If you’ve been a real estate agent for a while, you’ve probably thought about getting a broker’s license. Becoming a broker is the next logical step in your career. But, is it worth it to get a broker’s license?
If you have a passion for the real estate industry, it’ll offer you the opportunity to reach your full potential. However, not everyone is cut out to be a broker. Along with the additional earning potential and chance to further your career comes a lot more responsibility.
To help you answer whether pursuing a broker’s license is right for you, let’s take a look at some of the benefits and drawbacks.
Why it’s worth it
You’ll gain valuable knowledge
When you earn your broker’s license, you become an expert in real estate. More so than an average agent. This allows you to mentor, train, and help other agents.
This knowledge can give you an advantage in marketing, should you continue to work with clients directly. You will appeal to clients who are more discerning and prefer to work with masters of their craft.
Increased income
Uncapped earning potential is one of the greatest benefits of being a broker. Yes, technically this can be said for agents too. The more you sell, the more you’re going to earn.
But, with a broker’s license, you can also work as an agent broker. This means that you won’t have a split to deal with. You’ll have the ability to keep all of the commission on any sales.
You can also work as an associate broker. You’ll still work for another broker and meet with clients, but you will have additional power and reputation as a broker. This can allow you to negotiate a higher commission split than a standard agent.
You can also manage a team. The commission will come from the sales of your agents. The terms of the split can be negotiated based on the experience of the agent. In addition to the commission, your agents may pay you desk fees.
Less limitations
There is an increased level of flexibility when you have a broker’s license. Agents are limited in what they can do in real estate. Although you can represent buyers and sellers in real estate transactions, there isn’t much more.
If you love the sales aspect of the job, then you can continue to operate as an agent. Or, if you decide that business ownership is more your thing, you could start a real estate brokerage.
You don’t need to work for someone else, unless that is what you choose. There are many options available to you as a broker.
Career control
You have very limited control as an agent. You don’t have listings, your broker does. In many cases, you’re dependent on your broker to funnel leads to you. And chances are, you’re not the only agent they have.
As a broker, you can choose what your real estate role will be. This could be face-to-face interactions with clients, or remaining behind-the scenes and mentoring new agents.
You can even focus on rentals if you choose to. Brokers are required to be on the staff of property management companies in order to lease properties and collect rent. You can become a property manager, assist owners in renting their properties, or invest in rental property yourself.
Things to think about
Additional education
Not everyone is thrilled about the prospect of attending more classes or sitting for another test. Preparing yourself for the licensing exam can be time consuming and tiring. And, quite frankly, the test isn’t easy.
While you can certainly educate yourself, it’s highly recommended that you attend classes to gain your broker’s license. This can be costly, but it’ll pay off in the long run. The chances of you passing the exam are far higher if you’re properly educated.
There may also be continuing education requirements. Even if you’ve already obtained your license, your state may require you to take additional courses should policies or laws change.
Added responsibility
This may go without saying, but you will have more responsibilities as a broker. These responsibilities might not be something you like. If you start your own brokerage, then everything from marketing to contracts would be on you.
You may not find your broker career too fulfilling if there are aspects of the job you don’t particularly care for. Although, you don’t have to accept these additional responsibilities. You can still keep your current job as an agent and earn your broker’s license should you choose to.
Higher risk
If you are aiming to run your own agency, you will be responsible for the actions of the agents operating under your license. Should you do decide to work for yourself, you’ll be legally and financially liable for all your transactions.
By choosing to work for another broker, you will be covered by the safety net provided by them. Should another agent make a mistake, you wouldn’t be on the hook for it.
Conclusion
Being a broker is one of the best decisions you can make in your real estate career. You’re open to doing more, and earning more!
But, being a broker is not for everyone. Consider the pros and cons of pursuing a broker’s license to determine if it is the right decision for you.