The uncertainty of the coronavirus pandemic can make it difficult to plan for the future, but if you’re hoping to advance your real estate career, now might be a savvy time to upgrade your real estate license. Thinking about using your quarantine to make the move from real estate broker to broker-in-charge? Here’s how you can decide if now is a good time to take the next step.
Benefits of upgrading from broker to broker-in-charge
Many real estate brokers see becoming a managing broker as the natural next step in their career progression. It’s one way to earn more and take greater control over your time as a real estate professional. Here are the benefits many people see from moving into a managing broker position.
Earn team commissions
Most brokerages are structured so that the real estate brokers on the team give a percentage of their commission to the broker-in-charge above them. Because of this, managing brokers are able to earn more money by increasing the size of their team. If you’re at your absolute capacity as a real estate broker and can’t do any more transactions, becoming a broker-in-charge is a way to start maximizing your expertise to teach a team who can boost your earnings.
Keep in mind, not all managing brokers start at the top of their brokerage. If you’re an associate managing broker you might have fewer real estate brokers working under you which means you could earn less. However, becoming a broker-in-charge does provide a pathway to advancement within a brokerage that typically isn’t available to real estate brokers.
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As a real estate broker-in-charge, you are able to take more control over your career — deciding not just when you’ll work but who you’ll work with. If you’ve been looking to specialize in a certain niche, becoming a broker-in-charge might be your best strategy. According to the 2019 NAR Member Profile, 36% of real estate managing brokers have sole ownership of their brokerage, which obviously gives complete autonomy. However, even if you’re in the 50% of managing brokers with no ownership in the firm, acting as an associate broker can still give you a lot more control over your hours and the type of business you pursue.
Income difference between broker-in-charge vs broker
According to data found in the 2019 NAR Member Profile, there is a notable earnings different between real estate brokers and managing brokers.
- In 2018 licensed managing brokers and associate brokers reported a median gross income (before taxes) of $70,400. Licensed real estate brokers in the same year reported a median gross income of $31,900.
- The difference is even greater when you compare the specific income of brokerage owners (without selling), which had a reported median of $105,100 in 2018.
- Even associate brokers-in-charge earn statistically more than real estate salespeople. They reported a median of $61,000 in gross earnings in 2018, nearly double the reported earnings of brokers.
Is now the right time to upgrade your license?
Upgrading your license can be a great way to focus on your goals for the future and help you find something productive to do even when your career seems uncertain. Because brokers-in-charge statistically earn more than real estate brokers who haven’t upgraded, it could be a way of setting yourself apart in a competitive marketplace. Weighing the cost against the potential upsides is a great way to start deciding if it’s in your best interest to upgrade your license now.