Real estate licensing frameworks and requirements vary by state. In many states, you become a salesperson or sales associate first and then after a few years of experience, you are eligible to apply for a broker’s license. Salespeople must work for a licensed broker who has agreed to supervise them.
In other states like Washington, there is no salesperson license. The Washington State Department of Licensing offers broker, managing broker, designated broker, and branch manager licenses.
In states with a salesperson-broker structure, the requirements to obtain a broker license often include:
- Be 18 years of age
- High school diploma or equivalent
- 2 to 4 years of experience as a practicing salesperson
- Complete the required broker education
- Take and pass the broker licensing exam
- Complete the broker license application and pay the required fee
Education requirements for brokers vary by state. Most states require between 45 and 90 hours of real estate courses on mandated topics. Florida requires a 72-hour broker prelicense course plus a 60-hour post license course. In Texas, you will have to complete 270 hours of education on mandatory topics plus 630 hours of related courses for a total of 900 hours.
Steps for Getting a Real Estate Broker License
The basic steps for obtaining a broker license in most states include:
- Salesperson license: You must successfully complete the required education and licensing exam and submit an application and fees.
- Experience: Salespersons must have between 2 and 4 years of experience in the real estate industry before applying for a broker license. Some states require a certain number of “points” for transactions and education.
- Education: Broker applicants must complete 60 to 90 hours of approved real estate education.
- Exam: You must pass the broker licensing exam.
- Application and Fees: Complete the broker license application and pay the fees.
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What Else Should You Know About Becoming a Real Estate Broker?
Many real estate brokerage firms have salespeople, associate brokers, designated brokers, branch managers, and support staff. A supervising or designated broker is often the “boss” of the firm, sponsoring salespeople, holding their licenses, training them, and supervising their actions as licensees. For tax purposes, most licensees prefer to maintain an independent contractor relationship between salespeople and supervising brokers.
Often a salesperson is prohibited from accepting compensation directly from clients or customers; the commission is given to the designated broker, who then disperses a portion of it to the salesperson who worked on the transaction.
The designated broker owns the listings and is responsible for the actions of his or her salespeople. Most states have laws requiring specific supervisory duties that designated brokers must fulfill. Brokers can be liable for the mistakes of their licensees.