How to Become a Commercial Real Estate Broker
Learn how to become a commercial real estate broker. Research the job description and licensing requirements, and find out how to start a career in commercial real estate.
What Is a Commercial Real Estate Broker?
A commercial real estate broker is a licensed professional who helps clients buy, sell, or lease properties that will be used for business purposes. They represent and act as mediators between buyers and sellers. Real estate is a very competitive field, and long work hours are often required for career success.
While a college degree is not required to become a commercial real estate broker, professional licensure is required in all 50 states and the District of Columbia. Many postsecondary institutions offer courses and certificate programs that prepare aspiring real estate brokers for their licensing exams. Associate’s and bachelor’s degree programs in real estate may be offered by some institutions as well. Read on to learn more about how to get started in commercial real estate.
|Degree Level||No degree required, though postsecondary education is helpful|
|Licensure and Certification||Commercial real estate broker’s license required in all 50 states and the District of Columbia|
|Training||Real estate coursework typically required prior to taking a licensing exam|
|Experience||Varies; 1-3 years of experience in real estate sales is often required before becoming licensed as a broker|
|Median Salary (2019)||$59,720 (for all real estate brokers)*|
|Job Outlook (2019-2029)||2% increase*|
|Key Skills||Ability to work alone for extended periods of time; strong communication, people, and problem-solving skills, persuasive abilities; self-motivation|
Source: *U.S. Bureau of Labor Statistics (May 2019)
How to Become a Commercial Real Estate Broker
Are you wondering how to get into commercial real estate? There are several steps that you can take to enter the field. Let’s go through them one at a time.
Step 1: Earn a Real Estate Sales License
Getting into commercial real estate requires a high school diploma or GED before you consider the first important step: licensure. In order to become a licensed commercial real estate broker, most states require prior real estate sales experience. You must have a license to work in real estate sales, so the first step toward becoming a commercial real estate agent is to earn a real estate sales license. Commercial real estate license requirements vary from state to state, so be sure to do your research to find out how to get licensed where you live. Most states require individuals to possess a high school diploma or its equivalent, complete a certain number of real estate courses, and successfully pass an exam.
Some individuals interested in this field might consider a postsecondary certificate or degree in real estate. Although not required, aspiring commercial real estate brokers may wish to enroll in postsecondary certificate or degree programs. These programs are offered at many colleges and universities. The pre-licensing course requirements may be waived for those who have earned a state-approved postsecondary certificate or degree in real estate.
Step 2: Gain Real Estate Experience
To prepare for a career as a commercial real estate broker, individuals typically need 1-3 years of experience as a real estate sales agent. They can acquire this experience by working for real estate companies or individual brokers. Because commercial real estate deals with properties that are used for business purposes, focusing on commercial real estate sales may provide the experience and skills necessary to become a successful commercial broker.
Real estate sales agents that want to become commercial brokers should try to develop and strengthen the required skills. Specializing in commercial real estate sales helps those who are serious about becoming commercial brokers. Learn the basics of zoning and tax laws, how to evaluate a business, and how to choose a business location. Think like a business person and develop a network. Stay in contact with people who are operating successful businesses in locations that have already been marketed to or are familiar. Their support may be of great help in the future.
Step 3: Earn a Broker’s License
After gaining the experience required by their state, a real estate sales agent may become a licensed real estate broker. This usually involves completing a certain number of real estate training courses and passing an exam. Licensing requirements vary by state, so the exams will vary as well.
In order to be successful as a commercial real estate broker, complete continuing education as needed. State real estate licenses must be renewed every 2-4 years, with some states requiring an examination or continuing education with each renewal. Each state has its own licensing commission, so it’s best to contact the appropriate state for specifics about licensing and renewing licenses.
Step 4: Become a Commercial Real Estate Broker
Upon receipt of their real estate broker’s licenses, individuals can obtain positions as commercial real estate brokers. Commercial real estate brokers will most likely acquire additional skills and continue to develop professionally as time progresses.
Brokers should stay up to date on the latest advancements and innovations in the field. To show commitment to their positions, commercial real estate brokers must stay informed about the latest developments in the field. Innovation is occurring in many areas, such as property marketing, environmental standards, and mobile data.
With experience, brokers may choose to open and operate their own commercial real estate offices. Brokers interested in pursuing this path will likely need some business and finance knowledge, which may be developed through experience or postsecondary training.
When considering a career as a commercial real estate broker, be aware that this path requires self-motivation and flexibility as they relate to work hours in order to first become a licensed real estate agent, and then with experience, the completion of postsecondary coursework. After obtaining a state-required license, it’s possible to work as a commercial broker, and if desired, run one’s own business with hired sales agents.
How Do Real Estate Brokers Get Paid?
Rather than earning a salary, most real estate agents earn a commission on each sale they make. This means that their income may vary based on the kinds of properties available and the housing market. For those who dislike uncertainty, this situation may be unappealing. For those who appreciate the risk and reward cycles associated with real estate broker work, earning a commission can be an interesting challenge.
Where Do Real Estate Brokers Work?
The work environment for real estate brokers varies. Some of their work is conducted in an office setting or from home, including liaising with clients and setting up appointments. Real estate brokers should also be prepared to:
- Give tours of properties
- Help make the properties they’re selling look their best
- Market the properties they wish to sell
- Help their clients find appropriate places to buy
- Make offers and secure deals
For this reason, real estate brokers must be prepared to do some local travel for business purposes and to work in a variety of environments.
What Skills Do Estate Brokers Need?
Real estate brokers should also be skilled in the following key areas:
- Communication, especially interpersonal
- Critical and informational listening, especially when interpreting clients’ needs
- Knowledge and understanding of the housing market
- Motivation and self-direction
How to Get into Commercial Real Estate
Are you thinking about becoming active in the commercial real estate industry? Maybe you’ve considered residential real estate but think you’d be a better fit on the commercial, or CRE, side of things. In residential real estate, it’s often easier to get started, and you’ll always have clients and potential transactions.
But commercial real estate also offers substantial potential clients, because CRE properties can offer investors steadier returns and improved cash flow when compared to residential properties. It’s also a better money-maker for CRE agents. In fact, around the nation, CRE agents have an average annual salary of $90,914–residential agents skew more towards $50,897.
So, if this sounds like a career you’re interested in, we’ve put together some information about what it takes to make it in the CRE industry and more.
BECOMING A COMMERCIAL REAL ESTATE PROFESSIONAL
The best way to earn success in any industry is to understand the field and know your product. Commercial real estate properties generate income for their owners. Think of places like hotels, apartment buildings, and other places of business. Investors often choose this type of property for the ongoing income it provides through tenant rents.
The steps to becoming a professional in the commercial real estate industry include:
1) Get your real estate license.
Whether you’re dealing in commercial or residential property sales, you must obtain a real estate license in the state in which you plan to operate. This gives you the right to represent both sellers and buyers, and also lessors or lessees involved in transactions. Your state’s real estate license is the same whether you go into commercial or residential properties. To get your real estate license, you have to:
- Meet your state’s eligibility requirements: Every state has licensing requirements of its own and regulatory offices. Some of the most common state-to-state requirements include having reached a certain age, a clean criminal record, and at least a high school diploma. Your state may have reciprocal licensing agreements (like this example for Connecticut residents) with surrounding states, meaning you can conduct real estate business in that state as well as your own.
- Take approved real estate classes: Each state’s courses, their content, and hour requirements differ. For instance, New York individuals must take 75 hours of approved courses; Texas requires its residents to take 180 hours. The classes have a difficulty level of college freshmen courses and normally cost around $150 up to $500. The cost also depends on the state and the format you attend–in-person or online.
- Pass the real estate exam: Your exam will most likely be administered by a state agency and consists of 75 to 150 multiple-choice questions. Real estate exam passing rates are only around 55%, so it’s suggested you take advantage of any study guides or pre-exam programs you find. You’ll get your test result about seven days later and, if you pass, expect your license 14 days from the date you took your exam.
2) Find a firm that specializes in commercial real estate.
After you get your license, it’s time to find a brokerage that is:
- Looking for new agents
- Offering the opportunity to obtain market experience
- Already working in the commercial real estate industry
Any experience gained is better than none, but if you’re not at all interested in residential real estate transactions, it’s best to find a firm that exclusively works in CRE. A committed commercial brokerage normally has training programs for new agents, and these programs may even include a salary while you learn. The typical CRE coaching or training program lasts about a year and lets you focus on just commercial properties so you don’t need to close residential deals to make an income while you’re learning.
That said, it’s much more difficult to get into these kinds of firms strictly due to the overwhelming competition. In the event you’re able to score a brokerage with a training program for new CRE recruits, you can expect an average annual salary of $35,000 before you to begin make your first commercial transaction. In some cases, the agency may not offer salaried training. In that case, you’d need to close some residential sales as you learn the ropes of CRE.
3) Join an association.
A lot of the top commercial real estate brokerages stipulate that their brokers must join a professional association, either at the national or state level. Some of the most respected associations include NAR and REBNY. And don’t think of these requirements as a headache — joining a professional real estate association is actually important for your success. These organizations offer education, networking, and even discounts on items you’ll need in your career, such as software or manuals. You can even become a Realtor when you join NAR, the National Association of Realtors. The NAR is the United States’ largest trade association. It has over a million real estate professional members. Joining NAR adds a level of credibility to your title.
4) Take a look at related career options.
Commercial real estate agents aren’t limited to just CRE property sales. You can also venture into development or commercial property management. In development, you can buy land, build on it, arrange financing, negotiate leases, and supervise the entire process. Property managers handle everyday operations of commercial properties, such as repairs and maintenance.
CONSIDERATIONS IN THE COMMERCIAL REAL ESTATE INDUSTRY
Before diving headfirst into a career in the CRE arena, there are things that outsiders don’t know about this industry. You should consider various aspects of a career in CRE before making the jump.
To be successful in CRE, you have to find leads and convert them into clients. In other words, how are your sales skills? Are you proactive? Persistent? If you enjoy a bit of friendly competition, you’re ambitious, and you have an uncanny knack to pitch things convincingly, you’d make a great commercial real estate broker. An outgoing nature and a no-fear attitude towards cold calling and talking to strangers also helps. Finally, as technology continues encroaching, albeit welcomed, a degree of tech-savviness is also necessary.
IS A CAREER IN CRE RIGHT FOR YOU?
If you’re already a real estate agent, you’ve got a leg up on others who’ve yet to make that career move. There are still many things to think about before totally diving into the complexities of commercial real estate. The CRE industry does offer its agents large commissions and several specialty career directions. It’s also got its own set of unique challenges. If you’re prepared to obtain the higher education needed (some states require a college degree); you’re fine with waiting longer for deals to close; and you don’t mind that you won’t close quite as many sales per year as your residential counterparts, a career as a commercial real estate agent could be right for you.
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