One of my favorite books is The Millionaire Real Estate Agent. Gary Keller talks about the importance of three things – leads, listings, and leverage.
Of course, we all know we need leads, but unfortunately some real estate agents don’t work on generating them until they suddenly have no work. That’s no way to run your business! We always encourage consistent marketing with a mix of print marketing, social media, and website outreach.
The listings focus is from the famous phrase, “You have to list to last.” Keller points out that you can make similar commissions from a listing as a buyer, but that you can manage a lot more listings per month than you can buyers. Listings also give you the chance to generate new business almost automatically because of the visibility you get.
Finally, there’s leverage. Keller advocates that a millionaire real estate agent needs to hire people who are proficient in using tools and systems to help you succeed. Leverage – using systems, tools, and staff to increase production without increasing work hours – help you multiply your income.
So does that mean that all truly successful agents should aim to become brokers? Here are some pros and cons to consider.
What Does it Take to Become a Broker?
In order to become a broker you have to be a real estate agent first for a specific period of time. The exact rules will vary from state to state. Two to four years of required experience is common.
You also have to take licensing classes and pass an exam, similar to becoming a real estate agent. What additional things will you need to know?
On top of additional information about the real estate industry, you’ll learn a lot about laws regarding agencies and contracts. This is vital if you plan to hire other real estate agents. You’ll also learn about the financial principles of running a brokerage.
The exact classes you need will vary depending on your state. However, you will gain a more in-depth understanding of the industry and what it takes to legally run a brokerage in your area.
What else do you need to do? Click here to find out!
The Benefits of Being a Broker
Wondering why you’d go through all that extra work, just to be able to hire other agents? Well, there are more benefits than that. Here are just a few.
More Income – Eventually
A lot of real estate agents are excited about becoming a broker because they feel they’ll make significantly more money. In your current brokerage, you have to either split commissions with your broker or pay desk fees.
The idea of keeping all your cash is definitely appealing, but remember that you still need an office with a desk, computer, electricity, and more. As a broker, you have to pay all of that yourself! You also have to buy insurance, and buying the “free coffee” in the office is your responsibility.
You probably won’t make a lot of extra money right away, since you have a pretty big investment to get your office going. But eventually, you’ll have the opportunity to earn a lot more, especially if you have agents under you splitting commission or paying desk fees.
The Ability to Build Your Own Culture
Being a broker is best for agents who are interested in mentoring and developing other agents. Being a lone-wolf broker is possible, but it won’t help you find nearly as much success. Plus, you’re missing out on the whole point of leverage!
If you would love the chance to create an office with a unique culture while you help other agents and associate brokers succeed, you’ll enjoy taking this step in your career.
You Can Become a Managing or Associate Broker
Want a bump in income but not really interested in going out on your own? You may still want to become a broker. As an associate broker you’ll still work in another brokerage, but your additional education and licensing means that you can often work out a better commission split.
Being a managing broker allows you to oversee and mentor other agents in an existing brokerage. You’ll get better compensation and you’ll enjoy sharing your experience with others.
You Can Start a Property Management Company
As a real estate broker, you can move into an entirely different sort of business – property management! Setting up leases and collecting rent require a broker license, so property management companies are required to have a licensed real estate broker on staff.
Being a property manager for an ownership group with several properties can be a rewarding, stable income and give you freedom along with financial peace of mind.
What No One Teaches You – Marketing
The one thing that I have to bring up – yes, partly because I’m now a marketer – is that in all of this education and licensure, there’s always something missing.
States are happy to teach you the laws and give you a license, but it’s not their job to help you succeed. If marketing is mentioned in your education at all, it will be a cursory look.
Remember as a broker you have a lot more responsibility for marketing. You won’t have a national advertising campaign behind you, and your real estate signs, flyers, and business cards won’t have a well-known logo.
As a result, if you do make the jump to becoming a broker, it’s essential to double down on your marketing efforts. Create easy-to-repeat systems where your outreach is consistent in all areas – direct mail, social media, and on your website.
Becoming a broker isn’t for everyone. There’s a lot more responsibility. However, if you want to take the plunge, be sure you master the most important part of your success – marketing!
Have you considered becoming a broker? Why or why not? Share in the comments!
This post originally shared on PrinterBees' Real Estate Marketing Magazine.