How to Become a Successful Real Estate Broker
Allison Potts is an editor and resident technology geek for Fit Small Business. She works with our sales, marketing, and real estate team.
This article is part of a larger series on How to Become a Real Estate Agent.
A real estate broker has more career options than sales agents, like owning their brokerage and hiring agents, but there is also a higher level of responsibility, education, and experience required. We will show you how to become a real estate broker, plus discuss the advantages of taking this step in your professional development.
It’s important to note that there are a few single-licensure states, like Colorado and Oregon. This means newly licensed real estate professionals have titles such as “broker” or “provisional broker,” but do not have the capability to manage or own a brokerage. However, in this instance, the term real estate broker refers to agents who want to upgrade their license and become an associate broker, managing broker, principal broker, or broker-in-charge.
1. Meet State Licensing Experience Requirements
Since real estate brokers have more responsibilities, almost every state requires you to have a certain amount of work experience as a real estate sales agent and participate in a number of transactions before applying to take the real estate licensing exam. Additional requirements, like having a clean background check or minimum score on the exam, may also be required, so make sure you check your state.
Example Broker Work Experience Requirements by State
State | Required Work Experience |
|---|---|
Two years of full-time work as a licensed real estate salesperson in the five years prior to applying for a broker’s license. Or:
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Four years of licensure as a real estate salesperson in Texas in the five years prior to applying for a broker's license or hold a current out-of-state broker’s license. You also need 3,600 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). | |
Two years of full-time work as a licensed real estate salesperson in the state of New York and 3,500 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. | |
Two 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 two of the three years prior to applying for a managing broker’s license. Or be licensed to practice law in the state of Illinois. |
The states that require a certain number of transactions, like New York, usually work on a point system. The point system is offered to quantify transactions and make your experience easier to measure. For example, you will need a total of 3,500 points of experience to get your broker’s license in New York State.
In states that require proof of completing a certain number of transactions in order to get your broker’s license, it is important to know that different types of transactions often carry different point values.
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 to $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.
2. Take Prelicensing Education Courses
All states require comprehensive prelicensing education before you can apply for your broker’s license, which can vary anywhere from 45 hours to 900 hours. For a look at the educational variation in how to become a real estate broker, here are the requirements in California, Texas, New York, Florida, and Illinois.
Prelicensing Broker Education Requirements by State
State | Required Pre-licensing Course Hours | Required Course Topics |
|---|---|---|
360 total classroom hours, comprised of:
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900 classroom hours total, comprised of:
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120 classroom hours total, comprised of:
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72 classroom hours |
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45 classroom hours |
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Real estate broker prelicensing courses vary widely in quality and expense. When looking for the best real estate broker classes in your state, look for a school that has a good reputation, offers courses that can be taken around your busy schedule, and one that allows you to complete your education at a reasonable expense.
3. Pass the Real Estate Broker Licensing Exam
You’ll find that the real estate broker’s exam is significantly more in-depth than the salesperson exam, so it’s key to plan ahead, be prepared, and utilize study tools as much as possible. For more extensive information on how to pass the real estate broker exam the first time, check out this article.
4. Choose a Real Estate Brokerage to Join
While you can choose to start your own real estate brokerage right away, it’s a good idea to join a firm as an associate broker for a period of time, where you can continue to build up your network and gain valuable experience. However, there are specific factors you should consider when choosing a brokerage to maximize your potential for success.
Here are tips to consider when choosing a brokerage:
Ask Current Agents About Brokerage Culture
When evaluating the best brokerage for your personality and work style, first consider whether you want to work for a brokerage franchise or a small, boutique brokerage. Then check the availability of mentorship opportunities, your preferred niche, and how many social events you want, like company get-togethers and open house caravans. Speak with current and former brokerage agents to determine whether the company is a good fit.
Research the Brokerage’s Reputation & Market Share
A brokerage’s market share is the percentage of the market’s total sales earned by the brokerage over a period of time. Brokerages with a high market share and positive reputation are more likely to generate the leads you need to succeed. Conduct preliminary research on each brokerage’s reputation and market share. Then, ask each broker about how they perceive their current market share and reputation and the steps they’re taking to grow business.
Confirm There’s Sufficient Back-office Support
When interviewing brokers, ask about the types of software they provide their agents. Make sure the brokerage is using a high-quality customer relationship management (CRM) tool to assign leads to agents, and find out how the broker and agents track and nurture leads. Also, consider whether the brokerage provides clerical or administrative assistants for its agents or if agents are responsible for hiring their own assistants.
Understand Commission Splits
Real estate brokers are rarely paid a salary, and commissions vary based on a number of factors like geographic area and the resources provided by the brokerage. Before interviewing brokers, familiarize yourself with the average commission split in your area so that you have a basis for comparison. Then, weigh the tools, administrative support, and other resources against the commission split to choose a brokerage that offers the best value for your needs.
Ask About Agents in the Brokerage
In addition to educating yourself about reputation, commission splits, and tools used by the brokerage, find out what your role with the brokerage will look like. Ask the managing broker what type of agents or associate brokers they typically prefer, what their goals are for growth, and what kind of obligations you’ll be expected to meet as part of their team.
Additional questions to ask a managing broker you’re considering include:
- What type of agent are you looking for?
- What kind of goals do you have for your brokerage?
- Is there a training plan in place for new agents?
- What would my obligations be to the brokerage as an employed agent?
5. Find a Niche to Specialize In
According to a survey conducted by Real Estate Express, a real estate agent or broker’s salary can triple if you serve a specialized niche. For that reason, it’s important to choose a brokerage that not only has a healthy market share, but also serves a defined niche. This will allow you to become a market expert much faster and better serve leads that are consistent with your interests.
6. Evaluate Marketing & Lead Generation Tools
A real estate broker’s success is linked to their ability to generate, nurture, and convert leads into listings and sales. Whether you choose to go into business for yourself or join a team, it will be important to regularly evaluate marketing and lead generation tools like Real Geeks or Zillow Premier Agent to ensure you are reaching the broadest audience possible.
7. Introduce Yourself as a Broker
At the end of the day, the majority of your success as a broker will depend on your networking skills. Successful brokers are constantly growing their sphere of influence, which starts by introducing yourself to neighbors, friends, and acquaintances as a licensed broker. While these people may not be in a position to buy today, they can always become leads or a source of referral leads tomorrow.
Why You Should Get Your Real Estate Broker’s License
Learning how to become a real estate broker may seem intimidating, but there are many benefits if you commit to putting in the necessary work. There is a higher level of expectations for real estate brokers, but it can be worth the effort.
These are a few advantages to becoming a real estate broker.
- You can start your own real estate brokerage: Instead of splitting commissions, you will be able to keep 100% of whatever commissions you collect. However, you can also choose to work as an associate broker at an existing brokerage.
- Negotiate a higher commission: 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 and increase your real estate broker salary.
- 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.
- More leads and more listings: While not everyone knows the differences between a real estate agent and a real estate broker, informed buyers and sellers prefer brokers over agents.
- You can start managing rental properties: Since rents are rising nationwide, many investors 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.
Bottom Line
Researching how to become a real estate broker can help you make the best choices about the next step of your real estate career. While there is a significant investment of time, effort, and finances required in order to become a real estate broker, it can be an extremely fulfilling career.
To make the process of earning your broker’s license as simple as possible, make sure you choose the best real estate school, like Real Estate Express. Their broker prelicensing courses and exam prep course will be the best tools to prepare you for the broker’s exam and setting a foundation for your broker career.
