Understanding the Role of a Sponsoring Broker in Real Estate

By Ciprian Morariu Published: February 7, 2024

A career in real estate is a journey through challenges, opportunities, and rewards. 

Whether you are fairly new to the industry or planning to be a part of it in the future, working in real estate is an enriching and exciting experience. 

If you are ready to kick start your career in real estate, now is a good time. The real estate market in the United States has been steadily growing post-pandemic and is poised to reach greater heights. 

With positive signals like the rising demand for housing and a growing interest from real estate investors, now is the time to enter the market. 

You can start your career as a real estate agent or junior broker and set yourself up for success. However, you will need education, experience, and guidance to achieve your goal of building a thriving career in real estate. This is where the role of a sponsoring broker in real estate assumes a great deal of importance. 

It is often said that finding the right sponsoring broker is a lot like finding the right employer. 

However, finding the right broker is not easy, as there are pros and cons associated with everyone.

Sponsoring Broker in Real Estate

Introduction to Sponsoring Brokers

Let us start by answering the question that is always uppermost in the minds of those who want to make it as real estate agents and brokers. The all-important question is what is a sponsoring broker in real estate and how do you select the right one for you?

In simplest terms, a sponsoring broker is someone who employs newly licensed real estate agents and brokers. 

Sponsoring brokers are experienced real estate professionals with their brokerage firms, employing new real estate agents and brokers and mentoring them. 

According to the law, every newly licensed real estate professional must find a sponsoring broker with whom they can learn and practice real estate transactions. 

When you clear the licensing exam and obtain your agent or broker’s license, then the next step is to activate your license. This can only be done once you have found a sponsoring broker who is willing to hire you. Hence a new real estate agent cannot start working without the backing of a sponsoring broker. 

Defining the Sponsoring Broker

In the real estate industry, a sponsoring broker is a term used to describe the role of a senior, more experienced broker. 

By definition, a sponsoring broker in real estate is a professional who is legally licensed and allowed to guide, supervise, and manage junior agents and brokers.

There are thousands of sponsoring brokers in the United States and while they are all unique and different in their ways, there is one thing in common - they all have an employing broker’s license to legally employ junior agents or newly licensed brokers in their firm. 

The Role of a Sponsoring Broker in Real Estate

It is the responsibility and professional duty of a sponsoring broker to provide training and supervision to newly licensed real estate agents and brokers

Sponsoring brokers are expected to provide a wide array of benefits to junior agents and brokers, including support for marketing, mentorship, legal, and job security.

This means that a sponsoring broker provides the tools, experience, knowledge, and clientele to ensure success for their agents.  

Sponsoring brokers help junior agents and brokers gain confidence in their ability to engage in real estate transactions. 

Most importantly, they teach their agents to ensure compliance with the rules and regulations of the state and federal authorities. 

To sum it up, without sponsoring brokers and their expertise, achieving success and stability in the industry would be very difficult for new and junior professionals. 

What is a Sponsoring Broker in Real Estate?

The Role and Responsibilities of a Sponsoring Broker

Many aspiring agents and brokers have a common question - what does a broker do and how to work with a suitable sponsoring broker?

Sponsoring brokers play a pivotal role in the real estate industry in many ways. Some of their key roles and responsibilities include: 

  • Providing employment opportunities to newly licensed agents.
  • Offering training and mentorship to junior agents. 
  • Teaching the industry tips, tricks, and insights to fresh professionals.
  • Showing listings and leads for business expansion.
  • Provide access to their list of contracts for networking.
  • Oversee the daily activities and tasks of junior agents and brokers.
  • Maintain and enforce the ethical standards established by the state and federal authorites.

To sum it up, a sponsoring broker is more than just a supervisor - they act as a pillar of support, guidance, and training for newly licensed agents. 

A sponsoring broker plays the ever-important role of mentoring the activities and duties of their affiliated agents. 

Without a sponsoring broker, a newly licensed agent or junior broker would not get the means, experience, and skills required for practicing real estate. 

Since the ability to engage in a real estate transaction is exclusively limited to brokers, freshly licensed agents must find and work with more experienced brokers.

 Real Estate Sponsoring Broker

The Legal and Professional Relationship Between Agents and Sponsoring Brokers

A real estate broker can be a person, firm, company, corporation, or entity who has the legal authority and licensure to engage in selling, buying, purchasing, and leasing real estate. 

In most states, as per the state licensing authority, every beginner agent and newly licensed junior broker is required to work with a sponsoring broker. This is mandatory and generally considered as the norm. 

However, there are some states which allow an exception to this rule. These states can allow agents to work independently without a supervising broker. This type of arrangement is also known as an ‘independent brokerage’ or ‘associate broker’. 

Despite some exceptions, in most states, the professional and legal relationship between a real estate sponsoring broker and a salesperson or agent is like that of a master and apprentice. 

As per the law, a beginner agent is not allowed to take part in the sale, purchase, or renting of real estate on their own. 

However, if they can show sponsorship from a broker or a brokerage firm, an agent can engage in a real estate transaction. 

In summary, every real estate agent must be sponsored by a broker to meet the legal compliance requirements. 

Examples of Services Provided by a Sponsoring Broker

So far we have discussed what is a sponsoring broker in real estate and their role and responsibilities in the journey of a real estate agent

Let’s take a closer look at the services provided by a sponsoring broker and how they are relevant to the overall real estate industry. 

  • Sponsoring brokers provide access to a network of leads and clientele, helping real estate agents connect with potential clients. Thus, sponsoring brokers directly enable the sale, purchase, and renting of real estate. 
  • Sponsoring brokers ensures compliance with the state and federal regulations, ensuring the legal and financial integrity of the deal is preserved. This way, sponsoring brokers promote trust and transparency while withholding the ethical standards of the industry.
  • Sponsoring brokers provide real estate agents and beginner professionals with the training, coaching, and mentorship necessary to succeed. Without the guidance of sponsoring brokers, newly licensed agents will not be legally allowed to take part in a real estate transaction. 
  • Sponsoring brokers are also responsible for collecting and distributing the commissions earned as part of a real estate transaction. By ensuring a fair and transparent earning process, sponsoring brokers ensure everyone receives their rightful share of the deal.

How to Get a Broker to Sponsor You

Education and Licensing Requirements for Agents

If you are wondering how to get a broker to sponsor you, the first and foremost step is to complete the pre-licensing requirements. 

Sponsoring brokers are always on the lookout for beginner, newly licensed agents. To get them to sponsor you, you will need to first obtain a state-approved agent license. 

The first step in obtaining a real estate agent license is to fulfill your state’s licensing requirements. 

Depending on your state and the local real estate authority, you will have to meet the pre-licensing criteria and complete your real estate education. 

After completing the mandatory coursework, you will be eligible to take the real estate agent license exam. If you successfully clear the licensing exam, you will obtain an inactive real estate license. 

Post getting your license, the next step is to find a sponsoring broker who will be willing to work with you. 

Choosing the Right Real Estate Brokerage

Factors to Consider When Choosing a Brokerage

As you take your first steps into the exciting and challenging world of real estate, you will require the training, guidance, and mentorship of an experienced broker. 

This is why choosing a real estate brokerage is crucial for the success of your real estate career. 

Working with a suitable and qualified sponsoring broker can provide numerous benefits and can give your real estate career a steady start with a strong foundation. 

To choose a suitable sponsoring broker, you should keep in consideration some key factors, such as: 

  • Experience: To maximize your learning and knowledge, you should work with experienced brokers who have proven expertise in the industry. Skilled brokers can provide you with guidance and insights from their years of experience. 
  • Reputation: Not all brokers are equal in terms of their brand recognition and reputation. For newly licensed agents, finding and working with a well-known sponsoring broker can give a boost to your credibility and marketability. 
  • Training: The sole purpose of working with an experienced broker is to enhance your knowledge and skills. While choosing a sponsoring broker, evaluate what kind of training programs and coaching they can offer to boost your career growth.