Real Estate Professional FAQs
How do real estate brokers make money?
When a real estate transaction is complete, the buyer’s and seller’s agents receive a commission, typically 6%, of the purchase price. The agents each receive half the real estate commission. Then, they split that commission again with their respective brokers. A common split is a 70/30 split, meaning the agent gets 70% and the broker gets 30% of the 3% commission.
According to Indeed, real estate brokers across the country average a salary of $68,256. On average, commissions earn them an additional $42,000 per year, bringing their annual income to over $110,000. Of course, a broker’s income also depends on the kind of real estate they handle. Residential, commercial and investment real estate have differing transaction rates and commissions.
How long does it take to become a real estate professional?
To become a real estate professional, you must fulfill your state’s guidelines. While you do not need a bachelor’s degree, you must complete real estate courses and pass your state’s licensing exam.
The exact timeline to become a real estate professional varies by state. For example, in California, you must pass three real estate-related classes, with each class being 45 hours apiece. Alternatively, in Florida, candidates must complete 63 hours of education. On top of education, to become a broker you may need a certain number of years of experience.
Additionally, to keep your real estate license, you must complete a certain number of hours of continuing education according to your state’s laws. Most states require real estate professionals to renew their license every 2 years.
How do I know if I should hire a broker or real estate agent?
Real estate brokers have a unique depth of legal knowledge pertaining to real estate transactions. In addition, their level of experience will help streamline the purchase or sale of a property.
However, you access a broker’s expertise through your real estate agent because every agent works under a broker. Brokers review and certify every transaction conducted by each of their agents. Therefore, when you hire a real estate agent, you also get the support of a broker working in the background to ensure you receive excellent service. Additionally, the brokerage will confirm that your real estate transaction follows all relevant laws.
Because real estate transactions are complex, hiring a real estate professional when buying or selling property is recommended. Conversely, buying a house without an agent can be challenging and costly.
Where can I find the right real estate broker?
There are likely many real estate professionals available in your area. However, finding a good real estate broker or professional often requires effort. You may get a solid recommendation from family and friends, or you can conduct your own search.
Regardless, it’s ideal to find a broker with the following qualities:
- Focuses on your needs. Your criteria for your home should be your agent’s top priority. Additionally, if you’re a first-time homebuyer, your agent should thoroughly walk you through the process. If you feel rushed by your agent, it may be a sign to seek out someone else.
- Communicates clearly and frequently. Buying or selling a home can be emotionally and logistically challenging. Therefore, your agent should be a good communicator, as they provide with you knowledge and encouragement throughout the process. Additionally, since they negotiate for you, it’s vital that they communicate in a professional, straightforward, and prompt manner.
- Works with integrity. An agent who misleads you about the chances of a seller accepting your offer or whether your asking price fits the market you’re in can damage your ability to make the right moves. An effective agent will be honest with you and uphold your best interests.
- Is swift to address problems. Whether an appraisal comes back in an unexpected amount, or your final walkthrough reveals previously undiscovered problems, your real estate agent should think on their feet and waste no time trying to resolve any issues you encounter.
- Stays up to date on the market. An excellent real estate agent will have vast knowledge of the market and work hard to stay informed. In the post-pandemic world, this is more crucial than ever. If your agent doesn’t seem familiar with the housing market trends of 2022, you may want to find a different agent.
- Is comfortable using technology. While showings and open houses are practical tools, real estate has moved online in significant ways. For example, your agent should be familiar with Zillow and 3D tours. A tech-savvy agent can expedite your trip to closing day.
- Is detail-oriented. From the amount of paperwork a buyer needs to submit for a mortgage approval to understanding if the home you’re looking at is in a flood zone, getting a handle on every detail is crucial. Your agent should be able to gather all the facts for you and leave no stone unturned.
- Displays empathy. Buying or selling a home can be exciting, stressful and strenuous. An agent who can share your joy on closing day and empathize with you if a deal falls through can be a great source of strength and encouragement.