Real estate agents and brokers perform similar tasks: helping clients rent, buy, and sell real estate. Brokers, or managing brokers however, are licensed to manage their own real estate business. Real estate brokers can work as independent real estate agents or employ a team of agents, whereas sales agents are required to work for a broker. A broker works with buyers to determine their needs, locate suitable properties, prepare clients, and represent them during negotiations. When representing a home seller, a broker lists the property, advertises the home, arranges viewings, and represents the seller.
1. Complete Education Requirements
All states require real estate brokers and agents have at least a high school diploma or the equivalent. Most brokers take accredited pre-licensing courses, but many states waive this requirement for candidates who have taken real estate-related college classes. Because the real estate market is very complex, many employers seek agents who have taken related courses or obtained a degree in finance, law, economics, and/or business administration.
Optional courses can also assist in becoming a broker. Along with business courses, many real estate associations offer professional development classes for pre-licensed, new, and experienced agents and brokers.
2. Meet General License Requirements
Every state and the District of Columbia requires agents and brokers be licensed. While the licensing requirements vary by state, most require candidates be 18, pass an exam, and complete specific real estate courses. These licenses usually cannot be transferred among states, but some states accept licenses from other states in a reciprocity agreement. Some states have additional requirements like passing a background check. You will need to be licensed as a real estate sales agent before you can obtain a broker’s license.
3. Gain Experience as a Real Estate Sales Agent
Obtaining a real estate broker’s license usually requires anywhere from 1 to 3 years of experience as a real estate sales agent working in a brokerage. Most states, such as California, require two years of full-time sales experience within the last 5 years to obtain a real estate broker license. Texas has the most strict experience requirement in the United States: applicants must have at least 4 years of active experience as a licensed real estate sales agent immediately preceding the application to become a broker. Most states require sales agents train by completing pre-licensing courses from an approved school before becoming licensed.
4. Complete Mandatory Broker’s Courses
After obtaining enough experience as a sales agent, additional broker courses can be completed that cover additional topics like real estate finance and law. A state-approved broker training course that takes a few weeks to complete is necessary to obtain a broker’s license. The mandatory coursework varies by state, but it usually involves around 180 classroom hours covering contract law, agency law, real estate finance, real estate principles, and real estate brokerage. Some states require up to 630 additional classroom hours in related courses. Previous coursework for becoming a sales agent can meet this requirement.
5. Obtain a Broker’s License
After the course is complete, candidates can take the broker licensing exam followed by a background check. Licensing exams are usually performed by approved testing companies. In most states, additional coursework is required if the candidate fails the exam three times. The broker license exam also comes with application and background check fees.
After obtaining your real estate broker’s license, you can choose to start your own business and hire sales agents, work as an independent real estate agent, or continue working with a brokerage as an associate broker under a principle broker.