There are three types of professionals who operate in the real estate markets to sell property on commission. These are salesperson, licensed brokers and realtors. There is a subtle difference between the three, but on the whole, it can be said that a broker is a more credited and recognized professional, as the real estate broker license is granted by the Department of Real Estate or the Department of Licenses of the said state.
A license is granted only after an applicant goes through a certain coursework and a licensing exam. In the following paragraphs a brief overview of the licensing exam course work and the advantages of taking up the licensing procedure has been described.
Getting the License
The United States being a Federal system, the affairs that are related to real estates come under the jurisdiction of the state governments. All the state governments have a Department of Real Estate, that governs all issues relating to real estate.
Thus, in case, if you are interested in real estate as a career prospect, you can visit the official websites of the said departments. The broker license is of course, governed by these departments. The conception of license was introduced in order to cater to the governance of the real estate markets, sales and purchases.
From the governance point of view, the big problem with real estate investments is that the area of land that is in existence is limited whereas the population is ever-increasing. Thus the need or demand for land is always on the rise, whereas, the availability tends to be limited. This has of course led to prices shoot up and remain high. Such conditions have increased the complexity of the real estate market, which has prompted governments to introduce authorization for real estate professionals.
Since state governments control the licensing procedures and governance, you will have licenses that will differ as per states, such as California broker license, New York broker license. Though some specified applicant requirements differ from state to state, there are some general and common requisites that need to be fulfilled to become a licensed real estate broker:
- The primary requirement is that the broker needs to be an adult (at least 18 years of age) and should be a citizen of United States and a resident of the said state, though some states allow out-of-state applicants.
- Most of the states require from the candidates to have at least 2 years of experience of real estate transactions within preceding 5 years.
- Applicants need to complete 8 statuary courses which generally include, Advanced Legal Aspects of Real Estate, Advanced Real Estate Finance, Advanced Real Estate Appraisal, Business Law, Computer Applications in Real Estate, Common Interest Developments, Escrow, Legal Aspects of Real Estate, Mortgage Loan Brokering and Lending, Real Estate Practice, Real Estate Finance, Real Estate Appraisal, Real Estate Economics or Accounting, Real Estate Principles, Property Management and Real Estate Office Administration. In some states a classroom coursework worth 30 to 90 hours is also required.
- In some states, real estate attorneys or certain college graduates with related degrees are granted exemptions in the coursework.
- In certain cases, the coursework is divided into groups or semesters, and the classroom coursework is to be taken up at certain credited institutes of higher learning.
There are a considerable number of advantages of taking up the broker license. For example a licensed broker is authorized to prepare contracts and leases, do residential appraisals, prepare certain sales documents, do a comparative market analysis, charge customers on an hourly basis and also hire sub-brokers, realtors and salesperson. Basically, a license gives you more recognition when you conduct a real estate deal or real estate negotiations.
The basic advantage of the license is a genuine recognition in the real estate market, not to mention a really good real estate broker salary. Note that the coursework that is involved in obtaining a broker’s license is not exactly simple, and a lot of hard work has to be put into the coursework in order to clear the exam.