When you first found your passion for real estate, you didn’t know a fraction as much as you do now. But looking back, you realize you had nothing to be afraid of.
Real estate terms, reading comps, and regulations come easily to you. Being a broker will too.
Taking a huge step like that can be scary but in this article, we’ll show you it’s not as bad as you’ve heard. Keep reading to find out how to become a real estate broker in seven easy steps.
The Difference Between an Agent, a Realtor, and a Broker
Before we dive into how to become a broker, we need to go over the differences between an agent, a real estate broker, and a realtor. For people not involved in real estate, they think these terms are interchangeable but they’re not.
A real estate agent is a professional who has passed the required real estate classes and licensing exams in the state where he intends to work.
A realtor is a real estate agent who went through the process of becoming a member of the National Association of Realtors (NAR). Realtors must abide by the association’s standards and code of ethics.
A real estate broker continued his/her education and obtained a real estate broker license. Brokers work independently and can hire other agents.
How to Become a Real Estate Broker
Becoming a broker does take a little bit of money and time and a lot of commitment. But the rewards are plenty!
As of August 2018, brokers make an average salary of $51,855 which doesn’t include bonuses and commissions. Some brokers make well into six-figures and the best part? They’re their own boss.
There are more than 86,000 brokerage firms in the U.S. But there’s definitely room for more! More people own their home than ever before and that means someone needs to help them buy the right house and sell their old one.
1. Ask Yourself Why You Want to Become a Broker
You first need to ask yourself why you want to become a broker. Then, you have to ask yourself if you’re prepared to get your license. There’s a lot to know before diving in.
The costs of becoming a broker vary by state. In Texas, it can be anywhere from a few hundred dollars to more than a thousand. It could take a few months to get licensed. You’ll have to check your state’s real estate board to find out their schedule of courses and tests.
2. Get Familiar with Everything a Broker Handles
If you’re an agent or realtor, you may not have realized how much work a broker does. Most of it is administrative, so if paperwork and spreadsheets aren’t your favorite thing, you’ll want to read this section.
Broker duties include:
Completing, submitting, and filing documents, agreements and lease records
Organizing appointments, showings, open houses, listings, and meetings
Creating promotional and marketing materials
Maintaining paper and electronic filing systems
Creating and building databases, including clients and listings
Researching comps and drafting comparative market analysis (CMA) reports
Responding to all communication
Keeping websites and social media accounts updated
You may be thinking that you’re not creating flyers or posting on social media, you’ll hire someone else to do that. But starting your own firm costs money and you may not have it in the budget to hire a full office staff. That means you’re the office staff.
3. Complete Work Requirements
Regardless of what state you live in, you can’t decide to become a real estate broker, pay some fees and voila! You’re a broker. Almost every state requires you to be a licensed agent and/or complete a number of transactions to get your broker’s license.
For example, in Texas, you must be a licensed real estate agent for four years. You must also have 3,600 points of qualifying practical experience during four of those five years before you apply for your broker’s license.
The State of Texas gives transactions points, depending on the type. Closing on a sale is worth 300 points while executing a lease is worth 50.
In most states, agents with at least two years experience can start training to be a broker. Broker courses are like agent training but also cover the law as it applies to running a brokerage firm. You’ll also learn about the law in regards to real estate investments, business, construction/development, and property management.
Some brokers opt to stay with their firm and become an associate broker. This gives them the same duties as an agent without the liability of being a broker. It’s a form of training as you learn valuable experiences for when you open your own firm.
5. Apply for Your License
Depending on where you live, you may be able to apply for your license while you’re still enrolled in coursework. Some states want you to complete your classes first. Make sure you follow your state’s instructions on when you can apply.
6. Study and Background Checks
After your real-world training and broker’s courses are complete and you’ve met your state’s requirements, you will have to pass a broker’s exam before you get your license.
It’s important to be serious about the coursework even if it’s info you already knew from your agent courses. In Texas, you have 270 hours of coursework to complete before you take the exam. So, take notes and study!
In Texas, your fingerprints must be on file with the Texas Department of Public Safety (DPS) and you’ll have your background check run. If you don’t pass your background check, you won’t get your license. If an investigation opens, you’ll have a delay while it gets sorted.
7. Pass the Exam
All that studying comes down to passing the exam. You want to pass it the first time as most states will have a limit to the number of times you can take it. In Texas, if you fail the exam three times, you must contact TREC. They will have you take more classes or receive further training.
Break up with Your Broker
Can you imagine not paying broker commission splits? Can you picture building your own brand and hiring your own agents instead of building someone else’s?
Now that you know how to become a real estate broker, it’s time to live your dream and become one. At BrokerBreakUp, we can help.
We’re built on the foundation that agents should have the right to build their own brand. That means collecting 100% of your earned commissions. We also provide unparalleled support that fosters productivity and adds value to your business.