Real Estate Brokers and Sales Associates
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 wantthe expertise of a real estate broker or salesperson.
Real estate brokers and sales agents know the real estate market intheir community. They know the neighborhoods that will fitcustomers' needs and budgets. They are familiar with local zoningand tax laws and know where to obtain financing. Agents and brokersalso negotiate price and terms between buyers and sellers.
Brokers list and sell real estate owned by others; they also mayrent or manage properties. When selling real estate, brokersarrange for surveys, inspections, and title searches. They meetwith buyers and sellers to negotiate details of thetransactions.
A broker may help to arrange financing from a lender for theprospective buyer; often, this makes the difference between successand failure in closing a sale. A broker monitors each part of thetransaction to a satisfactory closing. Brokers also manage theirown offices, advertise properties, and handle other businessmatters. Some combine other types of work, such as sellinginsurance or practicing law, with their real estatebusiness.
Brokers supervise sales associates, sometimes called salespersons,salesmen, saleswomen, or agents. Sales agents have many of the samejob duties. Real estate agents usually are independent contractorswho must work under the supervision of licensed real estatebrokers. The broker pays the salesperson part of the commissionearned from the sale of the property.
Brokers and sales agents must have properties to sell.Consequently, they spend much of their time obtaininglistings'agreements by owners to place properties for sale withthe firm. When listing a property for sale, brokers and salesassociates compare the listed property with similar properties forsale, or that recently sold, in order to determine a competitivemarket price for the property. This report is called a comparativemarket analysis.
Once the property is sold, the commission is first split betweenthe brokerage firm that sold it and the firm that obtained thelisting. Then, the firms split their portion of the commission withthe sales agents. When a salesperson lists a property and latersells it, her or she can double the commission.
Most real estate brokers and sales associates sell residentialproperty. A smaller number of brokers and salespersons sellcommercial, industrial, agricultural, or other types of realestate. Every specialty requires knowledge of that particular typeof property and clientele. Selling or leasing business propertyrequires an understanding of leasing practices, business trends,and the location of the property.
Licensees who sell or lease industrial properties must know aboutthe region's transportation, utilities, and labor supply.Whatever the type of property, the agent or broker must know how tomeet the client's particular requirements.
Before showing residential properties to potential buyers, agentsmeet with them to get a feeling for the type of home the buyerswould like. In this prequalifying phase, the agent determines howmuch the buyers can afford to spend. An agent or broker uses acomputer connected to a multiple listing service (MLS) to generatelists of properties for sale, their location and description. Insome cases, agents and brokers use computers to give buyers avirtual tour of properties in which they are interested. The buyerscan view interior and exterior images or floor plans withoutleaving the real estate office.
Agents may meet several times with prospective buyers to discussand visit available properties. Agents identify and emphasize themost pertinent selling points. To a young family looking for ahouse, they may emphasize the convenient floor plan, the area'slow crime rate, and the proximity to schools and shopping centers.To a potential investor, they may point out the tax advantages ofowning a rental property and the ease of finding a renter. Ifbargaining over price becomes necessary, agents must follow theirclient's instructions carefully and may have to presentcounteroffers in order to get the best possible price.
Once both parties have signed the contract, the real estate brokeror agent must make sure that all terms of the contract are metbefore the closing date. For example, the agent must make sure thatthe agreed-upon inspections, including that of the home and termiteand radon inspections, take place. Also, if the seller agrees toany repairs, the broker or agent must see that they are made.Increasingly, brokers and agents are handling environmentalproblems as well, by making sure that the properties they sell meetenvironmental regulations. For example, they may be responsible fordealing with lead paint on the walls. While loan officers,attorneys, or other persons handle many details, the agent mustensure that they are completed.
Many real estate brokers and sales agents work out of their homesinstead of real estate offices. They spend much of their time awayfrom their desks'showing properties to customers, analyzingproperties for sale, meeting with prospective clients, orresearching 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 tosuit the needs of customers. Although the hours are long andfrequently irregular, most agents and brokers have the freedom todetermine their own schedule. Consequently, they can arrange theirwork so that they can have time off when they want it.
Employment for Florida brokers andsalespersons
Currently, there are 224,000 brokers and sales associates licensedin Florida. Of that number, 170,000 have an active license. Manyhave an inactive license, but maintain the license by takingcontinuing education and renewing every two years. Many salesagents work part time, combining their real estate activities withother careers. Almost 6 out of 10 real estate agents and brokersare self-employed. Real estate is sold in all areas, but employmentis concentrated in large urban areas and in smaller, but rapidlygrowing communities.
Most real estate firms are relatively small; indeed, some areone-person businesses. By contrast, some large real estate firmshave several hundred agents operating out of numerous branchoffices. Many brokers purchase franchises from national or regionalreal estate organizations. Under this type of arrangement, thebroker pays a fee in exchange for the privilege of using the morewidely known name of the parent organization. Examples offranchises include Century 21, Coldwell Banker, and ERA. Althoughfranchised brokers often receive help in training sales staff andrunning their offices, they bear the ultimate responsibility forthe success or failure of their firms.
Real estate brokers and sales agents are older, on average, thanmost other workers. Historically, many homemakers and retiredpersons were attracted to real estate sales by the flexible andpart-time work schedules characteristic of the field. Theseindividuals could enter, leave, and later reenter the occupation,depending on the strength of the real estate market, their familyresponsibilities, or other personal circumstances. Recently,however, the attractiveness of part-time real estate work hasdeclined, as increasingly complex legal and technologicalrequirements are raising startup costs associated with becoming anagent.
Training, Qualifications, and Advancement
Real estate brokers and sales agents must have a license.Prospective Florida real estate brokers and sales associates mustbe high school graduates, at least 18 years old, and pass a100-question examination. The examination'more comprehensive forbrokers than for agents'includes questions on basic real estatetransactions and laws affecting the sale of property.
Candidates for the Florida sales associate license must complete a63-hour prelicense course. Persons seeking a Florida broker licensemust have at least one year experience under a broker in any stateor country, pass the 72-hour broker prelicense course, and pass theFlorida broker exam. Broker candidates must have completed theFlorida sales associate postlicense course.
The sales associate prelicense course and the broker prelicensecourse may be taken in the classroom,online, oron CD-ROM. The Florida sales associate classroom course and theFlorida brokerclassroom course require that the student miss no more thaneight hours of instruction.
The Florida broker online course allow students to access thecourse on the Internet from any location with a connection. Theonline broker course and the online sales course must be approvedby the Florida Real Estate Commission before a school may offerthem.
TAKING THE FLORIDA REAL ESTATE COURSEONLINE
Online real estate courses are an ideal way to complete therequired education if a student cannot find a convenient classroomschedule, or if commuting distance is a problem. The quality ofinstruction is uniform because the course is not instructor-driven(some instructors tell war stories and don't cover the materialwell).
The online real estate course is an interactive active course. Thestudent must do interactive exercises and demonstrate mastery ofthe material before moving to the next subject.
The Florida online real estate course does not require a student tospend 63 hours of “face time” at the computer. Astudent can move quickly through the course by showing mastery ofthe subject material. The final examination is timed, but notmonitored.
TAKING AN REAL ESTATE COURSE BY CD-ROM
The Florida real estate sales course or broker course might betaken by CD-Rom if the student has a very slow Internet connectionwith frequent disconnects. It is also recommended if the studentworks on one computer exclusively; or travels extensively andbrings his or her laptop The student would buy the CD-Rom salesassociate course or the CD-Rom broker course, install in on his orher computer and take the entire course without being connected tothe Internet, except for the final examination. At the end of thecourse, the student would take the final exam on the computer, andthen upload the answers for instant grading.
The CD-Rom course requires that the student complete the course andspend the full amount of hours on the course.
Florida real estate licenses must be renewed every 2 years. Thefirst renewal of the license requires that a salesperson take the45-hour sales associate postlicense course. The salespersonpostlicense course is a real estate course that gives the licenseepractical information on how to do his or her job. Students maytake the course in the classroom, online, or by CD-Rom.
When students take the 45-hour sales associate postlicensingclassroom course, the student may miss no more than ten percent ofthe required hours. There is a 100-question final examination, butno state exam.
ADVANTAGES IN TAKING THE FLORIDA POSTLICENSE COURSEONLINE
The online Florida sales associate postlicense course and theonline Florida broker postlicense course are an ideal way tocomplete the required education if a student cannot find aconvenient classroom schedule, or if commuting distance is aproblem. The quality of instruction is uniform because the courseis not instructor-driven (some instructors tell war stories anddon't cover the material well).
The online real estate course is an active course, and the studentmust do interactive exercises and demonstrate mastery of thematerial before moving to the next subject.
The Florida online postlicense course does not require a student tothe full amount of hours of “face time” at thecomputer. A student can move through the course by showing masteryof the subject material. The final examination is timed, but notmonitored.
ADVANTAGES TO TAKING THE FLORIDA POSTLICENSE COURSE BYCD-ROM
The Florida real estate sales associate postlicense course orFlorida real estate broker postlicense course might be taken byCD-Rom if the student has a very slow Internet connection withfrequent disconnects. It is also recommended if the student workson one computer exclusively; or travels extensively and brings hisor her laptop The student would buy the CD-Rom sales associatecourse or the CD-Rom broker course, install in on his or hercomputer and take the entire course without being connected to theInternet, except for the final examination. At the end of thecourse, the student would take the final exam on the computer, andthen upload the answers for instant grading.
The CD-Rom course requires that the student complete the course andspend the full amount of hours on the course.
FLORIDA REAL ESTATE CONTINUING EDUCATION
After the first license renewal, Florida real estate salespersonsand brokers must complete 14 hours of continuing education before each two-year renewal. The coursemay be taken in the classroom, by correspondence, oronline.
As real estate transactions have become more complex, many firmshave turned to college graduates to fill positions. A large numberof agents and brokers have some college training. College coursesin real estate, finance, business administration, statistics,economics, law, and English are helpful. For those who intend tostart their own company, business courses such as marketing andaccounting 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, arehonest, and present a neat appearance. Maturity, tact,trustworthiness, and enthusiasm for the job are required in orderto motivate prospective customers in this highly competitive field.Agents should be well organized, be detail oriented, and have agood memory for names, faces, and business particulars.
Those interested in jobs as real estate agents often begin in theirown communities. Their knowledge of local neighborhoods is a clearadvantage. Under the direction of an experienced agent, beginnerslearn the practical aspects of the job, including the use ofcomputers to locate or list available properties and identifysources of financing.
Many firms offer formal training programs for both beginners andexperienced agents. Larger firms usually offer more extensiveprograms than smaller firms. More than a thousand universities,colleges, and junior colleges offer courses in real estate. Atsome, a student can earn an associate's or bachelor's degreewith a major in real estate; several offer advanced degrees. Manylocal real estate associations that are members of the NationalAssociation of Realtors sponsor courses covering the fundamentalsand legal aspects of the field. Advanced courses in mortgagefinancing, property development and management, and other subjectsalso are available through various affiliates of the NationalAssociation of Realtors.
Advancement opportunities for agents may take the form of higherrates of commission. As agents gain knowledge and expertise, theybecome more efficient in closing a greater number of transactionsand increase their earnings. In many large firms, experiencedagents can advance to sales manager or general manager. Persons whohave received their broker's license may open their own offices.Others with experience and training in estimating property valuemay become real estate appraisers, and people familiar withoperating and maintaining rental properties may become propertymanagers. Experienced agents and brokers with a thorough knowledgeof business conditions and property values in their localities mayenter mortgage financing or real estate investmentcounseling.
The median annual earnings of real estate agents, includingcommissions, were $32,930 in 2003. The middle 50 percent earnedbetween $21,201 and $54,860 a year. The lowest 10 percent earnedless than $15,480, and the highest 10 percent earned more than$93,780.
Median annual earnings of salaried real estate brokers, includingcommission, were $54,000 in 2002. The middle 50 percent earnedbetween $31,240 and $94,170 a year. The lowest 10 percent earnedless than $18,420, and the highest 10 percent earned more than$155,000 a year.
Commissions on sales are the main source of earnings of real estateagents and brokers. The rate of commission varies according towhatever the agent and broker agree on, the type of property, andits value. The percentage paid on the sale of farm and commercialproperties or unimproved land usually is higher than the percentagepaid for selling a home.
Commissions may be divided among several agents and brokers. Thebroker or agent who obtained the listing usually shares theircommission when the property is sold with the broker or agent whomade the sale, and also with the firm that employs them. Althoughan agent's share varies greatly from one firm to another, oftenit is about half of the total amount received by the firm. Agentswho both list and sell a property maximize their commission.
Income usually increases as an agent gains experience, butindividual ability, economic conditions, and the type and locationof the property also affect earnings. Sales workers who are activein community organizations and in local real estate associationscan broaden their contacts and increase their earnings. Abeginner's earnings often are irregular, because a few weeks oreven months may go by without a sale. Although some brokers allowan agent to draw against future earnings from a special account,the practice is not usual with new employees. The beginner,therefore, should have enough money to live for about 6 months oruntil commissions increase.
[Part of this information was adapted from information provided bythe United States Bureau of Labor Statistics]