Many people hear the titles of real estate agent or broker and believe they are one in the same. However, there are a few differences between the two. For one, the broker is usually the person in the office. He or she is typically called the Managing Broker or Broker of Record. In some states, the labels cause people confusion as general agents are also called as brokers though.
Folks that are thinking about joining the industry, as well as others that are just a little curious, should read further to find out, what is a real estate broker?
What Is A Real Estate Broker, And How Does It Differ From Being An Agent?
In most cases, the broker is a step above the agent. The individual usually has more education than the agent. Once they have obtained the knowledge and training, they must pass a broker exam. The test and requirements vary from state to state though. Brokers can work for themselves and hire salespeople as well. Some folks that pass the examination still choose to operate under another broker. These people tend to go by the title associate broker. Do you still want to know more about, what is a real estate broker? Read on to the next section to discover various useful tidbits.
How Real Estate Brokers & Agents Work Together
While brokers can work as agents selling properties themselves, agents can’t perform brokerage duties. Instead, the real estate agent must be employed by a licensed broker, who is responsible for their actions. These individuals sell, buy, or rent homes, offices, and other listings. However, they don’t typically receive a weekly paycheck. Rather, they get a specific commission after the sale becomes finalized. The amount will vary, but the industry standard that the agency receives is around 5 to 6%. The total the agent gets depends on the agreement that they have with their broker.
The percentage is usually split 50/50 between the buyer and seller’s broker. So, if a place sells for $100,000, the seller’s broker would get 3% of the proceeds while the buyer’s broker receives 3% as well. In this case, both firms would get $3,000. If the agent and broker arrangement calls for a 50/50 division too, the amount each party would get is $1,500. The opportunity is quite lucrative for everyone involved when the housing market is healthy and in full swing. If you still need answers for what is a real estate broker, then, stay put and continue reading.
How Do I Become A Real Estate Broker?
By now, people have likely found the answer to the question, what is a real estate broker? However, becoming one is another ballgame altogether. Brokers first gain experience as real estate sales agents. Before they can become an agent, most states require people to take a state-approved pre-licensing course. Not just anyone can teach the class though. The school must be recognized by the person’s hometown as well. Students will learn all kinds of things that will help them be successful in the industry. Topics that pupils should expect to study include but are not limited to items such as ethics, contracts, real estate laws, taxes, and insurance. Then, once the person has finished training and obtained their license, they can go to work for a broker.
In most places, an agent must be employed by a broker for at least two years to qualify for the broker exam. However, this requirement varies from state to state. Some locations may only necessitate the agents have a single year of experience while others mandate that candidates study at the brokerage firm for 3-years. Aside from on the job training, additional exam preparation is a must-have via state-approved broker courses. The classes serve as a touch up for the things learned in the previous pre-licensing program. Pupils should also expect to learn about subjects such as…
- Real Estate Investments
- Property Management
- Construction And Development
- Business Laws
- Regulations Pertaining To Operating As A Broker
How Does One Become Successful As A Real Estate Broker?
The above passage touched on being an associate broker. If a person is not ready to venture out on their own, they can usually remain employed with their current brokerage firm. In many instances, associate brokers get more perks than traditional real estate agents. For example, they may receive a higher commission percentage. However, they also take on more responsibilities and a heavier workload. These professionals do most of the tasks that the Managing broker does. Hopefully, this post has provided you with all of the answers to, what is a real estate broker?
Research by the Bureau of Labor Statistics projects that the employment rate for brokers and real estate agents will grow 11-percent between 2012 and 2020. So, perhaps there has never been a better time to switch careers than now. Remember though, while being your own boss offers plenty of advantages, not all aspects of becoming a broker are fun and games. The individual must purchase insurance, pay for advertising, and be able to attract new clientele to be successful. Luckily, society is in the midst of the technological age though. So, the person has more options when it comes to promoting their brand. While they can always stick to the tried and true methods of yellow page ads and billboards, folks will also find it in their best interests to get their name out there utilizing social media.
With any luck, these actions will keep your brokerage firm thriving for years to come. So, what is a real estate broker? The answer is simple, you are, providing that you are interested in joining a fast-paced, challenging, and rewarding industry. According to the Bureau of Labor Statistics, the median pay for brokers in 2017 was $47,880 per year, so don’t delay, and instead, obtain more information today.