When I was a few years into my real estate career, I hit a crossroads. I was doing well as an agent, closing deals regularly, and building my network. But I started wondering—should I take the next step and become a broker? Would running my own brokerage give me more income, control, and freedom? Or would it just bring more headaches and responsibilities?
If you’re asking yourself the same questions, you’re not alone. A lot of agents reach a point where they wonder if getting a broker’s license is worth it. Maybe you’re tired of splitting commissions with your current broker. Maybe you want to recruit and train agents under your own brand. Or maybe you just want to know if the extra work and investment will actually pay off.
Here’s the truth—becoming a broker isn’t for everyone. It comes with more earning potential, but also more responsibility. Before you make the leap, you need to understand the real differences between being an agent and a broker, not just in terms of money, but in day-to-day work, legal liability, and long-term career growth.
In this guide, I’ll break down the key differences between real estate brokers and agents, share insights from my own experience, and help you decide which path makes the most sense for your career. By the end, you’ll have a clear understanding of what it takes to succeed as a broker—and whether it’s the right move for you.
Real Estate Agent vs Broker: What’s the Difference?
Before you can decide which path is right for you, you need to be clear on what actually separates a real estate agent from a real estate broker. When I was first considering getting my broker’s license, I assumed the main difference was just that brokers made more money. But the reality is, the roles, responsibilities, and even the risks are very different.
Real Estate Agent: Focused on Transactions
As an agent, your job is simple—help buyers and sellers close deals. You work under a licensed broker, and while you have independence in how you market yourself and manage your clients, you ultimately don’t own the business.
Key Responsibilities:
- Represent buyers and sellers in real estate transactions
- Market properties and generate leads
- Negotiate contracts
- Follow brokerage policies and commission structures
- Rely on the broker for transaction management and compliance
The upside? Lower risk and fewer operational headaches. You can focus purely on selling homes without worrying about legal liability, managing other agents, or running a brokerage. But that also means you’re always giving a cut of your commission to your broker—sometimes a small percentage, sometimes a lot.
Real Estate Broker: Business Owner and Leader
Brokers have more control but also take on greater responsibility. There are two main types of brokers:
- Associate Brokers – Have a broker’s license but still work under a managing broker. This gives more flexibility but without the full operational burden.
- Managing or Principal Brokers – Fully independent and can run their own brokerage, hire agents, and set commission splits.
Key Responsibilities:
- Oversee and manage real estate transactions for the brokerage
- Recruit, train, and supervise agents
- Ensure compliance with legal and industry regulations
- Manage brokerage operations, finances, and marketing
- Take on liability for all transactions under the brokerage
When I became a broker, I quickly realized that I wasn’t just selling real estate anymore—I was running a business. I had to think about everything from commission structures to office costs to agent training. Instead of just focusing on my own deals, I was responsible for making sure my agents were closing deals too.
Key Differences Between Agents and Brokers at a Glance
Here’s a side-by-side breakdown of how agents and brokers compare:
Role | Responsibilities | Income Potential | Risk & Responsibility |
Real Estate Agent | Focuses on transactions, works under a broker | Commission-based, splits with broker | Lower risk, no liability for brokerage |
Real Estate Broker | Manages transactions, supervises agents, runs a brokerage | Higher earning potential, keeps more commission, earns from agents | High responsibility, legal and financial risks |
Many agents assume that brokers automatically make more money, but that’s not always true. If you’re a high-producing agent with a great commission split, you might make just as much (or more) than a small brokerage owner without the extra stress.
Should You Become a Real Estate Broker? Pros and Cons
Becoming a broker seems like the natural next step for many agents, but it’s not always the right move. Some agents thrive under a brokerage without ever needing to run one, while others feel limited in their earning potential and want full control over their business. I’ve seen agents transition to brokers successfully, and I’ve also seen some regret it.
To help you decide, let’s break down the real pros and cons of becoming a broker based on my own experience and what I’ve seen in the industry.
The Pros of Becoming a Real Estate Broker
- Higher Earning Potential
One of the biggest reasons agents pursue a broker’s license is to keep more of their commission. As an agent, you’re always giving a percentage of every deal to your brokerage—whether that’s 10 percent, 20 percent, or more. When you become a broker, that cut disappears, meaning more money stays in your pocket.
The financial benefits go beyond just keeping your own commissions. When you recruit agents, you earn a portion of their commissions as well. Some brokers also charge desk fees or transaction fees, creating multiple revenue streams. A top-producing agent can make a great income, but a successful broker can build a business that generates income even when they’re not selling.
- Control Over Your Business
If you’ve ever been frustrated by brokerage policies, commission splits, or the way your office is run, becoming a broker gives you the opportunity to do things your way. You decide:
- What commission structure makes the most sense
- Whether to charge desk fees or provide leads
- How to brand and market your brokerage
- What training and resources to offer agents
I remember working under a brokerage early in my career where the policies just didn’t align with how I wanted to run my business. When I became a broker, I was finally able to build a culture and business model that fit my vision.
- Multiple Revenue Streams
As an agent, your income is 100 percent commission-based—if you’re not closing deals, you’re not getting paid. As a broker, you can diversify your income beyond just selling homes. Some common revenue streams include:
- Earning a portion of your agents’ commissions
- Charging desk fees or transaction fees
- Offering training programs or mentorship for new agents
- Expanding into property management or commercial real estate
Some of the most successful brokers I know barely sell homes themselves anymore. They’ve built strong teams and brokerages that generate steady income, whether they’re working with clients or not.
- Long-Term Wealth Building
Unlike an agent’s book of business, a brokerage can be a scalable asset that grows in value over time. A well-run brokerage with a strong brand, top-producing agents, and consistent revenue can be sold for a profit down the road. I’ve seen brokers sell their businesses for seven figures, turning years of hard work into a long-term financial reward.
The Cons of Becoming a Real Estate Broker
- More Responsibility and Liability
With more control comes more responsibility. As a broker, you are legally and financially responsible for every transaction under your brokerage. If one of your agents makes a mistake—whether it’s a contract error, a misrepresentation, or even an ethics violation—you are the one who has to deal with the consequences.
This means:
- You need a strong compliance system in place to reduce risk.
- You’ll likely pay higher E&O (Errors & Omissions) insurance premiums.
- You have to be on top of legal and regulatory changes to protect your brokerage.
I’ve known brokers who got into legal trouble because of mistakes their agents made. Even if you run an ethical, well-organized brokerage, one bad agent can create massive headaches.
- Recruiting and Managing Agents is Harder Than It Looks
Some agents assume that once they open a brokerage, agents will naturally want to join. But real estate recruiting and retention is one of the toughest parts of being a broker. You have to convince agents why your brokerage is better than the dozens of other options out there.
I’ve seen brokers struggle because they expected agents to be self-sufficient, only to realize that many need ongoing coaching, accountability, and motivation. If you don’t enjoy managing people, hiring agents, and helping them succeed, you might find running a brokerage frustrating.
Agent Type | Pros | Cons |
New Agents | Eager to learn, easy to mold into your culture | Require extensive training and mentorship |
Experienced Agents | Bring an existing client base, close deals faster | May demand higher splits, resistant to new systems |
Top Producers | Generate significant revenue and credibility | Expensive to recruit and retain, may need strong incentives |
I found that a mix of new and experienced agents worked best for my brokerage. The newer agents benefited from mentorship, while experienced agents provided steady production. But I also learned that if you’re not careful with recruiting, you can end up with agents who take up time and resources without producing results.
- Higher Operating Costs
Unlike an agent, who has minimal business expenses beyond marketing and MLS fees, a broker has real operating costs that add up quickly. These include:
- Office space and utilities (unless you’re running a virtual brokerage)
- E&O insurance and liability coverage
- Marketing and branding expenses
- Software and CRM systems to manage transactions
- Training programs and support for agents
Even if you run a virtual brokerage, you still have to invest in technology, branding, and agent support to stay competitive. And if your agents aren’t producing enough, you’re the one covering the bills.
- No Guaranteed Paycheck
As an agent, your income depends on your own production. As a broker, your income depends on your agents’ production. If they’re not closing deals, your brokerage isn’t making money.
I’ve seen agents leave high-paying personal sales careers to open brokerages, only to realize they actually made more money as an agent without the added stress. A friend of mine ran a small brokerage for a few years but ended up going back to being an agent because he preferred the simplicity of focusing on his own deals.
Broker vs. Agent: Which One is Right for You?
- If you love sales and want to maximize your personal production, staying an agent might be the better choice.
- If you enjoy leadership, want to build a real estate team, and are willing to take on extra responsibility, becoming a broker could be your best move.
