Do you feel right at home brokering property deals between buyers and sellers? A career as a real estate broker may be right up your alley — if you’re willing to obtain a professional permit known as a broker license.
Read through to get the scoop on whether you need this permit and how to get a broker license.
What is a real estate broker?
Real estate brokers facilitate transactions between buyers and sellers of property and land and may also oversee operations at a brokerage firm. Generally, a real estate broker is a person who has met more rigorous requirements than a real estate agent. Therefore, a broke has more credentials and experience than an agent.
A broker can be of particular value to his or her clients during advanced real estate transactions such as those involving foreclosures. The increased knowledge you have at your disposal as a broker can also be used to generate additional revenue streams. You can, for example, take on extra work in property management or even open a property management firm of their own.
He or she can also choose to work independently or hire other real estate agents to work for them, whereas a real estate agent must operate under a broker. Some brokers also receive a cut of the commissions of the real estate agents they oversee.
Brokers generally fit into one of three roles in a brokerage firm:
- Associate broker: These brokers work under another broker and do not typically manage other real estate agents.
- Managing broker: These brokers have substantial managerial responsibilities, including the recruitment, training and supervision of real estate agents.
- Principal broker: These brokers have extensive managerial and administrative responsibilities above and beyond that of a managing broker. Additional duties include contract sign-off, dispute resolution and legal compliance.
Do brokers need a license?
Yes, in fact, the key difference between brokers and real estate agents is that brokers have completed additional licensing requirements above and beyond what a real estate agent must obtain. Real estate agents who want to become brokers must get an additional broker license from their respective state. This involves completing pre-licensing work and educational requirements. Lastly, passing a comprehensive exam that tests your real estate know-how.
What’s the process for getting a broker’s license?
The steps for how to get a broker license can vary by state but usually include the following:
- You must be at least 18, be in good standing with the law and live in the state in which you plan to practice as a broker.
- Work as a real estate agent: You will generally need to get a certain number of years under your belt as a licensed real estate agent. Some cases require a certain number of points of practical work experience. In California, you need at least two years of experience as a full-time licensed agent within the last five years. Or equivalent education or activities.
- Complete required coursework: Broker educational requirements vary by state but generally includes a certain number of mandatory and elective courses. California calls for five required and three elective college-level real estate courses spanning the practical, financial and legal aspects of brokering.
- Pass examination: You will need to take and pass the broker exam. In California, you must get at least 75 percent of 200 questions right to succeed.
- Apply for licensing: After passing the exam, you must apply for and obtain approval for a broker license. In some states, you can put for the broker exam and license at the same time. Both come with a fee.
Check the Department of Real Estate or Division of Licensing website for your state for the latest broker licensing requirements.