5 Things to Consider Before Becoming a Broker
Have you ever watched a real estate television show and thought, “Hey, being a real estate agent looks easy and glamorous! I’m fun, cute, and social! I could do that in my sleep”?
The truth is a career in real estate isn’t just driving around with people to chat and look at houses. The real estate industry is big business, and being an agent is a serious profession with a lot of responsibility.
Are you up for the challenge? Let’s find out! Below, we’ll review five things you need to know before becoming a real estate broker.
#1: It’s About Relationships
Here’s one that most people do know: real estate is all about people skills and relationships.
Real estate brokerage requires selling yourself and your expertise before you can sell properties. You need strong interpersonal skills and the ability to work with a variety of people. As an advocate and advisor, you’ll also need keen negotiation skills.
If most people know this, why’s it on the list of what to know before becoming a real estate broker? That’s because many people have not considered the serious responsibilities involved.
The relationship between a real estate agent and a client is not a casual one. Real estate license law specifies the responsibilities of licensees when they represent buyers or sellers, called “fiduciary duties”:
- Loyalty
- Care
- Obedience
- Accounting
- Disclosure
- Confidentiality
There are complicated legal and ethical considerations involved.
#2: It’s About Juggling Multiple Roles
As a real estate professional, you’ll be wearing several different hats: salesperson, matchmaker, advocate, coach, counselor, teacher, accountant, advertising wiz, and market expert.
It can be a lot to handle, but you’ll never be bored.
Real estate brokers are hired to manage the largest financial transactions of the clients’ lives. That means high stakes and high stress. A home is a big, emotional purchase.
Many clients and customers have little experience buying and selling real estate and unrealistic beliefs about how much house they can afford or how much money they can get. It would be your job to manage those expectations and educate your clients.
#3: It’s About Managing Your Own Business
One of the most challenging parts of becoming a real estate broker for most people is the one they most look forward to: being their own boss.
As a real estate broker, you’re an independent contractor in the truest sense of the phrase. By law, you must be supervised by a sponsoring broker, but you’re basically self-employed.
Many new agents are unprepared for a career change to a real estate broker because they don’t understand the full weight of making all the business decisions related to their practice. As a broker, you’ll have to actively secure business by finding clients. You’ll have to make the right decisions about what to do with your time. You’ll need to handle your own budget and pay for taxes, insurance, marketing, and other necessities.
In other words, showing houses is a very important part of the job, but there’s a lot more to it.
#4: It’s About Money Management
Real estate is not a traditional job with a predictable salary or hourly wage. Your income comes entirely from commissions on what you sell, meaning your pay will vary from month to month.
Not all of your commissions will be take-home pay, either. It’s business income, which means you’ll need to remember to pay your business expenses and taxes, as well as reinvest part of it into your business.
If you don’t sell, you won’t get paid, and it’ll take time to get your practice up and running. Until you can build up a client base and referral business, you’ll probably have a negative income due to the need to support yourself and invest in your business. You’ll need either savings or another job, which presents its own challenges.
#5: It’s About Hard Work and Lots of Hours
Real estate brokerage is a business that requires constant hustle.
Look back over the items above and think about the time and commitment needed to juggle multiple roles and clients.
As a real estate broker, you will be working weekends and odd hours. Clients and customers working 9 to 5 will want to look at houses in the evenings and on weekends. You may need to be available to show a property at a moment’s notice.
As a jack-of-all-trades growing your business, diligent research will be required. In this multifaceted profession, you’ll learn about your local market, economics, demographics, sociology, law, cultural trends, psychological factors, marketing strategies, appraisal, home inspection, and environmental issues.
It can be challenging to achieve a work-life balance with all this going on, especially at the beginning of your career.
Some may find this daunting, while others find it fascinating. For many, the varied, complex nature of the job is part of the appeal. You won’t be sitting behind a desk doing the same thing every day!
Ready to Take the Plunge?
While the hours and pay may vary and the stakes are high, real estate brokerage is a stimulating, rewarding career. You get to help people make their dreams come true!
If you’re ready to take on the thrill and challenge, you’ll need to look into your state’s requirements to become a real estate broker. The amount of time licensing requires will vary by your state’s real estate board, but the process always requires pre-licensing education, passing a state exam, clearing a background check, and submitting an application with fees.
For over 20 years, we’ve been helping aspiring brokers complete their real estate pre-license courses and prepare to pass the real estate exam on the first try. Our courses are state-approved, online, and self-paced. You’ll be able to study when and where it’s convenient for you and take your time with the material.
