The real estate industry continues to grow and thrive. For each transaction, both buyer and seller have a representative that works on the negotiations, legal work and closing. These representatives are compensated well, especially for larger transactions that are more complex and have a smaller market of people. There are two main types of representatives including a real estate agent and a real estate broker. Each of these jobs have different licensing requirements and responsibilities. However, they share the same fundamental goal of completing as many property sales as possible.
Real Estate Agent
Real estate agents are licensed to sell homes and take a commission percentage from the sale. They have to fulfill all of the standard tasks including helping market the property (or represent the buyer), advertising, dealing with inquiries and negotiating the sale. They must work on the closing documents, the title transfer and the trust account. However, the agent does not work for themselves. They work in an agency in an employee capacity and follow the instruction of the real estate broker that they work for. Ultimately, the broker has final say on how to market the property, negotiate and close the deal. For that reason, many real estate agents seek to graduate to the broker level.
Real Estate Broker
In comparison, a licensed real estate broker is someone with much more autonomy, risk and potential income. The real estate broker may act on their own outside of a larger real estate brokerage firm. They can be their own boss with their own marketing, own clients and own office administration. Best of all, the real estate broker gets all of the income from each transaction. Brokers actually have a team of agents working for them. On the other hand, nobody is paying them a salary and they have to bare the costs of running their firm before they know what the yearly income will be. While many agents become brokers, not all work in their own agency. Some choose continue to work in an agency but give themselves a promotion with a higher share of the commission and greater self-direction, yet still part of a larger team. However, people that can develop their own client base generally prefer to become brokers.
What do I need to become an estate agent?
To become a real estate agent, there are several requirements that need to be followed. Real estate agents requirements include are different for each state but generally have similar guidelines. Firstly, the person must have a high school degree or equivalent, be 18 and a US permanent resident. The next step is to take the necessary number of course study hours. it is different for each state. In New York, people must study for at least 75 hours in a pre-approved training program before they can move on to the next stage. Topics in the study guide include the real estate market, banking and finance, taxes, title transfer, legal issues, government regulations, ethics and construction among other topics. Finally, all of the knowledge is put to the test with a test. After the two to three hour test the final step is to complete on the registration documents and pay the fee. Once complete, you receive an official certificate and are an official real estate agent.
Requirements for real estate broker
Brokers need an additional level of knowledge to get to the next level. They also have slightly higher requirements. Brokers also have to have a high school degree and must be at least 20 years old. Brokers need at least two years of experience on the job as an agent. They also need additional course time to study for another exam. In New York, brokers need to study an additional 50 hours in a pre-approved program. The topics are similar to the test for the agent license but are more detailed and have a higher level of proficiency. While the requirements for real estate broker are higher, the payoff is also potentially much greater as the broker earns all of the commission for themselves.
Overall, the real estate market continues to grow and expand. As the brokers and agents complete more sales, the commissions go up and up. While the requirements are fairly stringent, with a little dedication most anyone with the right attitude can accomplish the task in a couple months.