Posted by: Kaplan Real Estate Education
Published: August 8, 2019
Running your own business, flexible hours, more money-making opportunities... all of these sound like great career perks. But is a job as a real estate broker right for you? Many real estate agents set goals to become real estate brokers one day, but it’s not for everyone. Maybe you’re happy with your workload as a real estate agent or you enjoy the structure that your current brokerage provides you. To make your decision easier, we’ve compiled a list of pros and cons of pursuing a career as a real estate broker.
1. Becoming a real estate broker is a logical next step.
Pros: If you’re already a real estate agent, the requirements to earn your broker license are relatively quick and painless. For example, in California, you need a minimum of two years full-time licensed real estate salesperson experience in the last five years, meaning that you could become a broker two years after becoming a real estate agent.
The requirements to earn a broker license in many states are similar to the requirements for an agent license. You must take a certain amount of prelicensing education and pass an exam. Earning a broker license is a quick and logical next career move for many real estate agents.
Cons: Your first couple years as a real estate agent will be a period of adjustment and learning while you get used to your new schedule, job duties, and brokerage. You may not have the time, money, or energy needed to pursue a broker license. When taking into account your family life and other outside commitments, becoming a broker might just not make sense for you right now.
2. Real estate brokers have complete career autonomy.
Pros: As a broker, you can own your own real estate business. With a strong work ethic and positive outlook, your brokerage could flourish into a well-respected establishment in your community. You might want to hire many real estate agents, or just a select few. Your role could be mostly managerial, or you could decide to focus on selling property. The choice is up to you.
Cons: Real estate brokers have more responsibilities to uphold, including marketing, hiring and retaining valuable agents, and ensuring that laws are being followed. Real estate agents experience these responsibilities to a certain extent, but this pressure is on a larger scale for brokers. Not everyone wants the extra pressure of having increased responsibilities, regardless of the potential.
3. Real estate brokers can earn more money.
Pros: As a real estate broker, you will earn a percentage of your real estate agents’ commission, in addition to any revenue you bring in from selling properties yourself. Since you’re working for your own business, you can take home your entire commission. If you’ve hired a few real estate agents and you’re still selling properties yourself, you could potentially take home double or triple of what you used to make as an agent.
Cons: There may be a lot of upfront costs when opening your own brokerage, including rent for your office space and increased marketing spend. Much of what you make in your first couple years as a real estate agent may need to be invested back into your brokerage in order to initially bolster your business. Having some savings set aside for the purpose of opening your own brokerage is essential in order to get your business off the ground.
4. Brokers can work as little or as much as they want.
Pros: Since you are your own boss, you can decide to work as little or as much as you want. The amount of new responsibilities you take on is entirely up to you. You could open your brokerage and operate as the only employee, eliminating the need to oversee real estate agents. Conversely, you could hire multiple agents, expand your business, and take on many new responsibilities. Regardless of your plans, becoming a real estate broker can enable you to have greater control over the type of work you do and how much time you spend on it.
Cons: Typically, the less effort you put in, the less success you have. If you decide to take a step back and work less, you will probably see this reflected in the amount of money you take home. You’ll most likely need to invest more time and effort in the initial stages of launching your business, and you could set yourself up for failure later if you decide to slack off during this time. Finding a balance in terms of time and energy spent on your business can be a challenge for new real estate brokers.
5. Brokers can help real estate agents learn the industry.
Pros: New real estate agents often start their careers looking for guidance from the brokers and other agents that they work with. You have a chance to pass on the tips and advice you’ve picked up during your time as an agent and broker. Many brokers enjoy taking on a mentor role in the lives of their agents.
Cons: Mentoring others can take a lot of time and mental energy, especially if you have multiple real estate agents all looking for your advice. The situation could quickly grow from offering occasional tips to regularly weighing in on very specific situations, which can be overly time consuming.
Becoming a real estate broker is the long-term goal of many agents for a reason. There are pros and cons of taking this career path, but ultimately it’s up to you to decide if pursuing your broker license makes sense when evaluating your future goals. You may envision more money, opportunities, and career control and whereas another person might see more stress, responsibilities, and chaos. If you’re curious about your state’s requirements to earn a broker’s license, start out by finding your state from this list.