(**) Disclosure: This post may contain affiliate links, meaning our company, JCHQ Publishing will get a commission if you decide to make a purchase through the links, but at no additional cost to you.
If you have been working as a real estate salesperson in California for some time, and wish to bring your business to the next level, then upgrading your license to become a real estate broker could be a sensible choice.
Rather than making income solely based on your sales production, being a broker allows you to build a team of real estate agents. You’ll be recruiting, providing training and support to your underlying agents. In return, you would get a share of their commission.
To become a real estate broker in California, you must:
- Be at least 18 years and have a valid SSN;
- Hold a high school diploma or higher;
- Have at least 2 years of real estate salesperson experience in the previous 5 years;
- Complete 8 college-level courses;
- Pass the California Real Estate Broker Exam;
- Submit an application and $395 fees to the California Department of Real Estate
In this guide, you’ll learn the steps to become a real estate broker in California, income updates, and FAQs on this profession.
(By the way, if you are just starting the real estate career, but haven’t obtained the sales associate license yet, you should read over this career starter guide first.)
When choosing a real estate school, I prefer one where you could take the courses online. This way, you could study at your own pace whenever and wherever. The CE Shop is a trustworthy real estate education provider. You may click here to see whether they offer pre-licensing course in your state. (**)
6 Steps to Become a Real Estate Broker in California
Step 1: Meet the eligibility requirement
Once again, you’ll need to be at least 18 years old, have a valid Social Security Number, hold a high school diploma or higher.
Step 2: Fulfill the work experience requirement
You need to work as a full-time licensed salesperson for a minimum of two years within the previous five years period.
The way the Department defines “Full-time” is that you need to work at least 40 hours per week as a licensed real estate salesperson. However, if you work more than 40 hours per week, no extra credit will be given.
Many real estate agents could be working part-time at the initial stage of the career. Therefore, the credit hours will be counted on a prorated basis. But keep in mind the Department will not consider real estate activities that are less than 10 hours per week.
Here’s the Employment Verification form you are required to fill out.
Work Experience Exemption
There are some conditions where you may be exempt from the two-years full-time real estate salesperson experience requirement:
- Have a four years degree in real estate which is obtained from an accredited college or university
- Experience as a real estate appraiser
- Experience as an escrow/title officer or loan officer that is related to conveying or financing real property
- Licensed real estate professional
But of course, you should always verify with the California Department of Real Estate.
Step 3: Complete the pre-licensing education
You must complete 8 college-level courses, of which five of them must be:
- Real Estate Practice
- Legal Aspects of Real Estate
- Real Estate Finance
- Real Estate Appraisal
- Real Estate Economics or Accounting
You may choose the remaining 3 elective college-level classes from the list below:
- Advanced Legal Aspects of Real Estate
- Advanced Real Estate Finance
- Advanced Real Estate Appraisal Business Law
- Common Interest Developments
- Computer Applications in Real Estate
- Escrow
- Mortgage Loan Brokering and Lending
- Property Management
- Real Estate Office Administration
- Real Estate Principles
If you had already taken some of the courses when you applied for the real estate salesperson license, these classes could also be qualified for the real estate broker license.
Once again, Members of the California State Bar are exempt form this college-level courses requirements.
Step 4: Submit application to the California Department of Real Estate
Similar to the registration process of being a real estate agent, you’ll need to apply to the Department. Just that this time you’ll complete the Broker Exam/License Application (RE 436).
You also need to provide other necessary documents, such as the transcript of pre-licensing classes completion, exam fee ($95) and license fee ($300).
Step 5: Pass the California real estate broker examination
The exam consists of 200 multiple choice questions. It also covers 7 major areas of real estate subject, while the approximate weighting of each is the same as the ones in the real estate salesperson exam.
The exam is split into two session, one in the morning and the other in the afternoon. You’ll be given 5 hours to complete, so 2.5 hour for each session.
The required passing mark is 75%. The result will be available to you immediately after you write the exam.
PrepAgent is an exam prep that I highly recommend. Many students were able to pass the real estate exam after doing their practice questions. Over 97% of users provided a 5 out of 5 stars rating to them on Facebook. Click here to check out their package options. (**)
Step 6: Maintain the Real Estate Broker License
You need to renew your license every four year by filling out the Broker Renewal Application. You may also do so through the eLicensing online system. The renewal fee is $300.
During each license period, you need to obtain 45 hours of CE credits.
On the first renewal, the curriculum must consist of:
- 6 courses (3-hours each) in the following subjects: Ethics, Agency, Trust Fund Handling, Fair Housing, Risk Management, and Management and Supervision;
- At least 18 hours of consumer protection courses;
- The remaining CE credit may be related to either consumer service or consumer protection courses.
For subsequent renewals, the curriculum must include the following:
- A survey course (8 hours) covering the six mandatory subjects (Ethics, Agency, Fair Housing, Trust Fund Handling, Risk Management, and Management and Supervision);
- Alternatively, you may take each of the mandatory subjects separately;
- At least 18 CE credit hours of consumer protection courses;
- The remaining CE required may be related to either consumer service or consumer protection courses.
A Quick Table Summary of Becoming a Real Estate Broker in California
| Work Experience | Education | Exam | Fees |
|---|---|---|---|
| Full-time licensed salesperson for a minimum of two years within the previous five years period. | 8 college-level courses | 200 Multiple-choice questions 5 hours of writing time Required passing score 75% | Pre-licensing courses around $225 to $280 Exam fee $95 License fee $300 |
How long does it take to become a real estate broker in California?
It takes approximately 4 months to get a real estate broker license in California. But it also depends on the time it takes you to complete the pre-licensing courses, exam, background check, application.
You may speed up in getting the CA real estate license by taking online courses. This way, you’ll have the flexibility to finish the pre-licensing education at a quicker pace.
How much does it cost to get a real estate broker license in California?
It costs approximately $675 to get a real estate broker license in Alabama. Here’s the breakdown:
- Broker Courses – $225 to $280 (Approx.)
- Exam fee is – $95
- License fee – $300
However, if you were setting up a real estate brokerage, the cost of getting a broker license is only part of the expenses. There is also other office expenses such as salary of administrative staff, office lease, furniture, equipment, software subscriptions.
Can you get a real estate broker license with a felony in California?
The California Department of Real Estate will put into consideration the applicant’s honesty, trustworthiness, character, and integrity. Whether a felon can get a real estate license is subjected to how the Department evaluates the case.
Denial of a license may be recommended for the following reasons:
Failure to disclose pending criminal charges, criminal convictions, or disciplinary action taken against a business, professional license, certificate or permit by an agency in California, another state or by the Federal government. Conviction of a felony and the felony is substantially related to the qualifications, functions and duties of a real estate licensee.
Conviction of a misdemeanor and the conviction is substantially related to the qualifications, functions and duties of a real estate licensee. Administrative action taken against a business, professional license, certificate or permit by an agency in California, another state or by the Federal government.
Quote from California Broker Exam/License Application
A determination that the facts of a particular case warrant denial, such as the nature or severity of the act or the presence of aggravating factors.
But don’t get discouraged as everyone has a past. The most important is that you can demonstrate that you will serve the public in a fair, honest, and open manner.
Here’s an article that covers how to apply for a real estate license with a felony record. In there, you’ll find practical tips which could help your application.
How much do real estate brokers make in California?
Real estate brokers in California earn an average yearly salary of $104,120. It typically ranges from $43,760 and $145,330.
There are 6,320 real estate brokers in California. It works out there are 0.363 real estate brokers per 1000 of workers.
At the beginning phase, you could experience a lower income. It’s going to take time to build up your brand and recruit real estate agents. But as you continue to grow your team and sharpen your business skills, you should be able to notice a significant improvement in your earning.
Your earning potential as a real estate broker would depend on your sales team’s production and the commission splitting schedule. In other words, your ultimate role is to provide support so that your sales agent can close more deals.
Here’s another post you could be interested. “Do Brokers Make More than Real Estate Agents? (Facts Revealed)“
(*) Bureau of Labor Statistic – May 2019
Practical ideas for running a real estate broker business in California
1) Familiarize with the Broker Compliance Evaluation Manual
Violating the regulatory rules can lead to severe consequences such as penalties or license suspension. As a real estate broker, it is critical to know the real estate laws and regulations.
The Broker Compliance Evaluation Manual is a 17-pages guide that covers the proper procedures when handling real estate sales. It consists of two sections, and below are the topics being discussed.
Section 1 – General Business Practice
- Are the broker’s salespersons and broker associates properly licensed?
- Does the broker notify the Department of Real Estate upon the hiring and termination of real estate licensees?
- Does the broker have a written broker-salesperson agreement with each salesperson and broker associate?
- Is the broker properly supervising?
- Does the broker retain copies of all documents?
- Do the documents disclose the negotiability of commissions?
- Does the broker have a license for each business location?
- Is the broker using a fictitious name?
- Is the broker providing the Real Estate Transfer Disclosure Statement?
- Is the broker maintaining pest control documentation?
- Is the broker conducting escrows?
SECTION 2 – Trust Fund Handling
- Is the bank account used for trust fund handling in the name of the broker as trustee or appropriately designated as a trust account?
- Is the bank account used for trust fund handling an interest-bearing account?
- Are control records complete and accurate?
- Are the separate transaction records complete and accurate?
- Is monthly reconciliation of the control records and separate records performed and documented?
- Are trust funds deposited in a timely manner?
- Are authorized signatories either licensed to the broker or unlicensed but bonded/insured?
- Are broker’s funds separated from trust funds?
2) Run a paperless brokerage
There is a lot of documentation involved in a real estate broker business. (i.e., purchase agreement, appraisal, home inspection, client working agreement, mortgage commitment, employment contract for your staff, client’s identification documents.)
However, storing and handling them all in paper format is no longer efficient and taking up lots of unnecessary office space.
It will help if you run a paperless office, where all the documents can be sent, received, stored, and signed electronically through a secured platform. (But you should check with the CA Department of Real Estate whether that would comply with the regulatory rules .)
Here’s another post I wrote on how to set up a paperless office. In there, you will find some of the business tools that I’m also using.
3) Connect with other real estate professionals
Meeting with like-minded professionals certainly can help you gain more profound insights into the real estate industry.
As you are trying to recruit sales agents to your office, you need to understand their needs and concerns. Joining trade associations such as the California Association of Realtors allow you to connect with other sales agents and brokers.
Whom should I contact if I have more questions about CA real estate broker license?
You may contact the California Department of Real Estate:
- Phone: (877) 373-4542;
- Fax number: (916) 263-8943
If you are reading up to this point, I bet you must be interested in getting a real estate license. Your first step is to complete the pre-licensing courses. You should select one that has an excellent reputation and long-term track record of satisfying students. The Colibri is exactly that! You may click here to check it out yourself. (**)
Reference:
- California Department of Real Estate (source)
- State of California Department of Real Estate- Examination Description (source)
- Bureau of Labor Statistics
- California Association of REALTORS (source)
(**) Affiliate Disclosure: Please note that some of the links above are affiliate links, and at no additional cost to you. Our company, JCHQ Publishing will earn a commission if you decide to make a purchase after clicking on the link. Please understand that we include them based on our experience or the research on these companies or products, and we recommend them because they are helpful and useful, not because of the small commissions we make if you decide to buy something through the links. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.
Disclaimer: The information in this post is for general information only, and not intend to provide any advice. They are subjected to change without any notice, and not guaranteed to be error-free. Some of the posts on this site may contain views and opinions from individual not related to JCHQ Publishing. They do not necessarily reflect our view or position.
