Real estate is a field that offers rewards and dynamic challenges. Whether you’re helping a family find their perfect home, or assisting a business owner in finding their new office space, as a real estate broker, you will play a role in some of the most significant decisions of people’s lives.
Becoming a real estate broker takes determination, drive, and a passion for the real estate industry. You’ll also need to gain the right education and professional credentials before you can start soliciting clients and brokering deals.
There are several roles within the real estate industry, and if you’re interested in pursuing a career in this field, you should know the difference between each one.
What Is the Difference Between a Real Estate Agent, Real Estate Broker, and Realtor?
If you’re looking into a career as a real estate professional, you may have heard the terms “broker,” “agent,” and “Realtor” used interchangeably. Although these titles have very similar goals and duties, there are a few major differences to be aware of.
Realtor
A Realtor is a member of the National Association of Realtors (NAR) — the largest trade organization in the U.S. with 1.5 million members. The term “Realtor” is a registered trademark held by the NAR. When someone holds this title, it signals a dedication to the profession and adherence to the NAR’s strict code of ethics. All NAR members, including brokers, sales agents, estate appraisers, property managers, and other industry professionals, can be considered Realtors.
Real Estate Agent
A real estate agent is a licensed professional who works for a real estate brokerage as an employee or independent contractor. After completing the required coursework and passing a licensing exam, an agent can represent either a buyer or seller and is responsible for facilitating property sales and other real estate transactions. After making a sale, an agent will earn a portion of the transaction cost as a commission.
Real Estate Broker
Unlike a real estate agent, a real estate broker is licensed to operate their own brokerage firm. Someone in this role can also work with buyers and sellers as an independent agent broker, or they can hire other real estate agents to work for their business and help it grow. Professionals in the real estate industry typically start as agents before they can become brokers.
Possessing additional training and extensive experience, a broker may oversee the more complicated aspects of a real estate transaction. As part of their real estate business, a broker might also undertake property management responsibilities and help landlords rent out their spaces. Additionally, they may work as a mortgage broker and help clients secure loans.
What Does a Real Estate Broker Do?
Brokers who work in real estate perform a variety of tasks and can serve different types of clients. They might work on the residential side, facilitating home buying, selling, and renting. They could also work with businesses and property investors who are buying, selling, and leasing out commercial properties.
The job duties of a real estate broker include:
- Understanding clients’ needs;
- Creating and sharing property listings for sellers and buyers;
- Promoting properties and the brokerage business through ads, listing services, and other marketing channels;
- Hosting open houses and private showings;
- Providing clients with advice on market conditions and guidance on developing a competitive purchase or sale price;
- Overseeing negotiations between buyers and sellers;
- Preparing real estate documents like deeds and purchase agreements;
- Ensuring that transactions comply with the law;
- Managing agents within the brokerage.
Even though home buyers and sellers aren’t always required to work with a broker, a majority opt to do so. Brokers can offer valuable advice about real estate market trends, mortgage rates, and negotiation tips while helping prospective buyers navigate complicated processes.
Skills Required as a Real Estate Broker
In order to excel as a real estate broker, you must possess a number of hard and soft skills. Naturally, real estate brokers must have an in-depth knowledge of the local real estate market, in order to understand property values and the potential benefits or downsides of particular areas and properties.
You’ll thrive in this role with the ability to communicate effectively and provide a positive client experience. In a survey by the Occupational Information Network (O*NET), 100% of real estate brokers reported communicating with email and phone calls every day. Face-to-face meetings and property tours are also a large part of the job.
This career also requires networking skills, in order to build relations with buyers, sellers, and other real estate professionals. This can help lead to future deals and other opportunities.
Real Estate Broker Salary and Job Outlook
Real estate brokers’ earnings can vary considerably, depending on the number of hours they work, the types of properties they specialize in, and the current market values. Experience also plays a significant role in compensation. Brokers earn a majority of their income from commissions, so they often start to earn more once they gain experience and expand their client network.
However, the BLS reports that, in May 2021, the median annual salary for real estate brokers was $62,010. The top 10% of earners made more than $176,080, while the bottom 10% earned less than $30,470.
Job candidates can expect to see new opportunities over the next several years. The demand for real estate professionals is projected to rise 5% from 2021 to 2031, according to the BLS. This rate is on par with the national average across all occupations.
Cities experiencing a rise in rental activity and residential property turnover are likely to provide the most opportunities for new real estate agents and brokers. The BLS explains that in competitive markets, brokers with college degrees will stand out from the competition.
How Do You Become a Real Estate Broker?
In most states, candidates need to have experience working as an agent before becoming a broker. The BLS explains that you’ll typically need two years of experience as a licensed real estate agent before you can obtain your state-issued broker’s license.
Once you start working in real estate, you’ll need to renew your license every two to four years by participating in continuing education sessions and other professional development activities. The specific details of these requirements may also vary by state.
Real Estate Broker Education Requirements
As part of earning your real estate broker license, you’ll need to complete formal training courses. In many states, college coursework can count toward licensure requirements. Some states may even waive the training course requirement if a candidate has taken real estate college courses.
If you’re interested in opening up your own brokerage business, a well-rounded education that includes essential business skills and topics such as finance, accounting, marketing, communications, and operations management will help you launch, promote, and sustain your own brokerage firm.
Do You Need a Degree for Real Estate?
While not a requirement, a bachelor’s degree can be helpful for a broker to hold. The skills taught in a bachelor’s in management program can help you develop the decision-making skills and analytical prowess necessary to succeed in the fast-paced real estate industry.
Given the responsibilities and career possibilities, a prospective real estate broker should be familiar with more than just the real estate market. They would also benefit from a strong finance background, such as a Bachelor of Science in Finance.
A bachelor’s degree in finance can be useful for all of the daily tasks of a real estate broker — from helping clients make sound property investment decisions and analyzing a landlord’s rent roll to weighing financial considerations related to running a profitable real estate agency.
Sources:
National Association of Realtors