If you’ve been a real estate agent for a while, you’ve probably dabbled in the idea of taking the next step toward becoming a real estate broker. If you’re ready to take what you’ve learned as an agent and become a successful broker, here are a few things you need to know.
The Benefits Of Being A Broker
There are many reasons why agents decide to step into brokerage. Some do it because it offers them more flexibility and the ability to set their own schedule. They enjoy the idea of working in real estate but being able to do it on their own time. Others do it because they like the idea of making more money. Real estate brokers get paid a commission every time one of their agents closes a deal, which means brokers with strong teams significantly increase their annual income.
Many brokers like the idea of teaching and training, while others want to become a broker because they feel like it’s the next logical step. For many agents, it is a combination of all of these reasons that leads them to career advancement.
Getting A Broker’s License
Once you have your agent’s license, upgrading to a broker’s license is a relatively easy process. There are specific courses and classes you must take, depending on your state, and then a final exam to take. Some examples of classes an agent will need to take to earn his/her broker’s license are:
- Estate Practice
- Legal Aspects of Real Estate
- Real Estate Finance
- Real Estate Appraisal
- Real Estate Economics
You can also expect to take courses in other areas of real estate, including commercial real estate, contracts, compiling documents, risk management, and property management.
Once you have your broker’s license, you will need to focus on continued education to ensure you always are up to date with the latest real estate laws, policies, and procedures. Continued education is vital in staying on top of changing trends and having the certifications required to practice real estate in your state.
Taking The Exam
The exam to earn your broker’s license is different in every state, but they usually consist of around 100 questions. These questions cover a broad range of topics including real estate terminology, aspects of property ownership and land use, understanding real estate contracts and real estate law. Agents study for months to ensure they pass this test the first time, there’s a lot to learn! (We’ve got a great exam resource that guarantees you’ll pass the exam on the first try!)
Remember that if you get your broker’s license in one state, it doesn’t mean you can conduct real estate business in other states. Check your state’s rules about license portability before you take the exam.
Kentucky, Missouri, Nebraska, New Jersey, Pennsylvania, and Utah won’t allow brokers from other states to do business within their borders, while states like Colorado and Washington are much more flexible. It’s important to know this if you plan to expand your reach and buy/sell real estate in surrounding states.
Listing Brokers Vs. Buyer’s Broker
One of the decisions you’ll need to make as you take the steps towards a career as a broker is what kind of broker you want to be. There are listing brokers and buyer’s brokers, and while they perform many of the same tasks, each comes with its own set of responsibilities.
A listing broker works with the seller. They write contracts and handle the marketing of a listed home. Their job is to connect with other brokers and initiate the connections required to sell the home. Listing brokers receive a commission (usually 5-6%) on any property they sell.
A buyer’s broker is in charge of bringing buyers to an available property. When the home sells to a qualified buyer, the buyer’s broker splits the commission with the listing broker. The buyer’s broker represents the buyer in a real estate transaction.
Take The First Step Towards Becoming A Broker!
If you’re currently a real estate agent and love what you do, it may be time to take the next step in your career. With careful and focused planning, intentional exam prep, and the right teachers, you could be making more money and closing more deals before you know it. The key is finding the right classes and courses that will help you understand the details of running a successful brokerage.