A real estate broker provides assistance to the people in need of buying or selling a property. Being a real estate broker is considered to be a career which provides you a great income, and the timetable is flexible as well. So, a large number of people these days want to break a career into real estate. As a result, you will see every second person asking the question as to
So, a large number of people these days want to break a career into real estate. As a result, you will see every second person asking the question as to how to become a real estate broker, agent or a realtor.
The number of people who actually knows the difference between these terms is exceptionally low. They often end up confusing these terms with each other. So, before starting your journey of becoming a professional in real estate, it is essential that you know the difference.
What Is The Difference Between A Real Estate Agent, Realtor And A Broker?
- Real Estate Agent
A real estate agent is someone who has the license to help people make their property transactions. He is not allowed to work independently and often works for a broker.
A realtor is just a real estate agent with some extra credentials. These credentials allow him the access to MLS which is the biggest database of real estate in the USA.
A real estate broker has more knowledge and law information than both realtors and real estate agents. He also has the license to own a brokerage to hire agents and work for him.
How Long Does It Take To Become A Real Estate Broker?
There is no exact answer as to how long it takes to become a real estate broker. The time period varies from state to state. However, the average time period is between 4-6 months. The variation in the time period is due to limit of hours required to complete the course in different states.
For example, realtors in Marietta GA are required to complete at least 75 hours in order to obtain the license. While in Florida, the hour limit is 63 and in California it’s 45.
Another factor that determines the length of the process is the type of course you choose. Online courses have fewer restrictions and can reduce the time limit to just a month or two.
The last factor that determines the time period of completing pre-license classes is the application/exam process. Different states use different procedures in order to take the exam and receive applications.
Some states such as Georgia have upgraded their systems. So the real estate agents in Marietta GA or any other city of Georgia who apply for a broker’s test receive a temporary license on the site of the test.
However, this facility is only available in some states. Most states still use the old traditional system and the candidates have to wait for weeks, and some time for months for application submission or obtaining the license.
Now that you know how long it takes to become a real estate broker. It’s time you start reading about how to become a real estate broker.
Getting Started As a Real Estate Broker:
To start a career as real estate broker, 2-3 years of experience of working as a real estate salesperson is required. A real estate sales person’s prime task is to help people with sell/buy or rent properties. A real estate salesperson goes through a pre-licensing course which is offered by various schools in each state. The topics that are covered in the pre-licensing course are:
- Real estate finance
- Legal issues
After mastering these topics, a real estate sales person can go and work for a broker. However, after few years of working for a broker, most probably 2-3 years, most agents start to think about owning their own brokerage.
To own a personal brokerage and be known as a real-estate broker, there are a few additional courses necessary to complete. These courses provide the same knowledge as mentioned above, but in an advanced state. Hence, giving more insight as to how real estate brokers work.
After gaining the required experience and completing the course as to how to become a real estate broker, you are now ready to become one.
However, most sales agents do not start their own brokerage right away. They continue working for a brokerage as associate brokers.
Working as an associate broker is almost same as working as an agent. However, it does not involve the responsibilities of owning a personal firm. It ultimately gives them a boost in income and the burden that comes with responsibilities is not so high.
Working with a broker also gives them experience. T as to how to handle the problems that come with having a personal brokerage. Hence providing them essential experience in case they plan to own a brokerage anywhere in the future.
What Are The Requirements For A Real Estate Broker’s License?
Just like real estate agents, brokers are required to get a license from their state as well. There are three basic requirements for real estate broker’s license.
- Real estate sales license
- Prior experience of having worked for a broker (2-3 years at least)
- Pre-license course
There are numerous institutes that provide the training courses. However, not all of them are approved by the state. In order to get the license, you must complete the course that is approved by the state. Otherwise, it will only result in a waste of time and money.
Apart from completing the test, passing a background criminal check is also essential to receive the license.
However, earning the license will only allow you to work in the residential industry. But, what if you want to operate in the commercial category of real estate? Well, to gain access to commercial properties, you will need to have a commercial license.
How To Become A Commercial Real Estate Broker?
Becoming a commercial real estate broker is almost same as the criteria given above, which includes:
- Earning a sales license
- Getting real estate experience
- Getting a broker’s license
- Becoming a commercial real estate broker
Being a commercial real estate broker means additional knowledge and skills. These attributes can be achieved by working with someone who already has the knowledge of the market.
After working for a few years with a commercial broker, you will have enough knowledge and experience to work independently.
Getting Started As a Commercial Real Estate Broker:
Good commercial brokers always keep themselves up to date with all the latest developments in the market. The market is developing in all the areas such as marketing of the property and environmental standards. Keeping track of all these latest developments is the key ingredient to show their commitment towards the business. Higher the commitment, the more chances of success in the industry.
So, remember that it requires a huge amount of patience and self-motivation to succeed as real estate agent.
How Much Do Real Estate Brokers Earn?
It depends on their experience. Usually, a broker with more experience earns than someone new in the industry. The average amount a real estate broker earns annually is around $52k.
According to payscale.com, the average income goes from $25K to $110K. 25k being lowest while 110K being the highest a real estate broker earned in 2016.
Down below is the experience to salary ratio of how much do real estate brokers make.
- A broker who has 1-5 years of experience is considered to be in the initial phase. The average amount he earns during that phase is 30-50K. These numbers are based on the figures taken from 117 brokers who provided their income stats.
- The next phase which goes from 5-10 years is considered to be a mid-level phase. The income of brokers in this phase lies between 50-60K.
- The brokers with over 10 years experience are considered to be the most experienced ones. Their salaries fall between 60-100k and over 80% deals in the real estate industry are closed by them.
However, these figures vary from state to state. Following are the states in which real estate brokers earn the highest.
- $140k in New York
- $125K in Pennsylvania
- $95k in Virginia
- $95k In Washington
- $95k in New Jersey
- $93k in Connecticut
- $89k in Texas
If you are wondering how does a real estate broker earn, it depends on his commission rates. A commission is a fee that an agent charges you for providing his services to complete a property transaction. The more deals an agent closes, the more commission he is supposed to earn. Hence the more earning.
Now you might be wondering “well, this is how the agents earn. But how does a broker make that much income?”
Well, real estate is a complex industry and there are different ways to make money. Usually, when an agent starts working in the industry, he is not allowed to work independently. He is supposed to work for a broker, in order to gain the experience and training before going independent. And this is the factor which determines a broker’s income.
A broker usually has multiple agents working for him. He gets a fixed amount of commission on every deal these agents close.
For example, the commission rate of Marietta GA realtors is around 5-5.2%. When an agent closes a deal worth $200k, he gets to keep the 5% of the commission for the services he provided.
To calculate the 5% commission over $200k, it becomes $10k. However, the realtor does not get to keep the whole amount. Out of this percentage, almost half or 40% goes to the broker. This is the main reason why brokers earn such high amounts with low efforts. Because all the effort is done by the agents working for them.
As they have dozens of agents working for them, a fixed amount of each agent’s commission goes to them, making them one of the highest earners in the industry.
How To Find A Job As Real Estate Broker?
There are two types of brokers in the real estate industry.
- Associate brokers
- Independent brokers
An associated broker is someone who has got the brokerage but still works for another broker. So, if you want to become an associate broker, start looking for a broker who is willing to hire one. You can look for newspaper ads, TV ads and social media posts regarding real estate brokers. Asking friends and family members whether they know about any real-estate broker can be helpful too.
However, to start out as an independent broker, you will need to have a client base. In order to build a client base, do the following:
- Tell everyone in your circle of influence about your business.
- Post ads on different platforms.
- Attend events happening around and make new friends there.
What Are The Benefits Of Being Real Estate Broker?
Lastly, I would love to give the benefits of being a real estate broker.
- The number one benefit of being a broker is the additional qualification that comes with it. A broker has usually more certifications than a real estate agent.
- As a broker, you have your own office and agents working for you.
- You get to keep the higher split on commission.
- You can also provide training sessions, giving you an extra source of revenue.
- You can also become a property manager which involves handsome income as well.
There are numerous benefits of being a real estate broker. The income is great and the respect that comes with this designation is huge too. So, if you are having any whether being a real estate broker is good or not, say goodbye to all your doubts. It’s a good career can give you a lifestyle that one can only dream of.