of the industry and are well-equipped to guide and mentor their agents.
According to Ailion, most brokers start as agents and gradually transition into broker roles as their personal business grows. As their administrative needs increase, they begin hiring assistants and additional agents to support their growing business. Over time, they may discover that they excel in the administrative aspects of real estate and have a knack for attracting talented agents. This realization often leads to the creation of a brokerage firm or an opportunity to join an established brokerage as an assistant broker or broker.
While managing brokers might still engage in some real estate sales, their primary focus shifts to recruiting agents, resolving issues, providing training, and overseeing office management. It's more of an administrative function that requires a keen eye for talent, problem-solving skills, and the ability to create a positive workplace culture. Both Ferguson and Ailion find fulfillment in these management aspects of their roles, where they can shape the direction of their organizations and explore innovative ways to drive profitability.
Caption: Real Estate Broker
Unlocking the Highest Salaries: Geographical Factors
While managing agents and advanced training play a vital role in increasing a real estate broker's salary, geographical location also contributes significantly to income levels. The U.S. Bureau of Labor Statistics reveals that real estate brokers in the District of Columbia earn the highest annual mean wage at $148,730, followed by New Hampshire at $132,600 and Nevada at $121,440. Similarly, metro areas such as Tacoma-Lakewood near Seattle, Honolulu, and Cincinnati boast the highest annual mean wages for brokers.
Conversely, brokers in the Piedmont and Southeast Coastal areas of North Carolina earn the lowest annual mean wage, typically in the $40,000 range. These variations highlight the influence of local market dynamics, demand for real estate services, and economic factors on broker salaries.
Conclusion
Real estate brokers have the potential to earn significantly higher incomes than their agents by leveraging their management expertise, attracting talented agents, and creating thriving brokerage firms. With the right combination of industry knowledge, leadership skills, and a keen eye for profitable opportunities, brokers can unlock their earning potential. However, it's important to note that geographical factors also influence income levels, with some locations offering higher salaries than others.
If you aspire to be a real estate broker, take the time to invest in your education, gain experience as an agent, and develop the essential skills needed to excel in this role. By doing so, you can pave the way for a rewarding and lucrative career in the ever-evolving world of real estate.
Article by Roni Robbins. Roni Robbins is a 30-year journalist with business, environmental, and real estate specialties. She wrote real estate articles for Mother Nature Network, the Daily Report, and Atlanta Journal-Constitution. She also reported for the New York Daily News, WebMD, and Adweek with stories picked up by the Huffington Post, Forbes, USA Today, and CNN. Find out more about Roni here.
