How to become a real estate broker: Are you a real estate agent? And want to set up your own real estate agency? I’m sure you will be asking “how can I get my real estate broker license” Well, getting your real estate broker license is similar to that of your real estate agent license.
There are so many types of real estate professionals out there that even real estate agents are sometimes confused. Some real estate agents add titles and certifications after their names to stand out from the crowd. These can be associates, real estate consultants, salespeople, independent brokers or realtors, but all of them are licensed to sell real estate properties.
There is a nuance, however. Real estate broker can work as agents but agents cannot work as brokers (at least not without a broker license).
Therefore, in this article we will be discussing the step by step process to apply and get your real estate broker license but before we start, what is a real estate broker?
What Is a Real Estate Broker?
A real estate broker is a professional who is licensed to own and operate a brokerage firm, hire and manage real estate agents, and represent buyers and sellers in real estate transactions. Brokers earn an average salary of $ 70,400 and must meet requirements for training and experience beyond those of agents and pass the broker license exam.
To be a real estate broker means you are a step above a real estate agent. A broker typically has more training and education in this area than an agent, though, the exact rules may vary from state to state, but most have similar requirements.
In California, for example, a broker license is required to work independently. Agents must work for brokers, but a broker can run his own business.
Types of Real Estate Brokers
There are many types of real estate agents which includes: Associate, Managing, and designated brokers. Each type of broker must meet different licensing requirements and can assume different roles and responsibilities in real estate transactions.
By law, every real estate agent – and every real estate agency – must be monitored and managed by a real estate broker. This broker, referred to as the Designated Broker, has legal responsibility for all transactions that real estate agents conduct. While these designated brokers are required to sign real estate transactions, they do not need to manage the day-to-day business of groups of agents or other brokers.
Managing brokers can manage a group of real estate agents or associate brokers within a real estate agency. These brokers play a very active role in the day-to-day management of the brokerage firm. While some Designated Brokers also act as managing Broker, others leave management to a separate Broker Manager.
An Associate broker is a real estate agent who has completed the basic training and work experience required to transition from an agent license to a broker license. You also passed the Real Estate broker license Exam. Although the law allows them to work independently or to own their own agency, they have chosen to work under the license of another real estate broker.
Salary of a Real Estate Broker
Real estate agent salaries vary widely depending on whether or not you operate your own agency, the size of the agency you work for / own, and the location of your agency.
Common salary in the U.S.:$90,468 per year
Some salaries range from $15,000 to $233,000 per year
What does a real estate broker do?
The duties of a real estate broker depend on the type of broker you are. If you choose to be an associate broker in an existing brokerage firm, your duties are similar to those of agent with bigger responsibilies.
These are some duties of associate brokers:
Market homes for sale
Negotiate to price
Hold open houses
Prospect buyer and seller leads
Represent buyers and sellers in transactions
Rent residential and commercial units; you may have to become a commercial real estate broker depending on your state.
Designated brokers and managing brokers typically focus on the high-level management and supervisory functions. However, it doesn’t stop you from working directly with prospects or from continuing to do business directly.
Here are some of their roles:
Contract Review: This ensures that transactions are structured in the best interests of the customer or company
Lead Distribution: A good broker ensures that incoming leads are fairly distributed among team members.
Setting up Escrow Accounts: A broker is responsible for setting up an account where the funds involved in a real estate transaction can be kept until a transaction is complete.
Liaison with government and professional associations: States heavily regulate the real estate sector; hence, it is the broker’s duty to understand changes in the law and implement those changes within their brokerage.
Managing Agents: A managing broker is responsible for ensuring that the company complies with applicable labour laws and that agents and support staff behave both legally and ethically when they are within the company but also when they are with prospects.
Managing Compliance Issues and Records: Real estate transactions require a tremendous amount of paperwork in handling sensitive financial information and also require the accounting records required by the state.
Marketing Brokerage: Brokers are responsible for creating a company’s brand and increasing marketing awareness.
Recruiting Agents: A broker who does not sell directly relies on brokers to conduct real estate transactions and generate income for the company. Hence, it is the responsibility of the broker manager to ensure that the broker regularly attracts the best talent.
Conflict Resolution: Real estate is a high stakes industry and ghosts can sometimes ignite. The broker manager is responsible for defusing situations before they negatively impact the broker team’s brand or culture.
Train Agents: Agents whose income is based on commission rather than a fixed salary leave a company if they don’t believe they are getting high-quality leads or the tools they need to be successful. Thus, regular training on tips, software and other best practices is a must.
Property Management: In addition to conducting property transactions, some brokerage firms may also offer services to help maintain the value of a property after an owner has moved. These services can include things like organizing landscaping, solving heating and air conditioning problems, and coordinating light repairs.
The duties and obligations of brokers vary significantly depending on the requirements of the state and the broker. Make sure you understand the duties that are expected of you in a brokerage role before you begin.
Real estate broker requirements
Being a real estate broker usually don’t need a college degree. However, you will need to complete real estate training and obtain their certification, which may vary by location.
Real estate agents typically have to graduate from high school before starting their careers. Many states require the completion of real estate courses. Acquiring a bachelor’s degree is not mandatory, but it can increase a candidate’s competitiveness. As the real estate industry continues to grow, employers tend to prefer applicants with a degree.
In addition, many brokers receive a license to operate their own real estate agency. Business management, accounting, and finance courses can be helpful as a business owner.
Real estate agents often first gain experience as sales representatives. The real estate company can offer training or you can take courses through a licensing authority. Real estate brokers can continue training with licensing courses and related real estate coursework. After gaining experience, a real estate agent is likely to help new sales reps develop the skills necessary to work with real estate clients.
Real estate brokers must first gain experience as a licensed real estate agent. Becoming a real estate broker requires additional training, passing an exam, and a minimum number of hours of real estate experience that varies from state to state. Some states may also require a background check. Because every state has different requirements, you will need to apply for a new license if you cross borders or plan to sell real estate in another state.
Real estate brokers regularly use their skills in communication, sales and leadership. The broker is often the most important resource to a buyer or seller, so extensive knowledge of the real estate market is also essential. Important skills as a real estate broker include:
Communication: Real estate brokers need strong communication skills to build professional relationships with buyers and sellers. They will speak to buyers to better understand what they are looking for in a new home and they will speak to sellers to understand and address their concerns about the selling process. Brokers will also communicate and negotiate with other agents as well as their own team of sales agents.
Sales: Brokers need to develop their sales skills in order to market their offers to interested buyers. A successful broker needs to have an up-to-date understanding of the market in order to accurately manage price and sales expectations.
Leadership: Brokers are responsible for training and running their own team of sales reps. Leadership and mentoring skills can help the broker motivate individual agents to achieve their sales goals.
Analytical: Basic analytical skills are useful for a real estate agent in creating offers to buy and negotiating contract terms.
Organizational: Real estate agents have to manage several clients at the same time. Strong organizational skills can help a broker organize paperwork, customer information, and required tasks.
Business: Many brokers open their own real estate agency. Business knowledge of finance, accounting, and corporate governance can also be helpful in running a real estate agency business.
Ultimate Steps on How to become a real estate broker
The real estate broker has extensive training and experience in the real estate market. You can become a real estate agent by following these steps:
Enrol in a real estate training course: To begin your career in the real estate industry, you must first register for an accredited real estate training. Specific course requirements vary by state. Most have minimum hourly requirements and cover all of the basic laws and expectations of a salespersons. This course is also intended to prepare you for the state examination.
Taking the Real Estate Exam: After completing the required training, sign up for your state’s real estate exam. You must pass the exam to qualify for a license.
Select a broker to work under: In most states, a new seller must also work under an already registered broker. Talk to potential brokers and choose the one that best suits your needs. Refine your options, taking into account commission breaks, training opportunities, and career advancement opportunities.
Earning Real Estate Experience: Keep working and gain real estate experience by meeting and helping clients. Ask other agents and your broker to join them on the open house and with buyers.
Enrol in a broker course: When you have completed the minimum sales hours in your state, enrol in a real estate agent course. When you have completed the brokerage course requirements, register and take the brokerage exam. You must pass the exam to apply for your broker’s license.
Apply for a broker license: After completing the required hours and passing the exam, you can apply for your broker license. When you receive your license, you are entitled to start your own brokerage firm or join another as a real estate agent.
Real estate broker work environment
People who prefer a diverse work environment will likely appreciate the flexibility that a real estate agent brings. Real estate brokers are considered self-employed and often work their own hours so that they can work as much or as little as they want.
Much of a typical real estate broker’s working day is spent on site. A realtor needs to meet with buyers and sellers of real estate. You can spend time in the office meeting new clients, training new real estate agents, and closing deals.
Real estate brokers can expect the following career characteristics:
Use of computers, printers, and fax machines
Communication via text message, email, and phone calls
Supporting new realtors in training
Scheduling numerous buyers and sellers to meet their needs
Coordinating closing timelines with buyers and seller
Pros & Cons of Being a Real Estate Broker
There are many pros and cons to getting your real estate broker’s license instead of staying a agent. Not only do brokers earn higher commissions and are more independent than agent, but they can also act as property managers. However, real estate professionals face additional licensing requirements and have greater liability than real estate agents.
Pros of Being a Real Estate Broker
Independence: Brokers can own and manage their own real estate agents instead of having to work under the supervision of another real estate professional
Higher Commissions: As a broker, you can usually order a higher commission than most real estate agents
Property management: As a proven broker or manager, you can operate property management for an additional source of income or as a new career option
Improved networking: Brokers can use their experience and training to convince more clients to work with their teams
Cons of Being a Real Estate Broker
Additional Licensing Requirements: Aspiring real estate agents must have experience as licensed real estate agents, meet additional training requirements, and pass the real estate agent exam
Increased Responsibility and Accountability: Brokers are accountable for the actions of their agents and have additional responsibilities, including overseeing license requirements for their agents, providing training resources, and handling compliance issues
Higher Operating Costs: Because brokers own their own brokerage businesses and can hire and manage agents, their operating costs are higher than those of individual agents
In conclusion, to become a Real estate broker you will be able to represent buyers and sellers in real estate transactions, own and operate a real estate agent, and hire, manage, and oversee brokers. To become a broker, you must acquire a broker license, meet the experience requirements set by your state, take additional courses, and pass the license exam.