You’ve studied hard, passed your exam, and finally earned your real estate license. You’re excited to hit the ground running, maybe even represent yourself in a personal transaction or start helping clients. But then the paperwork hits, you realize something.
You can’t actually practice real estate until you “hang your license” with a broker. What gives?
This moment of realization catches many new agents off guard. After all that effort, you’re still not legally allowed to sell a home on your own. And it’s not a technicality, it’s a cornerstone of how real estate works in every state.
Licensing Laws Require Broker Supervision
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No matter where you live. Florida, Georgia, Alabama, or beyond. The law is crystal clear.
Newly licensed real estate agents are required to work under the supervision of a licensed broker. You can’t list a property, represent a client, or earn commission without that affiliation. The reason? Accountability.
The broker serves as the legal backstop for all your actions.
- They oversee your transactions
- Ensure contracts are compliant
- Carry the legal responsibility if anything goes sideways.
In most cases, your commission is technically paid to the broker, who then distributes your portion based on your agreement.
Agent vs. Broker: What’s the Difference?
Here’s the simplest breakdown:
- A real estate agent is someone who’s completed state-mandated education and passed the licensing exam, but still must work under a broker.
- A broker is someone who’s taken additional education, passed a more advanced state exam, and is licensed to run their own business and supervise agents.
While agents are the frontline professionals handling deals, brokers are the licensed authorities who take ultimate responsibility. This distinction is both legal and structural. Brokers don’t just manage agents, they safeguard the integrity of the profession.
The Rise of Independent and Virtual Brokerages
That said, the industry is evolving fast. Today’s agents want more autonomy, better commission structures, and the freedom to work on their terms, without being handcuffed by traditional office politics or bloated fees.
That’s where brokerages like Realty Hub come in.
We’re part of a new generation of virtual brokerages built for lean, independent agents. Our flat-fee model strips away the overhead and outdated systems, while still providing the legal infrastructure, E&O insurance, and support agents need to operate with confidence. It’s the perfect hybrid: freedom when you want it, support when you need it.
Why Real Estate Agents Must Work Under a Broker
When someone earns a real estate license, it’s a significant achievement, but it’s not a green light to start selling homes independently. Every state requires newly licensed real estate agents to work under the supervision of a licensed broker.
The Legal Requirement: Sponsorship by a Broker
In all 50 states, agents must be “sponsored” by a broker to activate their license. Without a sponsoring broker, the license remains inactive, and the agent cannot legally represent buyers or sellers, collect commissions, or access essential tools like the Multiple Listing Service (MLS).
This structure ensures that new licensees are not left to navigate complex transactions without guidance. Brokers provide the legal umbrella under which agents operate, an essential component of the regulatory system.
Brokers Bear the Legal Responsibility
The law mandates broker oversight because brokers carry legal liability for the actions of the agents they supervise. When a buyer signs a purchase agreement or a seller lists a property, it’s the broker’s name, and license, that ultimately stands behind that transaction.
This liability framework means brokers are responsible for:
- Reviewing and approving contracts
- Ensuring legal disclosures are made correctly
- Overseeing escrow and earnest money procedures
- Guiding agents through state-specific laws and compliance issues
If an agent misrepresents a property or mishandles a deal, it’s the broker who may be fined, sanctioned, or even lose their license. That’s why brokers are required by law to actively supervise and be involved in their agents’ transactions.
No Broker, No Active License
Even if someone has completed their pre-licensing education and passed the state exam, they cannot legally practice real estate without broker affiliation. That means:
- No signing listing agreements
- No showing homes
- No collecting commission
The state will mark the license as “inactive” until it’s associated with a licensed brokerage. This rule applies whether the agent wants to sell full-time, part-time, or even just handle a personal real estate purchase.
What Happens If a Broker Goes MIA?
Because brokers are legally accountable, they’re expected to maintain availability and ensure smooth supervision throughout a transaction. However, if a broker becomes unreachable or is no longer able to fulfill their duties, agents may face delays in getting contracts approved or commissions disbursed.
In such cases, agents often have to contact the state real estate commission to reassign their license to a new broker. Some states offer temporary provisions or expedited processes for these scenarios, but having an engaged, responsive broker from the start is essential to avoid legal and logistical pitfalls.
Why Commissions Always Flow Through Brokers
Real estate commissions are never paid directly to agents. Even in cases where you’ve done all the work, found the client, wrote the offer, closed the deal, the commission must be paid to your broker, who then distributes your portion based on the agreement you have with them.
This structure is required by state law to ensure there’s professional oversight, clear accounting, and a pathway for resolving disputes if they arise. It also ensures the broker’s compliance policies are followed, especially when it comes to fair housing, disclosures, and escrow rules.
Why FSBO Rules Don’t Apply to Agents
Some new agents mistakenly believe they can act as a FSBO, just like any homeowner, when listing their own property or helping a friend. But if you are licensed, those FSBO freedoms no longer apply. The state considers you a professional acting in a professional capacity, even if you aren’t being paid a commission.
Attempting to bypass your broker or avoid supervision can put your license at risk. In fact, many state commissions treat this as unlicensed practice or conduct unbecoming of a licensee, especially if clients aren’t informed of your license status or you’re perceived to be operating in a gray area.
What If You Want to Work for Yourself?
One of the most common long-term goals for real estate professionals is to strike out on their own, start a brokerage, build a team, and have full control over how business is done. But to do that legally, you need a broker’s license.
The Path to Becoming Your Own Boss
To become a broker, most states require a combination of education, experience, and testing. While specific rules vary by location, the general path looks like this:
- Work as a licensed real estate agent for 2–3 years (full-time)
- Complete additional broker-level coursework approved by your state
- Pass the state’s broker exam, which is typically more rigorous than the agent exam
Once licensed, a broker can operate independently, open their own brokerage, and supervise other agents. Many choose to start small as sole proprietors, while others build large offices with dozens of agents working under them.
State-by-State Exceptions and Insights
In some states, there are unique paths to fast-track your way to broker status:
- California allows candidates to skip the required work experience if they hold a 4-year degree with a major or minor in real estate.
- Colorado classifies all licensees as brokers, but new licensees must work under an “employing broker” until they gain enough experience.
- Washington requires two years of experience, but also has specific education and testing requirements.
- Tennessee requires 36 months of experience as a licensed affiliate broker before applying to become a principal broker.
Each state has its own nuances, so it’s crucial to check with your state real estate commission to determine the exact steps.
Your Career Timeline: How Most Agents Start
Becoming a real estate agent can feel overwhelming at first, but once you understand the steps, it’s a clear, achievable path. Here’s a breakdown of how most agents begin their journey, especially in states like Florida, Georgia, and Alabama.
Step 1: Pre-Licensing Education
Every state requires prospective agents to complete a specific number of hours of pre-licensing coursework. These courses cover the fundamentals of real estate law, contracts, ethics, agency, and finance. In most states, you can take the classes online or in person, and many finish within a few weeks or months depending on their pace.
Step 2: Pass the State Exam
After completing your coursework, you’ll schedule and take the state real estate license exam. This test covers national and state-specific material. Once you pass, you’ll be eligible to apply for your real estate license, but that license isn’t active until it’s sponsored by a broker.
Step 3: Choose a Broker
This is where your career direction really starts to take shape. The brokerage you choose will determine:
- Your commission split
- The fees you pay (desk, tech, franchise, etc.)
- The freedom you have to run your business
- The level of support or micromanagement you experience
Traditional brokerages often take a 20% to 50% cut of your commission, and charge monthly fees whether or not you sell. Others offer a flat-fee model, where you pay a low per-transaction cost and keep 100% of your earnings. We’ll cover that more below.
Step 4: Secure E&O Insurance
Errors & Omissions (E&O) insurance is required by most brokerages and is essential for protecting yourself and your clients. It covers legal costs and settlements if you’re ever accused of making a mistake in a transaction. Some brokerages include E&O coverage in their fees; others require you to obtain it separately.
Step 5: Start Transacting Under Broker Supervision
Once you’re affiliated with a broker and covered by E&O insurance, you’re ready to go. You can begin working with buyers and sellers, marketing yourself, and closing deals, with your broker there to supervise and ensure compliance.
Flat-Fee Brokerages vs. Traditional Commission Splits
Here’s how the two most common brokerage models compare:
| Traditional Brokerage | Flat-Fee Brokerage |
| 70/30 or 80/20 commission split | Keep 100% of commission |
| Monthly desk/tech fees | Pay only per transaction |
| Mandatory meetings/training | Autonomy + optional support |
| Required Realtor® dues | Realtor® membership optional |
| Good for brand-new agents who want structure | Ideal for self-driven agents and part-timers |
How A Flat-Fee Brokerage Like Realty Hub Supports New Agents
At Realty Hub, we built our platform to flip the traditional brokerage model on its head. Instead of taking a piece of your commission, we offer a flat-fee structure that puts you in control.
Here’s What You Get
- Keep 100% Commission: You earned it, you keep it. Just $100 per year and $100 per transaction.
- E&O Insurance Included: Every Realty Hub agent is automatically covered. You only pay the deductible if a claim ever arises.
- No Desk Fees. No Franchise Fees. No Bloat: We don’t make money from office space, branding packages, or monthly tech charges.
- No Mandatory Realtor® Membership: You’re free to join if you want, but it’s not required. That alone can save agents $500–$1,000+ annually.
- Broker Access + Peer Support: You’re never on your own. Our managing broker responds directly to questions, often same-day, and our private agent Facebook group is an active community where pros jump in to help.
Who We Built This For:
- Part-time agents balancing real estate with other work
- Investors who want to do personal deals without penalties
- Referral-only agents looking to earn passively
- Self-starters who want autonomy, not micromanagement
- New licensees who value flexibility and lean infrastructure
Our motto is simple, but we mean it:
“Support when you need it. Independence when you don’t.”
And we live that every day.
New agents often tell us they were surprised at how easy onboarding was, and how responsive we were when they had questions during their first deal. Our goal is to create a frictionless, agent-first experience that lets you focus on what you do best: serving clients and building your business.
When to Choose Your First Broker
Choosing your first broker sets the tone for your entire real estate career. Whether you’re just getting licensed or thinking about making a change, look beyond flashy brands and bloated office perks. Focus on a model that gives you clarity, flexibility, and control over your income.
At Realty Hub, we’ve designed our brokerage for agents who want to work smarter, not harder. Agents who value autonomy over micromanagement, and transparency over complicated splits. If you’re ready to keep more of what you earn, operate on your terms, and still have access to the support you need when you need it, then we’d love to show you how our flat-fee model works.
Your real estate license should be a key to freedom—not a tether to outdated systems. Let’s unlock that potential together.
Join Realty Hub or explore how we help agents build lean, independent businesses from day one.