In an age of specialization when good paying jobs are few and far in between, a large number of men and women become attracted to the profession of a realtor. With very low barriers to entry and substantial earning potential, the career as a broker in real estate has become extremely popular these days.
Even though tens of thousands of individuals join the profession of real estate with high hopes, nearly 90% of them fail miserably and quit within the first year. The success rate of newbie brokers may be minimal, but thousands continue to jump on to the bandwagon every year. In such a scenario, it is worthwhile to ask yourself whether you should get a broker’s license or stick with a sales agent license.
Difference between a sales agent and broker
There is a fundamental difference between the job as a sales agent and a broker in real estate. Brokers can work independently while a real estate agent must work under a brokerage with the necessary license. You can become a real estate agent by doing a course and then passing the state and national board exam, but you need to obtain an additional license to work as a broker. A broker is a professional who has also obtained the other license and experience required to function both as a sales agent and a broker. All brokers are real estate agents whereas all agents are not brokers.
Understanding the responsibilities
It is not just the function of a broker that is different from that of an agent. Both have differences in their responsibilities also.
Agents are salespersons in the sense that they represent buyers and seller. They do prospect for buyer and seller leads. They are required to market the properties and find buyers for owners. They show different properties to buyers. A significant function of a real estate agent is negotiating on behalf of their client. They help in drafting the contracts, sales agreements and help their clients during the closing of a deal.
The main job of brokers is to train and manage agents. They recruit new agents and resolve conflicts in their real estate transactions. They review contracts drawn by agents and make sure that they comply with the rules and regulations put in place by the state governments. They must market their brokerage and market the leads they get to their agents.
Once you know the functions and responsibilities of both agents as well as brokers, it becomes easy for you to decide on what you want to grow in the future. If you have an outgoing personality and you believe you can convince others in buying and selling properties, becoming a real estate agent is a good career option for you. On the other hand, if you are better at managing your office and staff, it is a better idea to become a broker.
Benefits of having a broker's license
You can work as a real estate agent without obtaining the broker’s license. However, you must pay the fee of the brokerage that is licensed to conduct real estate sales. It is not just the savings on your commission but also the control you get with a broker’s license that is important while working as a realtor. You also get the freedom to hire other real estate agents to work for your brokerage. This means you can increase your earning potential by having a team of agents working under your brokerage. With a broker’s license under your belt, you can enjoy many more real estate investing avenues that aren’t possible with a simple real estate agent’s license.
Brokers can earn more by recruiting agents under them
Of course, you need a bit more training and education to be eligible to work as a broker. You are one step above an agent who must work for you whereas you can run your independent business. The exam to become a broker is lengthy and requires in-depth knowledge about real estate. It is undoubtedly more difficult than the exam needed to become a real estate agent. Once you get the broker’s license in your state, you can set up your own real estate firm and hire agents to work for you.
How do you become a broker?
Different states have different criteria for obtaining the license of a real estate broker. You need to find out the educational and licensing requirements in your state before you take a step in this direction.
You must be over the age of 18, completed the required broker pre-license courses for your state, and passed the broker state exam. You must have experience as a real estate agent for a specific time depending upon the state in which you are living.
You also need to have accumulated a certain number of points based upon real estate transactions done as a real estate agent. Broker licensing courses are generally on the same subjects as a sales agent’s license.
The bottom line
At the end of the day, it is entirely your personal choice whether you want to work as a real estate agent or a real estate broker. Both professions are in high demand, and both earn attractive income yearly. You can choose to continue as an agent. But if you want to take a different path in your career, you always have the option of becoming a real estate broker.