What is a Real Estate Broker

Real estate agent vs. broker vs. agent: an overview.
There are many different people who work in the real estate industry, including agents, appraisers, inspectors and salespeople. But sometimes the lines between the roles of these people can get a little blurry.

Specifically, most people confuse the terms real estate agent, broker and broker-and use them interchangeably. While there may be overlap in what they do, the three are distinctly different, especially when it comes to their qualifications and where they sit on the professional ladder.

A real estate agent is an industry professional who serves as an intermediary in real estate transactions. They are ultimately responsible for bringing buyers and sellers together and receive a commission-a percentage of the sale price of the property.

A broker, on the other hand, may work independently or start their own brokerage firm and employ other real estate agents. A broker generally has more training than an agent and handles some of the more technical parts of a transaction

Finally, a broker is a member of the Association of Realtors. This category includes agents, brokers, salespeople, appraisers and other real estate professionals. Realtors are bound by a code of ethics and must be experts in their field.

Real Estate Agent
A real estate agent is an industry professional who takes and passes all required real estate classes as well as the real estate licensing exam in the state in which they wish to work. As a starting point for most who go into real estate, it is the most comprehensive of titles. Agents are also referred to as real estate associates.

The agent can represent both buyers and sellers involved in a real estate transaction. A buyer’s agent asks for a wish list for their dream home and tries to match it with any available inventory. An agent representing a seller will actively market the property and try to attract buyers.

Responsibilities
Agents are responsible for conducting offers and counter-offers between each party, along with any questions they may have. An agent works with another agent once an offer has been accepted, and guides clients through the process of filling out paperwork. They also make sure their clients know all the requirements to close the sale, including home inspections, relocation and important dates like closing.

How agents get paid
Real estate agents work for brokers or agencies and are typically paid on a commission basis. This means they receive a percentage of the sale price of a property. So, this means the higher the selling price, the higher the commission.

Real Estate Agent
A real estate agent is someone who continues their education beyond the real estate brokerage level and successfully obtains a state real estate broker’s license.

Real estate agents can work as independent agents or have other agents working for them. Agents who pass the brokerage exam but work under another broker are usually referred to as real estate brokers. Associate brokers may share in broker profits beyond the typical agent commission.

Responsibilities
Brokers who work with buyers typically search for properties that meet the criteria set by their clients, conduct negotiations, prepare offers, and help buyers with any other issues leading up to closing.

Seller brokers, on the other hand, determine the market values of their clients’ properties, list and show properties, communicate with sellers about offers, and assist with the offer process.

How brokers get paid
Like real estate agents, brokers receive a commission once a sale is completed. Their amount is listed in the contract between the broker and the buyer or seller. The listing agreement or listing contract generally specifies what percentage of the sale goes to the broker.

Realtors
A Realtor is a real estate professional who is a member of the National Association of Realtors (NAR). To become a member, a real estate professional must agree to abide by the association’s standards and uphold its code of ethics.1

Although the word “broker” is often confused with that of “real estate agent,” the designation is open to a variety of professions in the real estate industry, including:

Residential and commercial real estate broker
Sales representative
Real estate manager
Appraiser

As of August 2020, the association recorded more than 1.4 million members nationwide, 65% of whom were licensed sales agents.2 Another 22% were brokers and 15% held broker associate licenses.3 Anyone who is part of the association is entitled to use the broker designation as part of their name. However, it cannot be used to denote the professional’s license status.

Brokers should be experts in their field regardless of their role and, as noted above, should be bound by the Association’s Code of Ethics. Brokers are expected to be honest and transparent with their clients and avoid exaggeration and misrepresentation. Likewise, brokers are expected to conduct business with the best interest of their clients in mind.

Special considerations
Perhaps the biggest difference between the three is that a broker can work independently, while an agent must work under a licensed broker. So when you work with an agent to buy or sell your home, you are actually working with someone who is employed by a real estate broker. In effect, you are hiring the agency to help you through the process, with the agent acting as a representative of the company.

Licensing
Every real estate professional is subject to regulations. Real estate agents and brokers in the U.S. are licensed by each state, not the federal government. Each state has its own laws that define the types of relationships that can exist between clients and brokers, and the duties of brokers to clients and members of the public.