A real estate broker is a professional who’s licensed to own and operate a brokerage, hire, and manage real estate agents, and represent buyers and sellers in realty transactions. Brokers earn a median salary of $70,400 and must meet educational and experiential requirements beyond those of agents and pass the broker licensing exam.
These additional education requirements can be time-consuming, but online course providers like McKissock Learning simplify the process. The platform offers individual or packaged prelicensing classes for licensed agents who want to upgrade to a broker’s license. Agents can also take continuing education courses. Click here to see the courses available in your state.
Difference Between Real Estate Brokers & Agents
Real estate agents represent buyers and sellers in real estate transactions but, unlike brokers, must work under the supervision of a broker. Meanwhile, a broker can perform the same duties as an agent but can also own a real estate company and hire managers or additional agents and are responsible for the transactions conducted by agents under them. For more information about the difference between real estate agents vs brokers, visit our article on the subject.
Types of Real Estate Brokers
In addition to the high-level differences between real estate brokers and agents, there are multiple types of real estate brokers, including associate, managing, and designated brokers. Each type of broker is required to meet different licensing requirements and can perform different roles and responsibilities as part of real estate transactions.
By law, every real estate agent―and every real estate agency―must be overseen and managed by a real estate broker. That broker, called the designated broker, bears the legal responsibility for all the transactions that real estate agents working under them complete. However, while these designated brokers need to sign off on real estate transactions, they do not have to manage the day-to-day operations of groups of agents or other brokers.
Managing brokers can manage a group of real estate agents or associate brokers in a brokerage. These brokers take a very active role in the day-to-day management of the brokerage. While some designated brokers also work as managing brokers, others leave the management to a separate managing broker.
An associate broker is a real estate agent who has completed the basic training and work experience required to upgrade from an agent license to a broker’s license; they have also passed the real estate broker licensing exam. Even though the law allows them to work independently or own their own brokerage, they have chosen to work under the license of another real estate broker.
Duties of a Real Estate Broker
The duties of a real estate broker depend on which type of real estate broker you are. If you choose to be an associate broker at an existing brokerage, you will have similar duties to real estate agents with some additional capabilities.
These are some duties of associate brokers:
- Manage transactions
- Market homes for sale
- Negotiate pricing
- Hold open houses
- Show homes
- Prospect buyer and seller leads
- Represent buyers and sellers in transactions
- Rent residential and commercial units; you may have to become a commercial real estate broker depending on your state
Designated and managing brokers tend to focus on high-level management and supervisory functions. However, they are not restricted from working directly with leads and prospects or continuing to close deals directly.
These are some of their duties:
- Reviewing contracts: This ensures deals structured in the best interest of the client or firm
- Distributing leads: A good broker ensures that incoming leads are fairly distributed among team members
- Establishing escrow accounts: A broker is responsible for establishing an account where monies involved in a real estate deal can be held in good trust until a deal is closed
- Liaising with government and professional associations: States highly regulate the real estate industry; therefore, it is the duty of the broker to understand any changes to the law and implement those changes to within his or her brokerage
- Manage agents: A managing broker is responsible for ensuring that the firm complies with relevant employment laws and that agents, as well as any support staff, conduct themselves legally and ethically both while they are at the firm, but also when they are with prospects
- Handle compliance issues and recordkeeping: Real estate transactions involve massive amounts of paperwork dealing with sensitive financial information in addition to requiring accounting records required by the state
- Market the brokerage: Brokers are responsible for building a firm’s brand and growing marketing awareness
- Recruit agents: A broker who is not selling directly relies on agents to conduct real estate transactions and bring in income for the firm; therefore, it is the responsibility of the managing broker to ensure that the brokerage regularly attracts top-talent
- Resolve conflicts: Real estate is a high-stakes industry and tempers can occasionally flare; the managing broker is responsible for de-escalating situations before they negatively impact either the brokerage’s brand or team’s culture
- Train agents: Agents, whose income relies upon commission rather than a flat salary, will leave a firm if they do not believe they are getting quality leads or the tools that they need to succeed, which is why regular training on tips, software, and other best practices is a necessity
- Property management: In addition to conducting real estate transactions, some brokerages might also offer services to help maintain a property’s value after an owner has moved away; these services can include things like arranging landscape maintenance, addressing heating and cooling issues, and coordinating light repairs
The tasks and duties of brokers vary widely depending on the state requirements and the brokerage. Make sure you understand the tasks that will be expected of you in a broker position before you begin.
Average Real Estate Broker Earnings
Real estate broker salaries vary widely depending on whether or not you run your own brokerage, the size of the brokerage you work for/own, and the geographic location of your brokerage. You can see more details about the average income of real estate brokers throughout the industry here.
Pros & Cons of Being a Real Estate Broker
There are several pros and cons to earning your real estate broker license rather than remaining an agent. In addition to earning higher commissions and having more independence than agents, brokers can act as property managers. However, real estate professionals must meet additional licensing requirements and face greater liability than agents.
Pros of Being a Real Estate Broker
- Independence: Brokers can own and manage their own real estate brokerage rather than having to work under the supervision of another real estate professional
- Higher commissions: As a broker, you can usually command a higher commission split than most real estate agents
- Property management: As a designated or managing broker, you can engage in property management for an additional revenue stream or as a new career option
- Improved networking: Brokers can leverage their experience and education to convince more clients to work with their teams
Cons of Being a Real Estate Broker
- Additional licensing requirements: Aspiring real estate brokers must have experience as licensed real estate agents, meet additional education requirements, and pass the real estate broker exam
- Increased liability & responsibility: Brokers are responsible for the actions of their agents and have additional responsibilities, including overseeing licensing requirements for their agents, providing training resources, and handling compliance matters
- Higher operating costs: Because brokers can own their own brokerage and hire and manage agents, their operating costs are higher than those of individual agents
How to Become a Real Estate Broker
To become a real estate broker, you must first become a licensed real estate agent. After you have a certain, state-specific amount of experience with real estate transactions, you are eligible to begin taking the real estate broker prelicensing courses to become a real estate broker. Read more about how to become a real estate broker in our article on the subject.
You’ll find that each state has very different requirements for the amount and type of experience you need to have before becoming a broker. Similarly, the educational requirements that need to be completed before the broker’s exam can be anywhere from 45 hours in Illinois to 900 in Texas. Check out your state’s website on the subject or read our article on real estate broker requirements to learn more.
Pro tip: Use a platform like McKissock Learning to take broker licensing courses and prepare for the licensing exam. In addition to required coursework, McKissock offers students access to learning tools like real estate textbooks, the Real Estate Math Handbook, the McKissock Student Forum, and a live course Q&A. Click here to see the courses available in your state.
Bottom Line: What Is a Broker?
Real estate brokers can represent buyers and sellers in real estate transactions, own and operate a real estate brokerage, and hire, manage, and otherwise oversee agents. To become a broker, you need to obtain a real estate agent license, meet the experiential requirements established by your state, take additional coursework, and pass the licensing exam.
Meeting the prelicensing education requirements for brokers can be difficult, but McKissock Learning, an online real estate school, can help you complete the additional coursework. As a student, you’ll have access to individual or packaged pre-licensing classes and continuing education courses. Click here to see the courses available in your state.