When you first started out in real estate, you were probably focused on becoming a real estate sales agent as a way to get your foot in the door of the industry. Over time, however, you may have developed new goals, including serving as a mentor for other agents, taking on a leadership position within your brokerage, or even starting your own independent brokerage or heading up a franchise brokerage. In order to make these professional dreams a reality, you’ll need to obtain a broker’s license.
Being a real estate broker requires a higher level of experience, expertise, and knowledge and comes with additional responsibilities. However, the rewards can be great, and being a broker can open up a wide variety of doors in your career. Keep in mind: just as with agent licensure, broker licensure requirements varies from state to state, so check with your state’s professional regulatory agency for specific guidelines in your area.
Steps to Getting Your Broker’s License
While specific requirements vary from state to state, you’ll generally need to do the following in order to get your broker’s license.
- Meet the age requirement, usually a minimum of 21 years old at the time that you apply for the license.
- Have some experience as an active, licensed real estate agent. In many states you’ll need at least two years of agent experience, while in others you’ll need four or more.
- Complete pre-license broker education courses which are much more in-depth than the licensure courses for your sales agent license. Your coursework will go into more detail on legal, financial, and contract issues, as well as issues related to ownership and management of a real estate office.
- Pass a state examination as well as to complete the application and background check for the broker’s license. This will include an evaluation of your criminal history and your history as a licensed agent.
- In order to continue working as a broker, you’ll need to complete post-licensure education within the first year after licensure.
How Long Will It Take to Upgrade Your License?
Most states require 60 to 90 hours of classroom instruction in either an in-person or virtual classroom setting to prepare for the real estate broker licensure exam. In addition to basic instruction, you will no doubt need to review material and undertake a test prep process in order to get ready to sit for the broker’s exam.
The time it takes to prepare for your exam can vary significantly based on other factors, including:
- Your work schedule
- Your personal life
- Your study habits
- Your experience and expertise
- Your class format and pacing
For example, if you are still working full-time as an agent, balancing the demands of your family life, and taking a self-paced online prep class, it may take you longer to prepare for the exam than someone who stops doing client work to take a full-time, intensive, classroom-based prep course.
How Much Does It Cost?
There are a number of costs associated with obtaining your real estate broker’s license. The breakdown includes:
- Pre-licensing coursework: This can vary from $200 for an online course to more than $500 for classroom instruction.
- Licensure application: Your application process will usually run around $150, including test fees, application fee, fingerprinting, and background check.
- Post-licensing coursework: Within the first year, you will generally have to pay several hundred dollars to complete post-licensure coursework. Thereafter, you will have to fulfill ongoing continuing education requirements for license renewal each year. Costs vary according to the number of hours required and the type of training you undertake.
How Much More Can You Earn as a Broker or Managing Broker?
According to the Bureau of Labor Statistics, there is not a lot of difference between pay for the average real estate agent ($48,690) versus the average real estate broker ($58,210). However, this statistic is misleading due to the wide variety of opportunities open to real estate brokers and the large difference between brokers at the top and bottom of the earnings scale.
Broker licensure opens the door to opportunities including:
- Leader of a real estate sales team
- Managing broker of an independent or franchise brokerage
- Broker/owner of an independent or franchise brokerage
- Real estate investment and development
- Real estate investment portfolio management
- Real estate property management
In addition, real estate brokers may have an advantage with clients due to their higher level of education and more extensive qualifications. This can translate into more commissions through representation of larger, more complex properties and transactions.
While it takes some time and money, the additional opportunities you’ll gain from earning your broker’s license will continue to pay dividends throughout your career. Build your professional reputation and potential as you build your knowledge base and expertise.