Real Estate Agent vs Broker: License Requirements, Salary & Career Path
Real estate agent and real estate broker are two distinct license levels with different requirements, responsibilities, and earning potential. Understanding the differences helps you plan your career path in real estate.
Key Differences at a Glance
| Factor | Agent (Salesperson) | Broker |
|---|---|---|
| Education | 40 – 180 hours | 60 – 300+ hours (additional) |
| Experience required | None | 2 – 3 years as licensed agent |
| Work independently | No (must work under a broker) | Yes |
| Own a brokerage | No | Yes |
| Supervise agents | No | Yes |
| Average salary | $52,030/year | $68,000 – $100,000+/year |
| License cost | $400 – $1,200 | $800 – $3,000 (additional) |
| Timeline from zero | 1 – 3 months | 3 – 5 years total |
Real Estate Agent License
A real estate agent (also called salesperson in many states) is the entry-level license. Key points:
- Must work under a licensed broker — cannot operate independently
- Pre-licensing education varies from 40 hours (Michigan) to 180 hours (Texas)
- Pass state exam (national + state portions)
- No prior experience needed
- Earn commissions split with your broker (typically 50/50 to 70/30)
For full details, see our real estate agent guide or read our how to become a real estate agent article.
Real Estate Broker License
A broker license is the advanced credential that unlocks full independence:
Requirements
- Active agent license for 2 to 3 years (most states)
- Additional education: 60 to 300+ hours of broker-specific coursework
- Broker exam: More comprehensive than the agent exam
- Some states also require: Transaction experience minimums
What Brokers Can Do
- Open and operate their own brokerage firm
- Supervise licensed agents
- Collect full commissions (no split with another broker)
- Hold escrow funds
- Sign listing agreements directly
Types of Brokers
- Designated/Managing Broker: Runs the brokerage, supervises agents (required for every firm)
- Associate Broker: Has a broker license but chooses to work under another broker
- Principal Broker: Owns the brokerage firm
Education Comparison
| State | Agent Hours | Broker Hours (additional) | Total for Broker |
|---|---|---|---|
| Texas | 180 | 630 | 810 |
| California | 135 | 225 | 360 |
| Florida | 63 | 72 | 135 |
| New York | 75 | 120 | 195 |
| Michigan | 40 | 90 | 130 |
Compare all states: Agent requirements | Broker requirements
Cost Comparison
Agent Total Cost
| Item | Range |
|---|---|
| Pre-licensing education | $200 – $700 |
| Exam fee | $30 – $100 |
| Application fee | $50 – $250 |
| Background check | $30 – $80 |
| Total | $310 – $1,130 |
Broker Additional Cost
| Item | Range |
|---|---|
| Broker education | $300 – $1,500 |
| Broker exam fee | $50 – $150 |
| Broker application fee | $100 – $400 |
| Additional total | $450 – $2,050 |
The broker investment pays for itself quickly — even a small brokerage with 5 agents generates management fees and full commission retention.
Salary and Earning Potential
The real difference between agents and brokers shows in long-term earnings:
Real estate agents:
- Median salary: $52,030/year
- Top 10%: $112,610+/year
- Income is 100% commission-based (no base salary)
- Must split commissions with their broker
Real estate brokers:
- Managing broker salary: $68,000 – $100,000/year
- Brokerage owners: $100,000 – $300,000+/year
- Keep full commission on personal transactions
- Earn override on agents’ transactions (typically 10% to 30%)
Key insight: A broker with 10 agents, each closing $100,000 in commission per year, earns $100,000 to $300,000 in overrides alone — on top of their own transaction income.
When to Get Your Broker License
Consider getting your broker license when:
- You’ve built a strong client base as an agent (2 to 3+ years)
- You want to eliminate commission splits
- You’re interested in mentoring or managing other agents
- You want to open your own brokerage
- You want the “associate broker” credential for credibility
Many successful agents never become brokers — they earn enough through agent commissions. The broker path makes most sense for entrepreneurially minded agents.
State Quirks
A few states use these terms differently:
- Oregon and Washington: Use “broker” to mean what other states call “salesperson/agent.” Their advanced license is “principal broker.”
- Colorado: All licensees are “brokers” — there’s no salesperson license. Entry-level is “associate broker.”
Check your state’s specific terminology at LicenseCompass.
Frequently Asked Questions
Can I skip the agent license and go straight to broker? Generally no. Most states require 2 to 3 years of active experience as a licensed agent before you can apply for a broker license. A few states allow substituting a real estate degree for some experience.
Is a broker license worth it? If you plan to run your own business or want to keep 100% of your commissions, yes. The additional education and exam are a modest investment ($450 to $2,050) compared to the lifetime earnings increase.
How long does it take to get a broker license? After meeting the experience requirement (2 to 3 years as an agent), the broker education and exam take an additional 2 to 6 months.
Can a broker work as an agent? Yes. Many people earn a broker license but continue working under another broker as an “associate broker.” This gives them the credential without the responsibility of running a firm.
What’s the difference between a Realtor and a broker? “Realtor” is a trademarked term for members of the National Association of Realtors (NAR). Both agents and brokers can be Realtors. The broker license is a state credential; Realtor is a professional association membership.
Data sourced from CareerOneStop (U.S. Department of Labor). Compare requirements across all states at LicenseCompass.