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What is a Real Estate Broker?
According to data from the United States Census Bureau, 106,548 real estate brokerages operated in the U.S. in 2017. Real estate brokers oversee the real estate transaction process. These professionals may work from home or in offices alongside other brokers. Licensed real estate brokers may even start their own businesses.
A real estate broker typically needs a high school diploma, several years of experience as a real estate agent, and a real estate broker license. Additionally, an MBA real estate degree can set brokers apart from the competition. Pursuing an advanced degree like an MBA in real estate can build leadership skills for brokers, which they use to lead teams of real estate agents.
Read on to learn what a real estate broker does, how much money they earn, and top-employing locations for these workers.
What Does a Real Estate Broker Do?
Real estate brokers handle the sales, leasing, and management of property. They work with clients — including buyers, sellers, landlords, tenants, and property managers — to establish and meet clients' needs related to the sale and purchasing of property.
Real estate brokers also advise on financial matters related to real estate transactions. They are responsible for managing financial resources to build and maintain their business enterprises.
Because real estate markets can fluctuate rapidly, it can be difficult to identify properties that satisfy clients' needs. Successful real estate brokers, including those with an MBA in real estate, understand current market trends and use them to advise clients when to buy or sell.
Key Soft Skills for a Real Estate Broker
Communication: Real estate brokers must ask questions and incorporate responses from clients to make transactional decisions. They also explain different aspects of the real estate and update clients throughout the selling and purchasing processes.
Organization: Real estate brokers need organizational skills to keep track of property listings, appointments, and clients. Strong organization also helps ensure brokers maintain a keen eye for detail, which they use to navigate complex real estate transactions.
Analysis: This soft skill allows real estate brokers to understand data and market trends. For instance, brokers leverage analytical skills when looking at prices, supply, and demand to predict future market trends.
Leadership: Brokers may lead a team of agents or other real estate professionals. Profitable brokers motivate others to work toward company goals, offering assistance and development to strengthen agents' skills.
Key Hard Skills for a Real Estate Broker
Prospecting: For real estate brokers, prospecting is the process of finding and qualifying potential customers. It requires brokers and agents to identify prospective clients and reach out to them in a friendly, professional manner.
Contract Negotiation: These professionals negotiate between buyers and sellers to set prices and terms before both parties sign transaction contracts. Brokers also ensure both parties understand the terms of the contract.
Business Development: Business development activities include meeting with prospects, showing properties to potential buyers, networking with other real estate professionals, and marketing services.
Sales Management: Sales management for brokers typically involves developing and implementing strategies to increase the number and value of properties sold, as well as coaching and mentoring agents to help them improve their performance.
How to Become a Real Estate Broker
There are multiple paths to becoming a real estate broker, including starting work as a real estate agent under another broker. Many states only require these professionals to hold a high school diploma and complete real estate training courses. However, a bachelor's degree or even an MBA real estate degree can make a candidate more competitive in their local market.
A real estate broker might benefit from an MBA real estate degree to gain a better understanding of business principles and how they apply to the real estate industry. In particular, courses in business management, accounting, leadership, and finance can be useful to business owners like brokers.
An MBA in real estate can also provide brokers with greater networking opportunities and access to well-connected business contacts. As the real estate industry continues to grow, some organizations may prefer candidates with an MBA real estate degree.
Real Estate Broker Salary and Career Outlook
The U.S. Bureau of Labor Statistics (BLS) projects employment in this field will grow 4% from 2020 to 2030. This is slightly slower than the average growth rate for all occupations, though still represents an increase of 47,500 annual job openings in that period of time.
There are several factors that influence a real estate broker's earning potential. These include career specializations, location, industry, experience, and education.
For example, brokers who specialize in commercial real estate may earn more than those who specialize in residential real estate. Similarly, brokers in large metropolitan areas with expensive housing markets, such as New York City or San Francisco, may earn more than those who work in less expensive markets.
Where Can I Work as a Real Estate Broker?
Real estate brokers work in a diverse array of industries. These include investment pools and funds; residential building construction; land subdivision; and management, scientific, and technical consulting. Some real estate brokers are self-employed.
Job opportunities and salaries for real estate brokers vary based on experience and location. For example, brokers in more rural areas may not have as many clients or may make lower commissions on more affordably priced properties.
A Day in the Life of a Real Estate Broker
A typical workday for a real estate broker involves communicating with clients, touring properties, and attending open houses and showings.
A real estate broker lists properties, negotiates contracts, works with buyers and sellers, and networks with other real estate professionals. Using advanced sales and negotiation skills, these licensed specialists help buyers view and inspect homes to prepare and submit purchase agreements. They assist sellers with preparing their homes to list on the market.
Some brokers oversee real estate salespeople, helping them draft, submit, and review purchase offers and contracts. In these instances, a real estate agent serves as a real estate broker's representative.
How Much Does a Real Estate Broker Make
As of 2021, the median annual salary for real estate brokers was $62,010. The top 10% of earners made more than $176,080 per year.
Real Estate Brokers Pay per State
Top-paying states for real estate brokers, according to the BLS, are California, the District of Columbia, Hawaii, Montana, and Nebraska. The average annual wage in these states ranges from $104,030 to $148,820.
The top-employing states for real estate brokers are California, Colorado, Florida, New York, and Texas. Several of these states have large populations, big cities, and more properties, which creates demand for more real estate brokers.
Though some of these top-employing states have larger real estate markets, they also typically have higher-than-average costs of living. For example, brokers in California may earn more than brokers in less-populous states, though the cost of living in California is one of the highest in the U.S., so these higher salaries may have lower purchasing power.
Resources for Real Estate Brokers
ARES is a professional organization dedicated to improving the practice of real estate through research and education. Members of this organization include scholars and practitioners interested in real estate and related fields, such as economics, finance, planning, and law.
NABPOP is a membership organization for real estate brokers and agents who provide broker price opinions (BPOs). NABPOP promotes the use of BPOs by setting standards for these opinions. The organization also provides education and training to its members.
The largest real estate trade organization in the U.S., NAR offers a variety of membership benefits, including training, research, and advocacy. The term "realtor" is a trademark of NAR, only authorized for NAR-affiliated real estate agents and brokers.
The National REIA is an organization whose members are involved in all aspects of real estate investing, both residential and commercial properties. The professional organization provides education, networking, and resources to ensure real estate investing success. Membership categories include investors, association leaders, and industry partners.
Frequently Asked Questions About Real Estate Brokers
How do I become a broker?
Steps to becoming a broker vary by state. Typically, requirements include passing a state-administered exam before gaining experience working as a licensed real estate salesperson. Associated costs include educational courses, state-administered exams, and broker's license application fees.
Is real estate a good career in 2022?
The real estate industry is subject to many factors, including the overall health of the economy, interest rates, and consumer confidence. However, the BLS reports brokers and sales agents made a median annual wage of $62,010 in 2021, projecting 47,500 annual job openings from 2020 to 2030. This data indicates higher-than-average salaries and continued growth of the field.
What are the benefits of being a broker?
There are many potential benefits to being a real estate broker. These include being your own boss, higher-than-average salaries, and significant career flexibility. Professionals who enjoy networking and interacting with clients may find satisfaction in this field.
Why is a career in real estate important?
According to the National Association of Home Builders, housing construction typically accounts for 15%-18% of the gross domestic product, making property a significant portion of the national economy. Real estate professionals, including brokers, are an important part of ensuring the operations of this sector run smoothly.
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