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Real estate broker
How to Become a Real Estate Broker in 3 Steps
To become a real estate broker requires additional education and licensing, and it allows the broker to work on their own or hire agents to assist them. This guide will show you how to become a real estate broker, the requirements involved, how much it costs, and helps determine if becoming a real estate broker is right for you.
We would like to thank Kaplan Real Estate Education, a provider of online real estate courses, for sponsoring this article.
Step 1: Complete Required Work Experience
Almost every state requires that you work as a licensed real estate agent for several years and/or complete a certain number of real estate transactions in order to get your real estate broker’s license. We’ll show you how state requirements for work experience can vary by state, and encourage you to explore on your own.
The table below shows the work experience requirements needed to get your broker’s license in California, Texas, New York, Florida, and Illinois.
Broker Work Experience Requirements by State
Two years of full-time work as a licensed real estate salesperson in the five years prior to applying for a broker’s license.
A degree with a major or minor in real estate from an accredited four-year university (case-by-case).
Experience as an escrow, title, or loan officer.
Experience as a subdivider, contractor, or speculative builder with comprehensive duties related to purchase, finance, development and sale of real property.
Experience as a real estate property appraiser.
Four years of licensure as a real estate salesperson in Texas in the five years prior to applying for a broker’s license or hold a current out-of-state broker’s license.
3,600 points of qualifying practical experience during four of the five years prior to applying for a broker’s license (for example, one closed sale = 300 points).
Two years of full-time work as a licensed real estate salesperson in the state of New York.
3,500 points of qualifying practical experience (for example, one closed sale = 250 points).
Experience and education requirements are waived for attorneys admitted to the New York State Bar.
Two years of full-time work as a licensed real estate salesperson during the five years prior to applying for a broker’s license.
Had an active real estate salesperson license for two of the three years prior to applying for a managing broker’s license.
Be licensed to practice law in the state of Illinois.
As the information above shows, states that require a certain number of transactions (like New York) generally work on a point system. The point system is offered to quantify transactions and make the experience easier to measure. For example, you will need a total of 3,500 points of experience to get your broker’s license in New York State.
In states that require proof of completing a certain number of transactions in order to get your broker’s license, it is important to know that different types of transactions often carry different point values.
Here are some examples of transactions and their point value in New York State:
- Single-family home, condo, co-op sale = 250 points per transaction
- Office building = 400 points per transaction
- Commercial lease = aggregate rent $1 – $200,000 = 150 points per transaction
- Rentals or subleases = 25 points per transaction
To see the rest of the worksheet for New York State, click here.
In order to have your work experience points count toward the 3,500-point requirement, you will need to have your managing broker complete and sign a form that is sent to the Department of State. While you do not need to submit documentation along with the form, documentation may be requested by the Department of State before you get your broker’s license, so be sure to keep solid records of your transactions that can be transferred and reviewed if need be.
Step 2: Complete State Pre-Licensing Education Requirements
All states require comprehensive pre-licensing education before you can apply for your broker’s license, which can vary anywhere from 45 hours to 900 hours. For a look at the educational variation in how to become a real estate broker, here are the requirements in California, Texas, New York, Florida, and Illinois.
Pre-licensing Broker Education Requirements by State
360 classroom hours total – 225 hours of state-required courses, 135 hours approved electives.
The five required courses are:
900 classroom hours total –
270 hours state-required core courses,
630 hours in related courses.*
* A bachelor’s degree from an accredited university in a related field can satisfy all 630 hours of related courses.
All previous real estate courses including the 180 hour agent/salesperson pre-licensing courses and CE courses count toward the core courses requirement.
The 270 hours of core courses must include:
120 classroom hours total – 45 hour broker qualifying course + 75 hours of salesperson licensing courses (already completed if you have a NYS salesperson license)
Topics covered in the 45-hour course include:
Education requirements are waived for attorneys admitted to the New York State Bar.
72 classroom hours
Course topics include:
45 classroom hours
Course topics include:
How to Find Real Estate Broker Pre-Licensing Courses
Real estate broker pre-licensing courses vary widely in quality and expense. When looking for solid broker pre-licensing course in your state, it’s important to find a school that has a good reputation, offers classes that can be taken around your busy schedule, and one that allows you to complete your education at a reasonable expense.
For real estate sales agent and broker pre-licensing courses, check out Kaplan. Kaplan has been educating students for more than 70 years, offering both in-person and online courses that can often be taken whenever you have free time. Best of all, Kaplan’s broker pre-licensing courses are competitive with (if not cheaper than) other less respected real estate schools.
Unfortunately, Kaplan broker courses are not available in all states. As of the time of this article, Kaplan offers full real estate agent licensing in 16 states and full real estate broker licensing courses in 13, so be sure to check if your area is covered or coming soon.
If Kaplan isn’t available in your state, here are three ways to find a good school in your state.
Ask Your Colleagues or Your Managing Broker
Chances are your coworkers or your managing broker will be able to tell you which pre-licensing schools are great and also which ones to avoid. Be sure to ask several people for a number of opinions, since most colleagues or brokers will only have experience with their own school. Designated or managing brokers who have run their own brokerage or hire other brokers are usually great sources of information and are aware of which schools they have good experiences with.
Call Your State Licensing Department or Check Their Website
Before pulling the trigger on a school, make sure they are accredited to offer broker pre-licensing courses in your state. One of the most essential components of how to become a real estate broker hinges on proper accredited education. This is the number one requirement when selecting a school. Be sure to call your state’s real estate licensing department for a double-check prior to signing up.
Run a Quick Google Search
A starting point to knowing what schools are good is knowing which schools are out there to evaluate. Google searches are local by default, so a quick search can often tell you what schools are close by for you to evaluate from there. Look for consumer reviews, complaints, whether the school is accredited to offer broker pre-licensing courses in your state, and any other information important to you prior to making a decision.
Step 3: How to Pass the Real Estate Broker Licensing Exam (on the First Try)
If you are spending significant time and money becoming a real estate broker, you want to take the broker exam seriously and pass it on the first try. In every state, the broker’s exam is more in-depth and longer than the agent/salesperson’s exam, so be prepared for an extensive test and study regularly until your test date.
Test preparation is key. It can take several months to complete the pre-licensing courses in some states, so attempting to keep that material fresh for the exam can be a challenge. For example, in Texas, you have 270 hours of coursework to complete that cannot happen simply in a few weeks’ time.
You need a solution to help keep the material fresh as you learn it, which is why Kaplan’s test preparation is so highly recommended for anyone taking the real estate broker’s exam. Kaplan starts you off with a diagnostic practice exam to assess your strengths and weaknesses and then goes from there to offer review programs that will work best for you. Keeping information top of mind and fluent will be essential to doing well on such long exams and getting the score you need to pass.
The real estate broker exam can be lengthy, so be prepared for a longer testing period than you might have anticipated. In California, for example, the broker’s exam is five hours long and broken up into two sessions, each 2 hours and 30 minutes long. In order to pass the exam, you need to get at least 75 percent of the 200 questions correct.
Cost to Become a Real Estate Broker
Guides that talk about how to become a real estate broker frequently omit the cost because it is tough to predict and very state specific. This section will give you a range of the costs so that you can plan better and estimate your upcoming expenses. As you will see below, there are many variables that can influence your costs.
In order to become a real estate broker, you will need to pay for the following:
- Pre-licensing education – approximately $300 to $2,000 depending on your state.
- State application and exam fees – approximately $150 to $200, depending on your state.
- Costs associated with starting a brokerage (optional) – approximately $500 to $50,000 or more per year (this includes the cost of office space, hiring agents, marketing, etc.). Brokers who open their own brokerages are called managing brokers. Many brokers choose to be associate brokers and work for a brokerage.
The table below breaks down the costs for real estate broker pre-licensing courses and application/exam fees in California, Texas, New York, Florida, and Illinois.
Cost to Become a Real Estate Broker by State
Total cost to become a real estate broker in California: $848 – $1,507
Costs vary widely (about $350 to $2,000+) depending on whether you have a college degree, continuing education credits, and post-licensing courses taken.
Total cost to become a real estate broker in Texas: $644.75 – $2,344.75
Total cost to become a real estate broker in New York State: $514
Total cost to become a real estate broker in Florida: $486.75
Total cost to become a managing real estate broker in Illinois: $500
If you are able to commit to your studies in an online environment, and the pre-licensing courses are available to you in that format, it is usually the most cost-effective option. For example, in California, the complete 360-hour home study course comes in at $448 if completed online.
Completing your California licensing requirements using a combination of live courses and on-demand courses (online video) will be significantly more expensive even if using the same provider. To complete the licensing requirements in California this way, you’ll pay a minimum of $169 per course. Since you need five required courses and three electives, your cheapest option (if you choose live courses) would be $1,112. Big difference.
Why You Should Get Your Real Estate Broker’s License
Examining how to become a real estate broker should not deter you from the many possible career benefits that come your way if you stay the course. While the experience and educational requirements needed to get your real estate broker’s license might seem daunting, upgrading your license is often worth the effort. Some advantages are found below.
- You can open your own brokerage: No more splitting commissions with your managing broker. You will be able to keep 100% of whatever commissions you collect. That being said, you don’t have to open your own brokerage. You can work as an associate broker at an existing brokerage.
- You can command a higher split if you choose to work for someone else: Managing brokers value education and applicants who are committed to real estate as their career. As an associate broker, you will be able to negotiate better splits with most firms you interview with.
- Increased job mobility: As a real estate broker, you are not only limited to helping clients buy and sell homes. Many boutique brokerages and startups need a managing broker simply to hang their license at their firms to operate. You may be able to get a salaried position at one of these firms with a bonus structure.
- You will get more leads and land more listings: While not everyone knows the differences between a real estate agent and a real estate broker, informed buyers and sellers do. This will give you an edge over agents who haven’t taken the time to get their broker’s license.
- You can start managing rental properties: Since rents are rising nationwide, many investors are purchasing and holding rental properties. Since investors may not have the desire or skills to manage their own rental properties, property management can offer you a lucrative new income stream. You need to have a licensed real estate broker on staff to start a property management firm.
The Bottom Line
Learning how to become a real estate broker is worth the effort. While becoming a real estate broker represents a significant investment in time and often money, the rewards almost always outweigh the risks.
Once you decide to become a broker, make sure you take your courses at a respected real estate school and sign up for a broker’s exam preparation course. While Kaplan is known for their quality, cost, and reputation in the industry, we hope you find success in whatever path you take.
About the Author
Julie Gurner is a staff writer at Fit Small Business, specializing in Real Estate. As a doctor of psychology who also took the real estate agent course, she has renovated and flipped properties in multiple states. Julie has been featured in The Huffington Post, and her answers on Quora have received over 7 million views. Her interests include restoring old homes, keeping fit, and real estate investing. She lives in Lancaster, PA with her wife, rescue dog, and curious cat.
SOURCE: SOURCE: NEF6.COM