One of the most important pieces of advice that we offer to real estate agents is that they shouldn’t rush to go independent. Rushing to go independent can lead to disaster because without someone backing them up, inexperienced real estate agents make mistakes. Take your time developing your real estate agent skills before even considering going independent.
Once you’ve arrived at the point where you feel confident you can strike out on your own, the big question is, what does that mean? What does it mean for a real estate agent to go independent?
More often than not, going independent means that you’re ready to become a real estate broker. You could even run your own real estate brokerage firm.
How Real Estate Agents Become Brokers
Check out our step-by-step guide on how real estate agents can become brokers.
- Start by becoming a great real estate agent
Almost all brokers started out as real estate agents. Like so many things in the real estate industry, different states have different laws, but many states require that you spend at least 1 to 3 years working as a real estate agent before becoming a real estate broker.
Make sure to get your real estate agent experience before pursuing a broker career.
- Understand the different responsibilities between real estate agents and real estate brokers
First, check out real estate agent responsibilities: provide guidance and assists buyers and sellers to sell or purchase property, determine clients’ needs and whether those needs coincide with clients’ finances, and provide comparative market analysis to determine a property’s value.
Now, check out real estate broker responsibilities: work with real estate agents to support all real estate agent responsibilities, responsible for all transactions that come through the brokerage firm, attract potential clients, manage employees, and handle the brokerage’s finances.
Notice the main difference? Brokers are full-time business owners who support real estate agents. Once you become a broker the buck stops with you. You can’t blame anybody but yourself if a deal goes south.
Not only that, but you must still run the business even if a deal goes south.
- Understand what you must do in your specific state to become a broker
Requirements to become a broker change from state to state. What you must do to become a broker in California might be different than from what you must do to become a broker in Texas. All states require prospective brokers to take a broker training course, pass a test, and get a license.
- Look in the mirror and decide if you have what it takes to run your own brokerage firm
We’ve discussed how real estate agents should build a cash reserve. Brokers should also build a cash reserve. For brokers, though, the cash reserve could be double, triple, or even quadruple the cash reserve they needed as a real estate agent.
Building a cash reserve isn’t the only thing you must do to become a successful broker. All real estate agents who wish to become real estate brokers must understand that necessary business skills could be what makes you successful or not. If business doesn’t interest you, if you’re not willing to spend hours fine tuning your brokerage’s budget for the quarter, can cut costs when necessary, or make decisions based on the potential impact on your company, becoming a broker might not be for you.
To become a real estate broker, you must first real estate agent experience. Once you decide to switch careers from real estate agent to real estate broker, make sure you understand broker responsibilities and that you follow your state’s licensing requirements.