Real estate is a very popular industry for many types of people. If you’re looking for a new career, becoming a real estate broker might be right for you. You might be wondering what a real estate broker is and how it’s different from a real estate agent.
Differences Between a Real Estate Broker and an Agent
The key difference between a real estate broker and a real estate agent is the level of education. If you become a real estate broker, you will take courses past the agent level and have to pass the broker’s license exam.
The necessary education and exams are different in each state. However, to become a real estate broker, you will likely take courses covering ethics, taxes, insurance, and contracts. These courses will go deeper than the real estate agent pre-licensing courses.
Brokers also take courses in real estate law, operating a brokerage, property management, construction, and real estate investing. You cannot even attempt to take the real estate broker’s exam without the right level of experience as a real estate agent. Becoming a real estate agent is step one. Gaining experience is step two. The final step is taking the necessary broker classes and passing the real estate broker exam.
Three Types of Real Estate Brokers
1. Designated or Principal Broker
The most common type of real estate broker is the designated or principal broker. Every real estate office has this type of broker. This person will ensure agents at the firm are operating within the real estate laws of the state. They are in charge of all licensed agents and review all real estate contracts.
A designated or principal broker will also help to resolve transaction disputes with other brokerages. They can help agents if they are struggling with another agent, as well.
Principal brokers will get paid a commission. They get a cut of the commission of the real estate agents they supervise. Their earnings can change from one month to another.
2. Managing Broker
This person will oversee the day-to-day operation of the office. They will take a more hands-on approach when it comes to the administrative staff, hiring new agents, and training agents. It’s possible for a principal broker to also serve as the managing broker for a real estate firm.
3. Associate Broker
Someone working as a real estate professional but working under a managing broker may be called an associate broker. They may also be called a broker-salesperson or an affiliate broker. This type of broker has a broker’s license, but they will likely not be responsible for other real estate agents.
You might also come across the term broker-owner. Real estate brokers that own their real estate agency are often called broker-owners. They may take on clients and facilitate transactions while also overseeing the entire agency.
The Duties of a Real Estate Broker
Many real estate brokers take on their own clients. They will also perform duties for the agents they supervise, including:
- Marketing homes for sale
- Writing offers and negotiating prices
- Showing homes to buyers
- Facilitating transactions
- Negotiating contracts for agents
- Establishing escrow accounts
- Mediating conflicts
- Overseeing office staff
- Maintain office compliance
- Recruiting, hiring, and training new real estate agents
The duties may vary depending on the type of broker and the size of the real estate office.
How to Become a Real Estate Broker
The first step you must complete to become a real estate broker is becoming a real estate agent. All real estate professionals are brokers in a few states, but most states require you to become an agent first.
Once you’ve become a real estate agent, you’ll need to gain experience. Usually, you need three years of experience as an agent before you can become a broker.
Becoming an agent will require you to take the state-approved pre-licensing course from a company like AceableAgent or Real Estate Express. You will also need to pass the licensing exam. This exam can be difficult, but the right real estate exam prep course can help prepare you.
It can be helpful to earn real estate certifications as an agent. You can specialize in specific areas of real estate to build your reputation. For example, you can focus on buyers, sellers, military relocation, luxury homes, or even first-time home buyers. Many certification classes will require you to pass an exam.
After you’ve worked as an agent for a few years, you can take the state-approved real estate broker course. This course will provide the necessary information you need to run a brokerage. You will need to pass the real estate broker exam to get your broker’s license.
Once you’ve passed the exam, you won’t need to work under another broker anymore. Every state is a bit different. The exam may take a complete day to finish.
Top 4 Benefits of Becoming a Real Estate Broker
1. Higher Income
Most brokers make more than they do as agents. You will be more experienced and be able to help agents under your leadership better. If you have a team of high-performing agents, you can make a very high yearly income.
2. Flexible Work Schedule
If you get your real estate broker’s license and open your own agency, you set your own hours. As a broker, you will work as your own boss and decide what hours you prefer to work.
3. Run a Property Management Company
Brokers, in most states, have the ability to run a property management company. You will gain training in property management and open up new career opportunities.
4. Run your Own Brokerage
As an agent, you have to work for a supervising broker. When you become a broker, you can work for yourself by opening your own brokerage office.
There are many benefits associated with going from a real estate agent to a real estate broker. You can earn more money, manage other agents, and advance your career. Getting your broker’s license helps to open opportunities not available to you as an agent.
Frequently Asked Questions about Real Estate Brokers
How does a real estate broker get paid?
Brokers will take a portion of the commission earned by the agents working under their supervision. They can also earn the commission from their own transactions without any type of commission split.
How much does a real estate broker make per year?
According to ZipRecruiter.com, a real estate broker makes just over $100K per year, on average. The pay scale is rather wide, however. It ranges from $14,500 to $245,500 per year.
Salary.com puts the range between $53K and $76K for real estate brokers, while Indeed.com has the average salary for a broker at about $78K per year. Since a broker gets paid on commissions, the average pay per year can vary quite a bit. It’s dependent upon the location and the real estate office you are in.
What type of education do I need to become a real estate broker?
Real estate brokers don’t need a college degree. A high school diploma is enough to become a real estate agent and then a broker. All you must do is complete the right real estate training programs.
What type of hours does a real estate broker work?
The hours for a real estate broker will vary and can be rather irregular. Some brokers will spend quite a bit of time outside the office meeting with clients. You may also need to travel to view properties.
It’s common for brokers to work weekends and evenings. Most clients are not available during the day, so a broker needs to be available when their clients can meet.
Where are the real estate courses offered?
Both real estate broker and agent courses are offered online. They can also be taken in a classroom in most states. Taking the courses online can allow you to work at your own pace. It can also provide a way to work on the courses on your schedule.
How long will it take to become a real estate broker?
The actual amount of time it takes you to become a real estate broker depends on your state. Most states require one to three years of experience working as an agent before you can apply to become a broker. Once you’ve met this requirement, it will take weeks or months to complete your broker training and pass the exam.
Do I need to renew my real estate broker’s license?
Yes, every few years, you will need to renew your license. Each state is different. However, you will likely need to complete continuing education courses and pay the renewal fee every two years.
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