Real Estate Brokers are professionals who are involved in the sale of houses or other properties on behalf of sellers and/or buyers. In most states, brokers hold advanced licenses and manage a real estate office. In many cases, the office belongs to the broker; however, some brokers work for commercial real estate firms, overseeing real estate transactions. Brokers do many of the same things as Real Estate Agents, although brokers are distinguishable by the fact that only they are licensed to manage their own real estate businesses. Agents usually work under the supervision of a broker and provide their services to the broker on a contract basis. When the agent earns a commission, it is usually split between the agent and the supervising broker.
Many brokers are not merely overseers but are themselves active in arranging sales of houses or other properties. In this capacity, brokers often do the same jobs as agents. They interface closely with clients on issues such as the presentation of the property, the way it will be sold, the cost, and the viewing times. In this capacity, brokers need to know the local market well and they also need the ability to derive a good estimate for a minimum selling price. They also need to advertise the property effectively and to draw up the legal papers and arrange financing and insurance once an agreement is reached.
In today's world, real estate brokers make heavy use of the latest advances in computer technology. Basic information about all of their agency's listings is routinely placed on office computers. In addition, advertisements containing pictures of properties and their listing information are commonly posted on Internet sites as an effective means of advertising. Brokers also use computers to research other properties and to keep current on the latest prices in the local market.
Brokers have a wide variety of daily duties. A partial list of many of these is as follows:
- Manage and operate real estate offices
- Supervise agents who handle real estate transactions
- Obtain agreements from property owners to place their property for sale with a real estate firm
- Research similar properties that have recently sold
- Compare properties in order to determine a competitive market price
- Appraise property values
- Give buyers virtual tours of properties using computers
- Act as an intermediary in negotiations between buyers and sellers over property prices and settlement details
- Generate lists of properties for sale along with their locations, descriptions, and available financing options
- Maintain knowledge of real estate and fair housing laws
- Be fully cognizant of local economies, available mortgage options, and financing options
- Check work completed by attorneys, loan officers, and other professionals to ensure that it is performed properly
- Monitor fulfillment of purchase contract terms
- Arrange for financing of property purchases
- Accurately assess growth possibilities of the area where a property is located
- Maintain awareness of income tax regulations, local zoning regulations, building codes, and tax laws
- Rent properties or manage rental properties
- Arrange for title searches of properties being sold
- Ensure that environmental regulations are met on properties being sold
- Develop, sell, or lease property used for industry or manufacturing
Brokers and agents have similar work environments and job characteristics. They often work more than 40 hours a week and much of their work is done during evenings and on weekends. On the plus side, many brokers have the luxury to a large extent of determining their work schedule so as to be able to schedule time off when they need it. Brokers typically work out of an office, spending much of their time on the phone and/or on the computer. Some even work out of their home. When brokers are out of the office, most of their time is spent on the road meeting with prospective clients, showing properties to customers, or surveying the local area to analyze properties for sale.
A career as a real estate broker requires a good amount of both diligence and determination. The job can be both emotionally and financially rewarding, but it can also be challenging in terms of preparation needed and frustration engendered. There is a good deal of daily interaction with people. For this reason, brokers need to possess attributes likely to attract prospective customers. A pleasing personality, a good appearance, and enthusiasm for the job will help a broker build a strong client base. In addition, good judgment, strong organizational skills, maturity, and an ability to inspire trust will also serve a broker very well.
According to the U.S. Department of Labor Bureau of Labor Statistics (USDL BLS), employment of real estate brokers is expected to grow about as fast as the average profession through the upcoming decade. This projection, however, does not factor in shifts in the economy, which are not always predictable. The real estate industry in general is extremely sensitive to swings in the economy and most especially to shifts in interest rates. During periods of low economic activity and rising interest rates, the volume of sales declines and so do the earnings of agents and brokers. The USDL BLS notes that factors which point to job growth for real estate workers include relatively low interest rates and a general perception that real estate is a sound investment. Factors which may slow job growth include recent improvements in technology which now allow customers to perform their own searches for properties online, lessening to some extent the need for brokers or agents to perform the same function.
There is a good deal of turnover in this profession and as a result, a large number of job openings tend to arise on a regular basis. The profession is attractive due to its relatively flexible working conditions. Historically, many retired people and homemakers were attracted to the real estate field due to the flexibility of being able to enter, leave, and later return to the occupation based on the strength of the real estate market and/or their personal circumstances. Recently, however, there have been fewer part-time workers owing to an increase in startup costs caused by increasingly complex legal and technological requirements. Both part-timers and full-timers who are starting out in the profession can expect to face stiff competition from their better established and more experienced counterparts in obtaining listings and in closing sales.
The principal sources of earnings of real estate brokers are commissions on sales. Commission rates vary according to the value of the property and the commission-sharing arrangement associated with the transaction. In general, brokers share commissions with agents who work for them on any sales generated by the agent. Commissions are often divided among several agents and brokers when buyers and sellers are represented by different agencies. Earnings can be sporadic depending on the strength or weakness of the real estate market at any given point in time.
Real Estate Broker Classes, Certification, and Licensing
In every state, real estate brokers (as well as real estate agents) must have a high school diploma or equivalent. In addition, brokers are also required to have between 60 and 90 hours of formal training. Brokers wishing to work for larger firms would be well-served to earn a college degree. There are hundreds of colleges and universities offering courses in real estate leading to associate's, bachelor's, or masters degrees. Those seeking a career as a real estate broker should consider taking courses in statistics, finance, business administration, marketing, law, accounting, and/or economics.
All states require brokers to be licensed. Each state has its own process for obtaining a license and information regarding the procedure in a particular state can be found by contacting the state's real estate commission. Generally speaking, state requirements for brokers usually include between 60 and 90 hours of formal training and a specific amount of experience selling real estate, usually 1 to 3 years. In some states the experience requirements are waived for applicants who have a bachelor's degree in real estate. Candidates are also required to pass a comprehensive brokers exam which includes questions on basic real estate transactions and laws affecting the sale of property. In some states, licenses must be renewed annually by earning continuing education credits.
Brokers and agents alike can benefit from joining their area's local real estate agents' association. An equally beneficial move would be to join a national association such as the National Association of Realtors (NAR), which boasts over one million members. NAR also provides continuing education courses, which can satisfy some states' annual requirement for maintaining a license. Also, the widely-recognized designation of "Realtor" is a registered term belonging to the NAR, and only brokers and agents who belong to the organization are allowed to use the term.
- Licensing information by state
- The National Association of Realtors (NAR)
- The National Association of Real Estate Brokers (NAREB)
- Real Estate Broker's Insider Online
- Mortgage News Daily
Well over half of all real estate brokers are self-employed. A large number of them operate their own real estate agency, most of which are generally small. Many of these brokers have franchise agreements with national or regional real estate organizations, whereby the broker pays a fee in exchange for the privilege of using the widely known name of the parent organization. Under this arrangement, franchised brokers often receive help in training their sales staffs and in running their offices.
Schools for Real Estate Brokers are listed in the column to the left.