How to Get a Broker’s License in Michigan?

April 7, 2022
Growing Your Business

Most agents who have worked as a real estate salesperson for at least three full-time years are ready to step up to the next level of professional licensing and obtain a real estate broker’s license. Obtaining a real estate broker’s license opens up new opportunities for serious real estate professionals. A broker’s license is required to own and operate a brokerage operation. Most individuals who obtain a broker's license, however, continue to work with their current real estate company bolstered by the confidence that they have reached the licensing pinnacle of their careers.

Not every real estate professional has aspirations to own and operate his or her own brokerage company. Nevertheless, it makes perfect sense for every full-time real estate professional who has been in the business for at least three years to obtain a real estate broker’s license. As we will soon see, a real estate broker must meet higher education and experience requirements. When agents who have earned a broker’s license go on an appointment to list a house, or meet with a potential homebuyer, they can proudly inform the seller or buyer that they have earned the highest licensing designation awarded by Michigan’s Professional Licensing Bureau. Before we delve into the steps you need to take to become a broker, let’s first take a look at the definition and duties of a real estate broker.

What Does a Real Estate Broker Do and How Does it Differ From a Real Estate Salesperson?

One of the main differences between a real estate salesperson and a broker is that a salesperson must be licensed under a broker. The broker is responsible for supervising all affiliated licensees, including salespersons. Accordingly, all business activities are conducted in the name of the broker. This means that all commissions are deemed to be earned on behalf of the broker who then disburses the agreed upon share to the appropriate salesperson.

When it comes to the specific tasks that licensed real estate salespersons and brokers perform, they are essentially the same. The difference is that the broker acts as an agent for the public and salespersons act as agents for their employing broker. Some of the key functions include real estate sales, listing, buying, providing market analyses, and leasing for others on a fee basis. To become a licensed real estate salesperson, you do not need any prior experience. As mentioned earlier, becoming a broker requires three years of experience in the field as well as additional real training and testing. Because of the additional schooling that is required, getting a broker’s license is also a great way for real estate agents to gain additional knowledge to serve their clients more effectively.

To Whom Can a Broker’s License be Issued?

In Michigan, a broker’s license can be issued to either an individual or a company. Here are the categories for broker licensure: 

  • Individual broker: The broker’s license is issued in the name of a person who owns and operates the brokerage. If the individual broker wants to operate under a business alias, he or she can obtain a DBA which is an acronym for “Doing Business As.” 
  • Broker license issued to a company: A broker’s license can also be issued to, and in the name of, a company. When this occurs, there must be at least one person who is licensed to carry out the functions of the broker. This individual is known as a principal associate broker. Whether a broker’s license is issued in the name of an individual or a company, there can only be one broker. All other individuals who qualify for a broker’s license become associate brokers.
  • Associate broker: An associate broker is, by definition, a real estate broker who is licensed under the same broker that salesperson’s are licensed under. All broker experience and education requirements must be fulfilled. A principal associate broker is the label given to owners, partners, or officers of the real estate company. He or she controls the operations of the brokerage. A non-principal associate broker, on the other hand, does not play such a supervisory role. The majority of brokers in Michigan operate as non-principal associate brokers.

What are the Responsibilities of a Broker?

Brokers typically employ real estate salespeople to work for the brokerage as independent contractors. As noted, Michigan license law and rules require a broker to supervise the work of all licensees. Managing salespeople and associate brokers is a big responsibility. One of the ways the broker can do this is by maintaining a well-written policies and procedures manual that details all of the requirements that all licensees must follow.

The broker is also responsible for training and educating the agents and staff who operate as unlicensed employees. Regular office meetings present a great opportunity to make sure that everyone in the company knows the company policy and to keep licensees abreast of changes in local, state, and federal law as well as market trends. Every licensee should make attendance at all office meetings a high priority.

Requirements for Getting a Broker’s License in Michigan

In summary, to become a Michigan real estate broker, you must to meet the following criteria:

  • Be 18 years of age or older.
  • Have at least three years of acceptable real estate experience (for example, working as a licensed salesperson) or in a business that is relevant and related to the business of real estate (such as a builder, loan officer, or attorney).
  • Successfully complete 90 hours of state-approved prelicensure education. This education is in addition to the 40 hours of salesperson pre-licensure education. 
  • Pass the required real estate broker license exam which is administered by PSI Services, LLC.
  • Submit a license application through the Licensing And Regulatory Affairs (LARA) website and follow all steps.

Most brokers are first licensed as salespeople and become brokers after gaining enough experience. If you don’t currently hold a real estate salesperson license, you can read our article Getting Your Real Estate License in Michigan to get started.

If you have a law degree with at least 6 hours in civil rights law and fair housing law, it may qualify as 60 hours of the 90-hour education requirement. Possession of a master’s degree in business administration or finance may also count as 60 hours of real estate education, whereas a bachelor’s degree in these fields may count as 30 hours. If you have any questions about how many hours of broker’s license education you need, contact us today!

Are All Broker License Classes the Same? No!

Serving as a broker is a huge responsibility and requires specific management skills and knowledge that are beyond the scope of the broker license exam. While all approved broker license classes will give you the 90 hours required to apply for your license, your professional gain from the courses will be vastly different. The Broker’s License Preparation Courses offered by NCI are presented in three 30-hour blocks adding up to the 90-hour broker license education requirement.

The first 30 hours of NCI’s broker license education cover all of the information you need to prepare for and pass the state exam. At NCI, we believe that simply passing the exam is only a small step in what’s required to become a good broker. This is why we invest the next 60 hours developing the required skills and delivering high-quality, meaningful content that focuses on what it takes to be a successful broker.

All of NCI’s popular broker license courses are custom-designed with a Michigan-specific focus. At NCI, we pride ourselves on providing aspiring brokers with all of the building blocks they need to establish a successful and profitable career.

Copyright © 2022 by NCI Associates, Ltd. All rights reserved. Any other use of this content is strictly prohibited without permission from NCI.

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