Once you decide a career in the field of real estate is your passion, you’re presented with several options. Will you work in real estate finance by buying and investing, procuring loans for interested buyers? Do you want to be involved with the transactional side of a purchase and sale? Or, like many, does helping clients buy and sell properties that really spark your interest?
If you’ve decided you want to become a real estate agent, you may be considering how to advance your career. Becoming a real estate broker could be the next logical step. Let’s take a look at what brokers do, how you can become one, and what other tools you’ll need to maximize your success in the real estate business.
More Than an Agent: The Difference Between Being a Real Estate Agent and a Real Estate Broker
When you pass your real estate exam, you can explore a whole new world of topics in the world of real estate. A real estate license can give you more than just the ability to help clients buy and sell properties, although undoubtedly, you’re likely going to use it for that reason.
The difference between a real estate agent and a real estate broker can seem a little baffling.
Both professions:
- Create listings for properties
- Can help a buyer or a seller with a transaction
- Advocate for their clients in a real estate transaction
- Establish rental agreements for retinal properties
- Are paid based on a contractual agreement they have with their clients (this is based on negotiations on commissions which can widely vary from transaction to transaction).
The big difference is that a broker can work independently of a real estate brokerage, and a real estate agent cannot.
Real Estate Agents
Just like we mentioned above, real estate agents can help in all areas of property purchase, sale, and renting. The requirements for becoming a real estate agent usually include a certain amount of hours of pre-licensing coursework, which is state-specific. Generally, you can expect to earn between 60-120 hours of pre-licensing coursework.
Agents then must pass their state licensure exam. While each exam is different for every state, many states participate in Mutual Recognition Agreements. These reciprocity agreements allow you to work as a real estate agent in any state with which your state has a reciprocity agreement.
You could also need to go through the fingerprinting process and go through a background check. A felony or other conviction may or may not result in the denial of your real estate agent license.
Agents must work for a real estate broker licensed in their state. This means they cannot proffer real estate transactions on their own. Agents who are affiliated with realty companies are often working for that company because the company maintains a brokerage license.
REALTORS
Real estate agents have an opportunity to build their reputation and offer more to their clients by becoming REALTORS. REALTORS are members of the National Association of Realtors, which holds real estate agents to a high standard of ethics. Being a REALTOR helps add value to an agent’s title and creates a higher level of trust with their client.
Additionally, a REALTOR has access to additional resources that non-REALTORS do not. Transaction services and up-to-date market data are just two examples of how the National Association of Realtors helps their REALTORS become successful.
Brokers
A broker is a real estate agent who has, through additional coursework and examination, been granted the ability to work independently. In other words, a broker doesn’t have to work for a brokerage to help a client buy, sell, or rent real estate.
To start, you will need a high school diploma or the equivalent. A bachelor’s degree is often not required but will most likely prove useful.
Broker educational requirements differ from state to state. You’ll be required to obtain pre-licensing coursework and pass another state-managed exam. Your coursework will give you more in-depth insight into real estate law, tax liability, investing, and property management.
Becoming a Broker in Five Easy Steps
If you want to become a broker, there’s a right way to do it. Each state has requirements for how many years you need to work as a real estate agent before you can attempt to become a broker.
Here’s how to become a broker in five easy steps:
1. Become a Real Estate Agent
Becoming a real estate agent is the first step towards becoming a broker. As we mentioned above, you’ll need to complete pre-licensing coursework, then register for and pass your state’s real estate agent licensing exam.
2. Gain Experience
As a new real estate agent, your first priority is usually making sure you can pay your own rent. It can take time to build a client base, learn how to keep your income consistent and avoid real estate agent pitfalls that can harm your career or cause a deal to go south.
These are all growing pains and a necessary part of the process. If your goal is to become a broker, doing so while you’re still learning the business might not be the best idea, even if your state allows you to apply for your broker’s license after a year on the job as an agent.
Continuing education on everything from open houses to the real estate appraisal process to perfecting marketing materials like advertising is best learned on the job.
3. Earn Your Pre-Licensing Hours
Find out from your state what the broker’s pre-licensing hours requirements are. A good place to start is your local association of realtors, which could be your county or township. If you don’t find answers there, your state association of realtors will also be able to help.
4. Take the Exam
Once you’re confident in your exam prep in your pre-license education, take your state licensing exam. You’ll need to pay a fee for this, and in some states, sponsorship from a previously licensed broker may be required. Once you’ve passed the real estate agent exam, your state may require proof of post-licensing hours prior to being able to work independently as a broker.
5. Get To Work!
It’s time to schedule printing those business cards. Once you’re licensed, you can start working as a broker. It can be intimidating, especially if you aren’t an incredibly experienced agent. Working with a supportive community of like-minded individuals can help you foster your career, learn new ideas, and gain insight into issues related to your job as a broker.
Is Being a Broker The Best Option?
Maybe, maybe not. Your individual goals play a huge role in whether or not becoming a broker is the best decision for you and your career. While being a broker is exciting, it’s also a huge responsibility.
Working for a brokerage may be a better fit for you. You’ll still be able to work semi-independently, but you won’t have to bear as much responsibility as the principal broker.
Here are three benefits of working for a brokerage that you may not have considered.
1. Expert Advice
Working for a brokerage allows you to tap into the minds of experienced agents and brokers who know the ropes. This is a great way for you to learn. Brokerages offer a safe space for agents to ask questions, learn tactics, and find encouragement.
2. Accountability
Being driven is an excellent quality that will help you succeed as a real estate agent. Working for a brokerage provides you with an added layer of accountability. Your brokerage may encourage their sales agents to hit a certain percentage of sales or attain a certain number of new clients on a monthly basis. When you have these goals set before you, it creates drive and helps keep you focused.
3. Steady Income
Initially, working for a brokerage may be a more consistent way of earning an income. Once you’ve built a client base, learned how to attain leads, and have become trusted by your community, working independently may be a more viable option for maximizing your portions of the profit.
Consider Your Options
As a real estate agent, you’ve got options. Whether or not you ever decide to become a broker is up to you, but you can increase your success and give yourself a raise virtually anytime you like, with or without a broker’s license.
Harris Real Estate University offers a diversified coaching program that teaches you how to be successful as a real estate agent, generate new leads, and maintain financial security in an ever-changing market environment.
Whether you are a real estate agent and/or broker, our coaches are obsessed with ensuring your success. Our founders, Tim and Julie Harris, have decades of combined experience selling actual properties to real people, which sets them apart from other coaching programs.
With our premium level coaching, you’ll receive:
- Daily coaching calls with Julie Harris
- Access to a private Facebook community of like-minded individuals
- A library filled with hundreds of previous coaching sessions at your disposal
- Lead generation system
- Easy to follow prospect scripts
- Mindset techniques
It’s easy to sign up for premium coaching and a great way to bolster your career whether you’re an agent, an agent who’d like to become a broker, or already a broker.
Maximize Your Potential
You’ve got your license, now get all the tools you can to fill your toolbox to become successful. Harris Real Estate University is the professional education system you need to help you get the most return on the investment in your broker’s license.
Sources:
Real Estate Tax Center | Internal Revenue Service
How to Become a Real Estate Broker|How To Become.com
