A real estate broker salary or income can be more than double the agents he or she manages, according to the 2016 National Association of Realtors member profile. Brokers either earn straight commission or a salary and a percentage of sales and profits. More brokers than sales agents work on 100 percent commission, NAR reports. Splitting commission is more common among sales agents.
Broker Mark Ferguson of Pro Realty in Greeley, Colorado, www.investfourmore.com, earns 100 percent commission and also splits sales commissions with his nine-member team. He said most of his agents earn an average $80,000 a year while most brokers make 40 to 50 percent more.
Those figures are higher than the national average. Gross median income last year for brokers or broker associates was $66,670 while sales agents earned $27,260, according to the NAR report. Gross income for brokers ranged from $54,910 for an associate broker to $86,400 for a broker-owner who sells and $102,200 for a broker-owner who doesn’t sell.
Bruce Ailion, a broker with RE/MAX Town and Country in Atlanta, Georgia, said the average managing broker makes 70 to 115 percent more than agents. But the top managing broker makes 75 percent less than the top agent. Ailion, www.LocationLocationLocation.com, works for straight commission and receives a share of the commissions generated by the agents he oversees.
Nationally, most Realtors are sales agents, while 21 percent have a broker license and 16 percent, a broker associate license, NAR reports.
Managing broker skills that can impact real estate broker salary
A real estate broker salary or commission may be higher than an agent’s because the broker is required to receive more training, take a comprehensive test and has to work as an agent for a few years before advancing to broker. Ferguson was an agent for five years before becoming a broker and Ailion, three.
“Most brokers start as real estate agents. As they become more experienced and their personal business grows, they begin hiring administrative assistants and other agents to help process the business they generate,” said Ailion, who is also the managing broker of two other firms.
“They may find they enjoy the administrative aspects of real estate more than the selling aspects. They discover they are a leader and good at attracting agents. At some point, they either start a brokerage firm where they are the broker or a company, either the one they are affiliated with or a competitor recognizes this person’s skills and offers them a position as an assistant broker or broker.”
The most important skills of a managing broker are to recruit agents and retain existing ones, Ailion said. “You need to be likable, engaging, and good at recognizing talent and holding people accountable. Exercising these skills will make the firm successful, and ultimately that drives the broker’s compensation.”
Ailion and Ferguson said they both like the management aspects of their job as real estate brokers. Although brokers may sell a bit on the side, they are discouraged from competing with the agents they manage, Ailion said.
“Rather than selling property, they are recruiting agents; resolving problem issues with clients, agents, and transactions; providing training; and overseeing the management of the office. It is more an administrative function,” Ailion said. “Brokers also set the vision, tone, and culture of the organization. Personally, I enjoy the recruiting, training, and problem-solving aspects of being a broker.”
Ferguson likes focusing on the “big picture: making sure the business is profitable, marketing, and coming up with new ideas and new ways to make money.”
Areas where real estate broker salary is highest
Real estate brokers earning the highest annual mean wage were in the District of Columbia, $148,730, New Hampshire, $132,600 and Nevada, $121,440, according to U.S. Bureau of Labor Statistics. The metro areas with the highest annual mean wage were near Seattle (Tacoma-Lakewood) $199,210; Honolulu, $165,870 and Cincinnati, $153,780. Brokers in the Piedmont and Southeast Coastal areas of North Carolina earned the lowest annual mean wage, in the $40,000 range.
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.