Why You Should Become a Real Estate Broker

Do you love helping people find their dream homes or business properties as a licensed real estate salesperson (or agent), but you’re looking for more opportunities for growth? It’s time you considered becoming a real estate broker.

What Is a Real Estate Broker?

A broker is a real estate salesperson who undergoes additional training and earns a real estate broker license. Like real estate agents, brokers help customers buy and sell property — but with added responsibility. Brokers also make sure all transactions are compliant with state and federal regulations.

Generally, there are three types of broker titles: associate, managing, and principal.

  • Associate brokers work under another broker and don’t supervise other real estate salespeople.
  • Managing brokers typically run the day-to-day operations in a real estate business, like hiring and training new salespeople.
  • Principal brokers supervise all salespeople working under them to make sure transactions follow state and federal real estate law.

Benefits of Becoming a Real Estate Broker

Real estate salespeople and brokers share many responsibilities, but brokers enjoy extra perks that make it a great upward career path for any real estate professional. Here are just a few benefits that come with earning your real estate broker license.

Business Ownership and Increased Earning Potential

Unlike real estate salespersons, brokers can work independently without splitting the commission. Brokers who decide to start their own real estate business can hire other real estate salespersons to work under them, and they earn partial commission on any sales their agents close.

Opportunity to Build New Skills

In the competitive real estate market, getting a broker license is only the first step in increasing your earning potential. To keep up with the competition and changing regulations, brokers are constantly learning new skills, from social media marketing to business and legal information that you can apply to other areas of your life.

Expanded Professional Network        

Because of brokers’ increased responsibilities, they often work with people from a wide variety of backgrounds. This can include real estate salespeople, buyers, bank officials, and other professionals. A larger professional network can also mean increased business opportunities!

How to Obtain a Michigan Real Estate Broker License

1. Meet State Requirements

In Michigan, real estate professionals must meet the following requirements before applying for a broker license:

  • Be at least 18 years old
  • Vouch for your “good moral character,” which includes confirming no history of convictions for embezzlement or misappropriation of funds
  • Have at least three years of full-time real estate business experience
  • Maintain a Michigan business address

2. Complete Pre-License Education

Broker applicants in Michigan must complete 90 hours of pre-license education including nine hours of civil rights law and equal opportunity in housing. Save time and money on this process with our complete Michigan Broker Pre-Licensure Package. It includes all 90 hours of required course material presented as online video lectures, so you can complete your education at your own pace. Plus, the complete package includes a practice exam!

3. Pass the Real Estate Broker License Exam

All broker applicants must pass the real estate broker exam administered by PSI Services, LLC. Our 400-question practice exam covers all topics on the exam to help ensure you pass on your first try!

Get Your Michigan Real Estate Broker License

Whether you want to become your own boss, build a robust network of like-minded professionals, or increase your earning potential, obtaining a Michigan real estate broker license will only add value to your real estate career.

View all of our online broker course options to get started.

Why You Should Upgrade to A Michigan Broker License

If you are currently working as a real estate salesperson I have one question for you, why haven’t you upgraded to a broker license? Brokers make more money and have more freedom to create their own schedules. While you must be licensed as a salesperson for three years before applying for a broker license, it is never too early to get started on your 90-hour prelicense program. Below are a few common questions and answers about obtaining a broker license.

Question 1: Why should I become a broker?

  • Be your own boss. As a salesperson, you work for a licensed broker. Getting a broker license means you can open your own practice and work alone or hire a team of salespeople to work under you. If you choose to work alone you can keep all of your commissions. If you choose to hire salespeople you can either keep a portion of their commissions or you can charge a variety of fees and allow your salespeople to keep all of their commission.
  • Make an average of $23,000 more per year. Brokers make more money whether they’re working with salespeople or not. Between keeping their entire commission and receiving a cut of their salespeople’s commission or yearly fees, they make an average of $23,000 more per year.
  • Increase your marketability. Individuals buying and selling high priced homes often prefer working with a broker. Brokers have a reputation for being industry experts with a strong dedication to the industry. As we all know, the higher the home price, the higher the commission!
  • Run your own property management company. Property management companies work as a middleman between tenants and property owners. Since the rental industry is hot right now, the ability to run a property management company is a big benefit.

Question 2: Why should I upgrade my license when the market is expected to decline?

Most experts are predicting a drop off in real estate sales over the next few years. Lucky for you, Michigan is expected to be exempt from the rest of the nation’s decline.

Several sources believe Michigan’s real estate market will continue to grow even as rising mortgage rates slow the market for sellers in other areas of the country. Home prices in Grand Rapids are forecast to grow at 8.2%, the largest home price increase in the nation. In fact, real estate resources nationwide are encouraging investment in Grand Rapids and the city comes in second for the hottest real estate markets for millennials.

Grand Rapids isn’t the only area of Michigan experiencing growth. Numbers recently released by Detroit Mayor Mike Duggan’s office show residential property values have increased by an average 12% in more than 90% of Detroit neighborhoods. The rest of the state is expected to experience continually growing housing prices but a declining number of homes on the market. While this may sound like bad news initially, growing home prices mean higher commission rates which can make up for the lower volume of sales.

In other words, while the rest of the country is preparing for a decreasing real estate market, Michigan can expect to see continued growth in urban areas and stable growth in the rural north. Additionally, even if the Michigan real estate market drops off after a few years, brokers are uniquely positioned to continue making a steady income since they receive a cut from all salespersons commissions.

Question 3: How do I get started?

  1. Complete 90 hours of approved real estate coursework within 36 months of application, unless licensed continuously.
    Note: if you have been a practicing attorney for 5 or more years you only need to take 30hrs to become a licensed broker.

  2. Submit your real estate license application by visiting Michigan’s Department of Licensing and Regulatory Affairs (LARA). Once there, you can create an account, pay all fees, and apply for your broker license. *NOTE – Michigan is no longer accepting paper license applications, so you must use the LARA online portal!

Here is a step-by-step guide provided by LARA.

Licensing Resources

Should You Get A Real Estate License?

Step-by-Step Guide to Becoming a Real Estate Salesperson