Why BUYERS AND SELLERS need a broker
Because buying or selling a home or investment property is acomplex and important financial event, most buyers and sellers want the expertise of a real estate broker or salesperson.
Real estate brokers and sales agents know the real estate market in their community. They know the neighborhoods that will fit customers’ needs and budgets. They are familiar with local zoning and tax laws and know where to obtain financing. Agents and brokers also negotiate price and terms between buyers and sellers.
Brokers list and sell real estate owned by others; they also may rent or manage properties. When selling real estate, brokers arrange for surveys, inspections, and title searches. They meet with buyers and sellers to negotiate details of the transactions.
A broker may help to arrange financing from a lender for the prospective buyer; often, this makes the difference between success and failure in closing a sale. A broker monitors each part of the transaction to a satisfactory closing. Brokers also manage their own offices, advertise properties, and handle other business matters. Some combine other types of work, such as selling insurance or practicing law, with their real estate business.
Brokers supervise sales associates, sometimes called salespersons, salesmen, saleswomen, or agents. Sales agents have many of the same job duties. Real estate agents usually are independent contractors who must work under the supervision of licensed real estate brokers. The broker pays the salesperson part of the commission earned from the sale of the property.
Brokers and sales agents must have properties to sell. Consequently, they spend much of their time obtaining listing agreements by owners to place properties for sale with the firm. When listing a property for sale, brokers and sales associates compare the listed property with similar properties for sale, or that recently sold, in order to determine a competitive market price for the property. This report is called a comparative market analysis.
Once the property is sold, the commission is first split between the brokerage firm that sold it and the firm that obtained the listing. Then, the firms split their portion of the commission with the sales agents. When a salesperson lists a property and later sells it, he or she can double the commission.
Most real estate brokers and sales associates sell residential property. A smaller number of brokers and salespersons sell commercial, industrial, agricultural, or other types of real estate. Every specialty requires knowledge of that particular type of property and clientele. Selling or leasing business property requires an understanding of leasing practices, business trends, and the location of the property.
Licensees who sell or lease industrial properties must know about the region’s transportation, utilities, and labor supply.Whatever the type of property, the agent or broker must know how to meet the client’s particular requirements.
Before showing residential properties to potential buyers, agents meet with them to get a feeling for the type of home the buyers would like. In this prequalifying phase, the agent determines how much the buyers can afford to spend. An agent or broker uses a computer connected to a multiple listing service (MLS) to generate lists of properties for sale, their location and description. In some cases, agents and brokers use computers to give buyers a virtual tour of properties in which they are interested. The buyers can view interior and exterior images or floor plans without leaving the real estate office.
Agents may meet several times with prospective buyers to discuss and visit available properties. Agents identify and emphasize the most pertinent selling points. To a young family looking for a house, they may emphasize the convenient floor plan, the area’s low crime rate, and the proximity to schools and shopping centers.To a potential investor, they may point out the tax advantages of owning a rental property and the ease of finding a renter. If bargaining over price becomes necessary, agents must follow their client’s instructions carefully and may have to present counteroffers in order to get the best possible price.
Once both parties have signed the contract, the real estate broker or agent must make sure that all terms of the contract are met before the closing date. For example, the agent must make sure that the agreed-upon inspections, including that of the home and termite and radon inspections, take place. Also, if the seller agrees to any repairs, the broker or agent must see that they are made. Increasingly, brokers and agents are handling environmental problems as well, by making sure that the properties they sell meet environmental regulations. For example, they may be responsible for dealing with lead paint on the walls. While loan officers,attorneys, or other persons handle many details, the agent must ensure that they are completed.
Many real estate brokers and sales agents work out of their homes instead of real estate offices. They spend much of their time away from their desks showing properties to customers, analyzing properties for sale, meeting with prospective clients, or researching the state of the market.
Agents and brokers often work more than a standard 40-hour week.They usually work evenings and weekends and are always on call to suit the needs of customers. Although the hours are long and frequently irregular, most agents and brokers have the freedom to determine their own schedule. Consequently, they can arrange their work so that they can have time off when they want it.
Employment for Florida brokers and Salespersons
Currently, there are 224,000 brokers and sales associates licensed in Florida. Of that number, 170,000 have an active license. Many have an inactive license, but maintain the license by taking continuing education and renewing every two years. Many sales agents work part time, combining their real estate activities with other careers. Almost 6 out of 10 real estate agents and brokers are self-employed. Real estate is sold in all areas, but employment is concentrated in large urban areas and in smaller, but rapidly growing communities.
Most real estate firms are relatively small; indeed, some are one-person businesses. By contrast, some large real estate firms have several hundred agents operating out of numerous branch offices. Many brokers purchase franchises from national or regionalreal estate organizations. Under this type of arrangement, the broker pays a fee in exchange for the privilege of using the more widely known name of the parent organization. Examples of franchises include Century 21, Coldwell Banker, and ERA. Although franchised brokers often receive help in training sales staff and running their offices, they bear the ultimate responsibility for the success or failure of their firms.
Real estate brokers and sales agents are older, on average, than most other workers. Historically, many homemakers and retired persons were attracted to real estate sales by the flexible and part-time work schedules characteristic of the field. These individuals could enter, leave, and later reenter the occupation,depending on the strength of the real estate market, their family responsibilities, or other personal circumstances. Recently, however, the attractiveness of part-time real estate work has declined, as increasingly complex legal and technological requirements are raising startup costs associated with becoming an agent.
Training, Qualifications, and Advancement
Real estate brokers and sales agents must have a license. Prospective Florida real estate brokers and sales associates must be high school graduates, at least 18 years old, and pass a100-question examination. The examination is more comprehensive for brokers than for agents includes questions on basic real estate transactions and laws affecting the sale of property.
Candidates for the Florida sales associate license must complete a 63-hour prelicense course. Persons seeking a Florida broker license must have at least one year experience under a broker in any state or country, pass the 72-hour broker prelicense course, and pass the Florida broker exam. Broker candidates must have completed the Florida sales associate postlicense course.
The sales associate prelicense course and the broker prelicense course may be taken in the classroom, or online. The Florida sales associate classroom course and the Florida broker classroom course require that the student miss no more than eight hours of instruction.
The Florida sales associate online course and the Florida broker online course allow students to access the course on the Internet from any location with a connection. The online broker course and the online sales course must be approved by the Florida Real Estate Commission before a school may offer them.
TAKING THE FLORIDA REAL ESTATE COURSEONLINE
Online real estate courses are an ideal way to complete the required education if a student cannot find a convenient classroom schedule, or if commuting distance is a problem. The quality of instruction is uniform because the course is not instructor-driven (some classroom instructors tell war stories and don’t cover the material well).
The online real estate course is an interactive active course. The student must do interactive exercises and demonstrate mastery of the material before moving to the next subject.
The Florida online real estate course does not require a student to spend 63 hours of “face time” at the computer. A student can move quickly through the course by showing mastery of the subject material. The final examination is timed, but not monitored.
Florida real estate licenses must be renewed every 2 years. The first renewal of the license requires that a salesperson take the 45-hour sales associate postlicense course. The salesperson postlicense course is a real estate course that gives the licensee practical information on how to do his or her job. Students may take the course in the classroom or online.
When students take the 45-hour sales associate postlicensing classroom course, the student may miss no more than ten percent of the required hours. There is a 100-question final examination, but no state exam.
ADVANTAGES IN TAKING THE FLORIDA POSTLICENSE COURSEONLINE
The online Florida sales associate postlicense course and the online Florida broker postlicense course are an ideal way to complete the required education if a student cannot find a convenient classroom schedule, or if commuting distance is a problem. The quality of instruction is uniform because the course is not instructor-driven (some instructors tell war stories and don’t cover the material well).
The online real estate course is an active course, and the student must do interactive exercises and demonstrate mastery of the material before moving to the next subject.
The Florida online postlicense course does not require a student to complete the full amount of hours of “face time” at the computer. A student can move through the course by showing mastery of the subject material. The final examination is timed, but not monitored.
FLORIDA REAL ESTATE CONTINUING EDUCATION
After the first license renewal, Florida real estate salespersons and brokers must complete 14 hours of continuing education before each two-year renewal. The course may be taken in the classroom, by correspondence, or online.
As real estate transactions have become more complex, many firms have turned to college graduates to fill positions. A large number of agents and brokers have some college training. College courses in real estate, finance, business administration, statistics ,economics, law, and English are helpful. For those who intend to start their own company, business courses such as marketing and accounting are as important as those in real estate or finance.
Personality traits are equally as important as academic background. Brokers look for applicants who possess a pleasant personality, are honest, and present a neat appearance. Maturity, tact, trustworthiness, and enthusiasm for the job are required in order to motivate prospective customers in this highly competitive field. Agents should be well organized, be detail oriented, and have a good memory for names, faces, and business particulars.
Those interested in jobs as real estate agents often begin in their own communities. Their knowledge of local neighborhoods is a clear advantage. Under the direction of an experienced broker, beginners learn the practical aspects of the job, including the use of computers to locate or list available properties and identify sources of financing.
Many firms offer formal training programs for both beginners and experienced agents. Larger firms usually offer more extensive programs than smaller firms. More than a thousand universities, colleges, and junior colleges offer courses in real estate. At some, a student can earn an associate’s or bachelor’s degree with a major in real estate; several offer advanced degrees. Many local real estate associations that are members of the National Association of Realtors sponsor courses covering the fundamentals and legal aspects of the field. Advanced courses in mortgage financing, property development and management, and other subjects also are available through various affiliates of the National Association of Realtors.
Advancement opportunities for agents may take the form of higher rates of commission. As agents gain knowledge and expertise, they become more efficient in closing a greater number of transactions and increase their earnings. In many large firms, experienced agents can advance to sales manager or general manager. Persons who have received their broker’s license may open their own offices. Others with experience and training in estimating property value may become real estate appraisers, and people familiar with operating and maintaining rental properties may become property managers. Experienced agents and brokers with a thorough knowledge of business conditions and property values in their localities may enter mortgage financing or real estate investment counseling.
The median annual earnings of real estate sales associates was $43,370 in May 2015. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $21,780, and the highest 10 percent earned more than $110,560.
The median annual earnings of real estate brokers was $56,860 in May 2015. The lowest 10 percent earned less than $23,400, and the highest 10 percent earned more than $166,940.
Commissions on sales are the main source of earnings of real estate agents and brokers. The rate of commission varies according to whatever the agent and broker agree on, the type of property, and its value. The percentage paid on the sale of farm and commercial properties or unimproved land usually is higher than the percentage paid for selling a home.
Commissions may be divided among several agents and brokers. The broker or agent who obtained the listing usually shares their commission when the property is sold with the broker or agent who made the sale, and also with the firm that employs them. Although an agent’s share varies greatly from one firm to another, often it is about half of the total amount received by the firm. Agents who both list and sell a property maximize their commission.
Income usually increases as an agent gains experience, but individual ability, economic conditions, and the type and location of the property also affect earnings. Sales associates who are active in community organizations and in local real estate associations can broaden their contacts and increase their earnings. A beginner’s earnings often are irregular, because a few weeks or even months may go by without a sale. Although some brokers allow an agent to draw against future earnings from a special account, the practice is not common with new agents. The beginner, therefore, should have enough money to live for about 6 months or until commissions increase.
[Part of this information was adapted from information provided by the United States Bureau of Labor Statistics]