The Real Poop
You own nothing. You're just the lubricant, the WD-40 at war with friction in buying. When you work real estate, your primary responsibility is to sell. And real estate brokers can sell ice to an Eskimo. Well, good ones can. In this cut-throat business, only the good survive. The rest get eaten...by...polar bears. (Or, in a slightly higher number of cases, they just don't work as brokers anymore.)
Real estate brokers are savvy, personable, and professional people who own a lot of suits and drive nice (tax deductible) cars. Real estate brokers differ from agents, or your average Joe and Jane Houseseller. While brokers perform many of the duties of agents (help clients buy, sell, or rent properties), they have a broker's license that allows them to operate their own real estate business.
That means that while they can totally sell houses, they'll typically just have someone else do all the work, while still taking up to half the cash. Real estate businesses help agents with their branding, advertising, and transactions. Likewise, brokers can appraise properties and manage real estate agents.
If you become a broker, you get to manage your own company and make more money, because you have sales agents selling property. Brokers make their money by taking a commission from whatever property was sold, bought, or rented, or by earning a percentage of an agent's commission.
Commissions vary based on the price of the property. Most commissions these days are five to six percent, translating to an average of around $75,000 per year (source). And that number is going down—the Internet has made house shopping dramatically easier than it was in 1990.
Typically, when a seller decides they want to sell their home, they contract a "listing broker." The broker writes a contract or listing agreement that states the agreed-upon set fee (commission rate) for the sale.
In exchange, the broker markets and sells the property (on their own nickel—that is, they buy their own media, etc.). The broker uploads the listing data to the MLS (Multiple Listings Service) and contacts other brokerage companies or "buyer brokers" working with buyers.
Usually, there's a pre-open open house just for realtors. This is where they have really awesome lox and bagels.
A broker's take-home money depends to some extent on whether houses are selling like hot cakes. The process is, however, laden with friction. That is, when the market is hot, people get their real estate license and the field is flooded with agents, which limits how many properties a broker or agent can sell. Additionally, inventory dries up and there simply aren't homes available to meet demand.
Conversely, when the market is cold, there are fewer people to compete with so a broker can sell more houses even if it's more difficult. Realtors like a balanced market in one form or another (tipped oh so gently in their favor, of course).
To be a broker, you need to earn a broker's license (source). Licensing requirements differ from state to state, but typically you need to be at least eighteen, complete a certain number of hours of real estate courses, have one to three years of experience as a real estate agent, and pass an exam.
Then you're totally licensed...for that particular state. Those who move must contact their state's real estate licensing commission to find out if their broker's license is valid in the state they're moving to.
The job outlook for real estate brokers is decent. The field should continue to grow in volume—even if commissions remain low.
If you like working for yourself, love the roller coaster ride of the real estate market, and own a lot of suits, the life of a real estate broker may be perfect for you.