How to find a real estate broker
There is sure a clear distinction between a real estate broker and a real estate agent. Most important point is: Agents can sell and list homes, but they are not licensed to operate independently. They must work under a broker, as brokers are expected to have a deeper knowledge of state and federal laws. Most states also mandate a few years of work as an agent before someone can become a broker.
In some cases, states will hold off on full licensure until someone can confirm they’re working with a broker. Preparing for your test isn’t the only thing you need to think about as you work toward your license. You also need to network and look for a broker, either by finding an agency that is looking for new sales agents or an independent broker willing to work with agents.
How a broker actually helps
Some of the distinctions between a broker and an agent can be really small. The exam for each is similar, but the differences between them highlight the expertise that a broker brings to the table. To unpack this, let’s go back to that outline of the Massachusetts state real estate licensing exam we used earlier.
Here are a few highlights that emphasize what makes brokers unique.
Property ownership law. The test for brokers will typically include more questions in this section than the one for agents. What’s more, brokers are expected to understand how to manage situations in which the property ownership is held in trust, something that isn’t expected of agents.
Leasing and property management. For this part of the exam, brokers are expected to demonstrate an understanding of best practices in setting rents and lease rates. The broker exam will also usually emphasize this category more than agent exam does, as it makes up 5 percent of the broker test and just 3 percent of the agent assessment.
Practice of real estate. The part of the exam that focuses on day-to-day operations in the industry asks brokers and agents a largely similar set of questions. However, brokers need to deal with questions pertaining to supervisory responsibilities in an agency setting and demonstrate knowledge of how to manage both licensed agents and personnel in roles that don’t require licensure.
Real estate calculations. Both brokers and agents are expected to have a basic understanding of math concepts and transaction calculations associated with real estate practice. However, brokers also need to have expertise in calculations pertaining to valuations and rate of return for properties.
Requirements governing licensees. This last part of the exam includes material that is exclusive to brokers. Since part of their job is overseeing agents, brokers are expected to understand best practices for keeping records related to licensing.
There are small distinctions in the subjects emphasized in the broker exam versus the agent exam. Both agents and brokers need foundational knowledge about major industry issues, but brokers are trained to handle some of the most legally complex, nuanced aspects of real estate operations. You’re going to want a broker who is ready to answer your questions and help you navigate complex situations.
Joining a firm
In many ways, finding a real estate broker is kind of like finding a job. You need to search industry listings for brokers who are open to taking on a new agent, interview with the broker to determine if there’s a personality fit, and then decide whether the logistics work for you.
This last point is where things get really tricky. A real estate agent looking for a broker can end up feeling like a traditional employee looking for an employer, but a report from The Balance emphasized that some agents think of themselves as their own bosses and consider the broker relationship as more of a formality.
Whether you want the organizational structure of a supervisory broker or are hoping to find somebody who is more of a hands-off consultant, you really need to think about what you need from the relationship.
The Balance article explained that many agents get caught up in the commission split between themselves and the broker. It’s understandable; the way revenue is divided has a huge impact on how much money you make. Yet this isn’t the only factor that’s important. It’s not even the only issue that affects your bottom line.
Many brokers offer services, from helping agents generate leads to providing access to digital resources. If you have to build and manage your own website, that’s going to cost a lot of money. If your broker provides that service, and you just need to customize what they give you for your own needs, you’re going to save money.
It’s important to evaluate the full scope of what a broker is offering so you can identify the value of working with that individual. If your broker has a huge pool of leads to which they can connect you, but requires more of the commission than another broker, you still may find more value with a lower split because you’ll have the leads you need to drive more sales.
As you think about what you need from a brokerage firm, make sure you take some time for self-reflection. Revisit your goals and expectations now that you’ve gone through more of the licensure process.
Does anything you’ve learned change what you initially wanted from the job? Do you feel confident operating with minimal support, or do you want a mentor to help you get going? These are questions that can help you find the right broker.
On top of all this, a report from PrepAgent, an online real estate agent training school, spotlighted some practical issues to consider. One of those was to think about whether or not you want to be part of a team.
In some broker firms, agents work together under a team leader to complete sales, with the commission split based on individuals’ roles. This can be a great way to avoid feeling lonely on the job and to learn from more experienced agents, but it can also cut into your revenue.
Area of specialization was another key consideration highlighted by PrepAgent. Some agents really want to get into commercial sales. Others may dream of selling luxury mansions. Different agencies and brokers may specialize in certain fields, and connecting with them can help you get experience and make contacts in the area where you’re most interested in working.
PrepAgent also highlighted administrative support as a key issue to think about when you select a broker. Let’s face it; even in the era of digital transformation, real estate agents have a lot of documents, files, and even paperwork to tackle.
You’ll often need to connect with a wide range of stakeholders when managing a sale. The resulting clerical work of nailing down schedules, making photocopies, emailing photos to people, and otherwise managing projects can take time away from more sales-focused work.
Seeking a brokerage that offers solid administrative support, possibly even a full-time employee focused on clerical work, can be invaluable in saving you from background tasks that are critical to your business but not how you want to spend your time.
This brings us back to our analogy of searching for a job. Someone looking to get hired wants to know they’ll make a salary that’ll match their goals, be in an organization where they fit in, and have the support they’ll need to work at their best.
Whether you’re seeking a one-on-one type of relationship with a broker or looking to join a larger firm, these are all issues you’ll need to think about. It’s vital that you find the right match, or you risk creating a negative situation that hurts your long-term relationship with a potentially powerful person in your local real estate market.
Ultimately, it’s in both your and the broker’s best interest to find a good fit. Working with a broker may be mandatory, but brokers are incentivized to help agents because their ability to collect a commission from sales is dependent on whether or not the agents they supervise are actually making sales in the first place.