We would like to thank Kaplan Real Estate Education, a provider online real estate courses, for sponsoring this article. Kaplan offers a great e-book on “Launching Your Real Estate Career” which can be downloaded for free here. All views expressed in this article belong exclusively to Fit Small Business.
After surviving your first few years as a real estate agent, you owe it to yourself to take the next step and learn how to become a real estate broker. You’ll make more money, get more respect from colleagues and clients, and best of all, have the opportunity to start your own brokerage and hire agents.
In this guide, we’ll cover the primary things you’ll need to know to become a real estate broker, including the following:
- What’s Required to Become a Real Estate Broker
- Your State’s Requirements for Work Experience
- Your State’s Requirements for Prelicensing Courses
- How to Find a Good Prelicensing Course in Your State
- How to Pass the Real Estate Broker Licensing Exam
- How Much Does it Cost to Become a Real Estate Broker?
- Why Should You Get Your Real Estate Broker’s License?
What’s Required to Become a Real Estate Broker
While the requirements vary slightly by state, in order to get your broker’s license, there are typically three main things you need to do:
- Complete the required work experience in your state;
- Take the required pre-licensing courses; and
- Pass the broker’s exam in your state.
Next, we’ll go over how to complete these three requirements and get your broker’s license.
Your State’s Requirements for Work Experience
Almost every state requires that you work as a licensed real estate agent for several years, and/or complete a certain number of real estate transactions in order to get your broker’s license.
The table below shows the work experience needed to get your broker’s license in California, Texas, New York, Florida, and Illinois.
Broker Work Experience Requirements By State
Required Work Experience
|2 years of full time work as a licensed real estate salesperson in the five years prior to applying for a broker’s license.
A degree major or minor in real estate from an accredited 4 year university. (case by case)
Experience as an escrow, title, or loan officer.
Experience as a subdivider, contractor, or speculative builder with comprehensive duties related to purchase, finance, development and sale of real property.
Experience as a real property appraiser.
|4 years of licensure as a real estate salesperson in Texas in the 5 years prior to applying for a broker's license OR hold a current out of state Broker’s license.
3600 points of qualifying practical experience during four of the five years prior to applying for a broker’s license. (for example, one closed sale = 300 points.)
|2 years of full time work as a licensed real estate salesperson in the state of New York.
3500 points of qualifying practical experience. (for example, one closed sale = 250 points)
Experience and education requirements are waived for attorneys admitted to the New York State Bar.
|2 years of full time work as a licensed real estate salesperson during the five years prior to applying for a broker’s license.
|Had an active real estate salesperson license for 2 of the three years prior to applying for a managing broker’s license.
Be licensed to practice law in the state of Illinois.
As the table shows, states that require a certain number of transactions like New York generally work on a point system. In order to get your broker’s license, you need to have proof of completing a certain number of transactions, each with a different point value. For example, in New York State, you will need a total of 3500 points of experience to get your broker’s license. Here are some examples of transactions and their point value in New York State.
Single family home, condo, co-op sale = 250 points per transaction
Office building= 400 points per transaction
Commercial lease= aggregate rent $1-$200,000= 150 points per transaction
Rentals or subleases= 25 points per transaction
To see the rest of the worksheet for New York State, click here.
In order to have your work experience points count toward the 3500 point requirement, you will need to have your managing broker complete and sign a form that gets sent to the department of state. While you do not need to submit documentation along with the form, documentation may be requested by the department of state before you get your broker’s license.
Here are the work experience requirements to get your broker’s license in California, Texas, New York, Florida, and Illinois.
Your State’s Required Prelicensing Education
In addition to qualifying work experience or education, all states require comprehensive prelicensing education before you can apply for your broker’s license. While the requirements in your state can vary anywhere from 45 hours to 900 hours of prelicensing education, here’s a quick breakdown for California, Texas, New York, Florida, and Illinois.
Prelicensing Broker Education Requirements by State
State Hours of Prelicensing Courses Required
Hours of Prelicensing Courses Required
|360 classroom hours total - 225 hours of state required courses, 135 hours approved electives.
The five required courses are:
Real Estate Practice (45 hours)
Legal Aspects of Real Estate(45 hours)
Real Estate Appraisal(45 hours)
Real Estate Finance(45 hours)
Real Estate Economics(45 hours)
|900 classroom hours total -
270 hours state required core courses,
630 hours in related courses.*
(*a Bachelor’s Degree from an accredited University in a related field can satisfy all 630 hours of related courses)
(All previous real estate courses including the 180 hour agent/salesperson pre-licensing courses and CE courses count toward the core courses requirement)
The 270 hours of core courses must include:
Principles of Real Estate (60 hours)
Law of Agency (30 hours)
Law of Contracts (30 hours)
Promulgated Contracts Forms (30 hours)
Real Estate Finance (30 hours)
Real Estate Brokerage (30 hours)
|120 classroom hours total - 45 hour broker qualifying course, + 75 hours of salesperson licensing courses (already completed if you have a NYS salesperson license)
Topics covered in the 45 hour course include:
Agency and Real Estate Brokerage
The Broker’s Office
Real Estate Finance and Investment
General Business Law
Construction and Development
Conveyance of Real Property
Taxes and Assessments
Local Concerns for Upstate New York
Education requirements are waived for attorneys admitted to the New York State Bar.
|72 classroom hours
Course topics include:
Getting Started in the Real Estate Brokerage Business
Valuing Real Property
Listing and Selling Real Property
|45 classroom hours
Course topics include:
Working with buyers and sellers
Short sales and foreclosures
Opening and maintaining an office
Building a successful team
Creating a policy manual
How to Find a Good Real Estate Broker Pre-licensing Course in Your State
When looking for a good broker licensing course in your state, you want to try to find a school that has a great reputation, offers classes that can be taken around your busy schedule, and finally a school that won’t charge you an arm and a leg.
For salesperson and broker prelicensing courses, we recommend Kaplan. Kaplan has been educating students for more than 70 years and offers both in person and online courses that can often be taken whenever you have free time. Best of all, Kaplan’s broker prelicensing courses are competitive with if not cheaper than other less respected real estate schools.
Unfortunately, Kaplan broker courses are not available in all states. If Kaplan isn’t available in your state, don’t worry. Every state has broker pre-licensing courses available. Here’s how to find a good school in your state.
Ask Your Colleagues or Your Managing Broker
Chances are your coworkers or your managing broker will be able to tell you what prelicensing schools are great and also which ones to avoid. Be sure to get several opinions here because most people will only have experience with one school.
Run a Quick Google Search
Google searches are local by default, so you should find schools in your area on the first or second page of the search results.
Call Your State Licensing Department or Check Their Website
Before pulling the trigger on a school, make sure they are accredited to offer broker pre- licensing courses in your state. Check with your state’s real estate licensing department.
How to Pass the Real Estate Broker Licensing Exam (on the first try)
Since you’re more than likely going to be investing a significant amount of time and money taking prelicensing courses, you need to take your broker’s exam seriously. In every state the broker’s exam is more in-depth and longer than the agent/salesperson’s exam. In California, for example, the broker’s exam is 5 hours long broken up into two two and a half hour sessions. In order to pass the exam, you need to get at least 75% of the 200 questions correct.
You also have to keep in mind that in states like Texas that require a minimum of 270 hours of study, it may take you several months to complete all the required courses. This is especially true for agents who need to continue working while taking courses. This is why test prep is highly recommended for anyone attempting the broker’s exam.
This is why courses like Kaplan’s real estate broker exam prep package are so popular with busy agents. They start you off with a diagnostic practice exam to assess your strengths and weaknesses, and then you can take online on demand or live courses to improve your knowledge.
How Much Does it Cost to Become a Real Estate Broker?
In order to become a real estate broker, you will need to pay for the following:
- Prelicensing education – Anywhere from $300 – $2000 depending on your state
- State application and exam fees– About $150-$200 depending on your state
- Costs associated with starting a brokerage (optional) – $500- $50,000 or more per year (this includes the cost of office space, hiring agents, marketing, etc.). Brokers who open their own brokerages are called managing brokers. Many brokers choose to be associate brokers and work for a brokerage.
The table below breaks down the costs for real estate broker prelicensing courses and application/exam fees in California, Texas, New York, Florida, and Illinois.
Cost to Become a Real Estate Broker by State
State Cost to Become a Real Estate Broker
Cost to Become a Real Estate Broker
Home study course package at Kaplan (360 hours): $448
Al la carte live and on demand courses at Kaplan: $1112
Exam fee: $95
Application fee: $300
Total cost to become a real estate broker in California: $848-$1507
Costs vary widely (~$350-$2000+) depending on college degree, CE, and post licensing courses taken.
TREC Application fee: $305
Background check: $29.75
Paper Processing fee: $20
Total cost to become a real estate broker in Texas: $644.75-$2344.75
Online course at Kaplan: $349
Application fee: $150
Exam fee: $15
Total cost to become a real estate broker in New York State: $514
Bob Hogue School of Real Estate: $395
Application fee: $91.75
Total cost to become a real estate broker in Florida: $486.75
Real Estate Institute: $350
Application fee: $150
Total cost to become a managing real estate broker in Illinois: $500
In states like California and Texas that require more than 300 hours of course time, the most cost effective way to get your broker’s license is via home study courses. In California for example, the complete 360 hour home study course comes in at $448.
However, if you choose to take a combination of live courses or on demand courses (online video or text based courses), you’ll pay a minimum of $169 per course. Since you need five required courses and three electives, that means your cheapest option if you choose live courses would be $1112.
Why Should You Get Your Real Estate Broker’s License?
While the experience and educational requirements needed to get your real estate broker’s license might seem daunting, upgrading your license is often worth the effort. Here’s why.
- You can open your own brokerage – No more splitting commissions with your managing broker. You will be able to keep 100% of whatever commissions you collect. That being said, you don’t have to open your own brokerage. You can work as an associate broker at an existing brokerage.
- You can command a higher split if you choose to work for someone else – Managing brokers value education and applicants who are committed to real estate as their career. As an associate broker, you will be able to negotiate better splits with most firms you interview with.
- Increased job mobility – As a real estate broker, you are not only limited to helping clients buy and sell homes. Many boutique brokerages and startups need a managing broker simply to hang their license at their firms to operate. You may be able to get a salaried position at one of these firms with a bonus structure.
- You will get more leads and land more listings – While not everyone knows the differences between a real estate agent and a real estate broker, informed buyers and sellers do. This will give you an edge over agents who haven’t taken the time to get their broker’s license.
- You can start managing rental properties – Since rents are rising nationwide, many investors, both large and small, are purchasing and holding rental properties. Since investors may not have the desire or skills to manage their own rental properties, property management can offer you a lucrative new income stream. You need to have a licensed real estate broker on staff to start a property management firm.
The Bottom Line
While becoming a real estate broker represents a significant investment in time and often money, the rewards almost always outweigh the risks. Once you decide to become a broker, make sure you take your courses at a respected real estate school and sign up for a broker’s exam prep course.