Buying and selling real estate are two of the most challenging things people can do in their lives. Thankfully, the average person can get help from a real estate broker to make any transaction run smoothly. If you are interested in becoming a real estate broker, you should begin by understanding what is involved in the process and what you can expect from the position.
Before we delve further into the occupation itself, it's important to have a clear idea of what role a real estate broker plays in the buying and selling of property in North America. Part of the common confusion over the term involves the language used in different states. In some places, “real estate broker” is synonymous with “real estate agent,” but in most states, there is a clear difference between the two.
A real estate broker is not only licensed to assist in the buying and selling of property but is also licensed to operate an independent brokerage firm that employs real estate agents. For this reason, becoming a real estate broker requires more training than becoming an agent.
Required Training for Real Estate Brokers
To become a real estate broker, you'll probably need to start off as an agent. Requirements vary from state to state so you'll want to check with your local licensing board. Generally, however, you will need to complete between 40 to 90 hours of courses in real estate law and practice before you will be able to take an exam to be licensed in your state.
After receiving your real estate license, you'll need to find a position with a broker so that you can begin practicing for a time. Once you have some experience in the industry, you may want to consider moving on to become a broker.
Alternatively, you can bypass working as an agent if you are a college graduate in many states. However, this rule does vary by state so, again, you'll want to check with the licensing body in your state. Generally, there are some required courses you'll need to complete in order to be able to start working on your broker's license this way as well.
Once you complete the required training in your state, you can take the broker's exam. If you pass, you will be licensed and can open your own brokerage firm.
Keep in mind that real estate agents and real estate brokers are not necessarily the same thing as realtors. A realtor is an agent or broker who is a recognized member of the National Association of Realtors (NAR). Joining the NAR requires completing annual tests on the code of ethics recommended by the organization. Some realtors may also take additional coursework so they receive even further accreditation. Roughly half of all the agents and brokers in the United States are considered realtors.
Responsibilities of a Real Estate Broker
Once you get into real estate sales, you'll be facing a challenging position. As a broker, you may face dual challenges by having to manage your own business, including a staff of agents, and still work in real estate sales.
Even though you have gained a new license, you will still probably be doing much the same work you would have done as an agent. For example, you'll spend a good deal of your time trying to secure property to sell. Most brokers advertise their firm in hopes of being approached by home sellers, but you may also be able to connect with sellers through networking, referrals, and other means.
Prior to being able to list a home, you'll also be required to complete some research on the property. For example, you will need to check the title to ensure the home can be sold. You will also want to investigate the value of homes in the same area and will definitely need to examine the home yourself before determining a fair asking price.
Listing the home and representing the seller are only half of the duties you'll be expected to fulfill as a broker. You will also need to work with buyers and try to match them with available homes on the market. To be successful, you are going to need excellent communication skills and good people skills. If you have trouble talking to people, then going into real estate sales is probably not the right choice for you.
Generally, you will be approached by buyers who are interested in one of the properties you have listed. You can take them through the available home, but most brokers and agents will use this meeting as a chance to gain exclusivity with the buyer. This is done by signing a loyalty contract which means the buyer must go through you in order to see homes on the market. That ensures that you will end up receiving compensation for all of your work when the buyer finally closes on a property.
Besides showing properties, you will most likely be responsible for every step of the transaction between the buyer and seller. For example, you will probably need to help the buyer arrange financing for the property, especially if you are going to be working with first-time home buyers. You will also need to make sure any problems with the property, such as mold damage or needed electrical work, are fixed prior to closing. That can be a lot of pressure, because if any mistakes are made in those final weeks, the closing cannot happen as expected, and you will not make your commission on the property.
While being a real estate broker does include many responsibilities, you also have the option of turning over many of them to your trusted team of real estate agents who can handle the showing of the property and most of the paperwork. In fact, some real estate brokers have been able to manage their businesses far away from the location in which they are licensed to practice.
