What's the Difference Between Michigan Real Estate Salespeople and Brokers?

If you want to become a Michigan real estate professional and you’re starting from scratch, you’ll first need to become a salesperson. Once you’ve got a few years of experience under your belt, you’re eligible to become a real estate broker.

But what’s the difference? And which license type will be best for your career goals? To help you find out, let’s look at a few of the key differences between Michigan real estate brokers and salespeople.

Independence

The key difference between salespeople and brokers is this: salespeople have to work under a broker, while brokers can work on their own. In other words, a broker can own their own real estate business, while a salesperson will need to work for someone else’s real estate office/brokerage/practice.

Becoming a broker doesn’t necessarily mean you need to strike out on your own. There are a few broker license types available:

Individual broker: This means you’ll operate as a sole proprietorship.
Associate broker: You’ll be licensed as a broker, but you’re licensed to another broker or brokerage entity (i.e., working for their company).
Broker company license: With this license, you can open your own brokerage and hire other Michigan real estate salespeople and brokers to work for you.

Long story short, as a salesperson, you’re going to have a boss. As a broker, you can be your own boss, should you choose that path for yourself.

Experience level

You’re not eligible to get a Michigan real estate broker license until you have three years of full-time experience as a salesperson. In fact, the Michigan Department of Licensing and Regulatory Affairs (LARA) has a specific experience verification form you’ll have to file in order to get a broker license.

Pre-license hours and exam requirements

In some ways, the license application process is pretty similar whether you’re getting a Michigan salesperson or broker license. You’ll need to take some pre-license education and pass an exam either way, for example.

But the required hours and the content on the exam vary, so it’s important to make sure you’re taking the right steps for the type of license you want. Brokers need 90 hours of pre-license education, while salespeople need 40 hours. The good news is that both license types can take their pre-license coursework online and at their own pace.

The hours you need have to cover specific LARA-approved topics, so make sure you find a state-approved education provider who offers courses focused on the proper material.

There are also some differences between the salesperson and broker exams. The broker exam is 210 minutes and covers more advanced topics than the three-hour salesperson exam. Brokers need to get 75% of questions right to pass, while salespeople can pass with a 70%. To help yourself pass either test, you might want to consider completing an exam prep course.

Another key, exam-related difference is that potential salespeople need LARA’s approval to sit for the salesperson exam. Brokers don’t need this pre-approval. If you want to get a salesperson license, you need to apply with LARA before you can schedule your exam.

Ultimately, there are some big differences between Michigan real estate salespeople and brokers, primarily centering around the level of independence you get and your years of experience. If you’re new to real estate, a salesperson license is the right place to start.