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5 Benefits of Being a Real Estate Broker vs. Agent
Being a real estate broker vs. agent has significant benefits. Though there is a lot of hard work involved and increased education, being a broker allows you to scale your career in ways that remaining a real estate agent cannot. Here are the five biggest benefits, in our estimation, to becoming a real estate broker.
Benefit 1: Real Estate Brokers Can Run Their Own Brokerage
In order to open your own real estate brokerage, you have to be a licensed broker. And once you do, there are two ways to run your own brokerage. You can either work alone and simply keep all commissions earned from your transactions, or you can recruit and hire other real estate agents or associate brokers to work under your license.
If you decide to recruit and hire other real estate agents or associate brokers to work under your license, those individuals will split their commissions with you, the designated broker. Or, if you’re running a 100% commission firm, they will pay desk fees and other fees that you designate.
If you don’t want to open your own brokerage, but are interested in mentoring and managing agents, you may be interested in a managing broker position. A managing broker oversees other agents and brokers within an existing brokerage, and is often a rewarding position for those with many years of experience to offer.
Benefit 2: Real Estate Brokers Earn a Higher Income
While having additional career options and responsibilities is great, most agents choose to become real estate brokers for a very simple reason: they can make a lot more money as brokers. Here’s a quick summary of the differences in income for real estate agents and real estate brokers from the 2017 NAR member profile report that reflects the year prior.
Benefit 3: Real Estate Brokers Have Better Commission Splits
If you don’t have an entrepreneurial streak or prefer the safety of working under another broker, then you can always work as an associate broker. While you more than likely won’t have any additional responsibilities at the brokerage, with your heightened licensure and expertise, you can usually command a higher commission split from the managing broker than most real estate agents.
Being well-versed on commission splits as you enter the market and pursue your goals is important. If you need a refresher, we offer a comprehensive guide to how real estate commission splits work. Knowing where you stand, what your options are, and what you can command will give you a leg up in your path ahead.
Benefit 4: Real Estate Brokers Can Run Property Management Companies
The ability to run a property management company is another reason to get your broker’s license. Property management companies can be thought of as a sort of middleman between the owner of the property and the tenants who occupy it. Since the investment market in rental properties is currently hot, property management can be a great additional revenue stream or a new career option.
If you do not own the property yourself, things like leasing and collecting rents are considered to be real estate activities, something that must be done under a broker’s license. By law, every property management firm must have a licensed real estate broker on staff.
Running property management companies can be a wonderful addition to your income. If you’ve ever thought about owning an investment property yourself to test the waters, we have some fantastic tips for buying your first rental property.
Benefit 5: Real Estate Brokers Have Increased Marketing Opportunities
Showcasing your expertise can help you win new clients. If you have your broker’s license, you are likely more experienced and have completed more training than many real estate agents out there. When clients are looking for future representation (either on the buying or selling side), you now have increased marketability.
Use your training and experience to your advantage when marketing to new clients. A great example of leveraging the real estate broker vs. agent differences could be to highlight your broker credentials in your listing presentation to new seller clients.