Do Managing Brokers Make More Money than Agents?

If you have been an agent for a few years now, you may be considering becoming a licensed real estate broker. At first glance, the decision to go the extra mile and obtain your broker credentials may be financially motivated. If you are actively licensed, take a look at your current office environment. How many agents does your principal broker oversee? Whether it’s 10, 20, or 200, chances are your broker is collecting a nice income stream from your fellow colleagues’ blood, sweat, and tears. 

(Sourced from US Dept L&S.)

Experience Matters.

Chances are, there once was a day when your managing broker was putting in the hours (and miles) you do, driving all over town showing first-time homebuyers 30 houses over the weekend. That person has paid their dues, literally and figuratively, in past years to sit in the seat they’re in today. The NAR reports that brokers make anywhere between $93,800 to $121,400. This is by far more than the median agent salary shown below.

There are different types of brokers, some competing and others acting as solely principals. A competing broker not only oversees the entire office staff of both administrative roles and agents but also sells real estate. Per NAR, the median for competing managing brokers nationally is $100k. 

Here is an analogy. You are the head bartender at the hottest spot in town. However, some nights, those long shifts are grueling, and you miss out on activities because you’re working until 3 am. You glance at your manager wearing a nicely pressed suit and think, “That guy has it easy!” You may want to think again. That manager may not be covered in beer or have aching feet, but they have lots of paperwork to do long after you have left. He has a corporate office to answer to, P & L statements to prepare, employees to schedule, inventory tracking, training to facilitate, and the list goes on. 

What at first glance may seem like a walk in the park requires a lot of responsibility. If you have met the requirements and are eligible to take the broker’s exam, ask yourself one question: are you prepared for the discipline and responsibility required to oversee an entire office of agents? Consider these factors:

Pros:

• As a broker, you can run your own office. You are the boss!
• As a broker, you will earn more commissions from the agents you manage.

Cons:

• As a broker, you will have legal responsibility for the agents you manage.
• As a broker, you are financially responsible for the office in its entirety.

What may be a pro to one person could be a con to another. If you are ready to take the leap and work towards obtaining your broker’s license, we are here to support you on your journey.