How to Choose a Sponsoring Broker
Did you know the clock starts on the day you finish your real estate licensing course? NJ gives you a 12 month deadline to find a sponsor or all of your efforts are lost. Step one: sign up and pass the state licensing exam. Step two: (the more important step) find a broker sponsor.
People get a real estate license for all sorts of reasons, so it’s important to identify your priorities before beginning your search for a real estate brokerage. Some common motivations include:
Earn sales commission as a real estate agent.
Earn a salary as a real estate agent.
Learn about real estate investing.
Save money on your own real estate purchases.
Manage other people’s property.
Every different motivation brings unique questions to the table. We’ll dig into each one below.
Earn sales commission as a Real Estate Agent
Earning a living from sales commission can be exciting & extremely lucrative, but there are market risks you can’t always control. If going this route, be sure you have the financial wherewithal to stomach months or years of meager take home pay. Also make sure you read our article on questions every agent should ask before joining a new brokerage.
Earn a Salary as a Real Estate Agent
Publicly traded real estate brokerages, like Redfin, and mid to large size real estate developers keep salaried real estate agents on staff. While you’ll have less to worry about when it comes to finances, there is also a cap on what you can earn.
Learn about Real Estate Investing
The pre-licensure course definitely offers some good real estate fundamentals, but it is truly the tip of the iceberg when it comes to investing. To get a true grasp on real estate investing, I would recommend exploring any local commercial real estate brokerages or property management firms. They typically offer training and mentorship that you can’t find at residential brokerages.
Save Money on Your Own Real Estate Transactions
If you’ve ever bought or sold a property and looked at the commission lines on the closing statement, you’ll understand why investing in a real estate license makes a lot of sense. What you don’t see on that closing statement are the thousands in expenses and time commitment required to be a full service real estate agent. That’s why most folks realize that becoming a referral agent is the best way to save money on your own real estate transactions. At a company like General Referral, we hold your real estate license for a fraction of the cost & give you the flexibility to negotiate a huge discount when you buy or sell your own home.
Manage other people’s property
Similar to number two above, these positions are usually salaried, but your day to day may look different depending on your role inside the organization. At a property management company, your company typically earns a percent of collected rent. This means that filling vacant properties with tenants, keeping tenants you already have, preserving the building’s value, complying with regulations & reporting to the owner are all critical components.
Sometimes, your motivation for getting licensed changes or life just gets in the way. Fortunately, there’s a low cost / low commitment option for you too. In New Jersey, a brokerage like General Referral can sponsor you for less than $100 per year. Not only can you earn commission just for referring customers to full service real estate agents, but you also get a waiver from the state for continuing education while your license is held in referral status.