It all comes down to the ownership of the brokerage firm
When you are buying or selling a house, it can be helpful to have an awareness of the roles played by the various real estate experts. An awareness of this can help you avoid some confusion. The terms "real estate agent" and "real estate broker" are frequently encountered. It is possible for brokers to also work as agents. However, it is impossible for agents to also operate as brokers, at least not before they obtain a license to practice as a broker.
- There are various subspecialties within the real estate industry, and each one performs a unique set of responsibilities.
- Real estate brokers are authorized to run their businesses, and real estate agents serve as licensed representatives for real estate brokers and are employed by them.
- Brokers and agents may represent the buyer or the seller in a purchase contract or both parties in a dual capacity. Brokers and agents can also represent both parties simultaneously.
What differentiates a broker from an agent in the real estate industry?
Real Estate Broker
Real Estate Agent
|Can engage in self-employment and operate their own brokerage
||Must be employed by a broker and operate under their direction
|Needs to pass a broker's exam
||A real estate salesperson exam must be taken and passed, and a license must be held.
A real estate broker is more advanced than a real estate agent. They typically have more education and training than an agent does. They can operate on their own or use real estate agents to assist them. The specific regulations could be different from state to state, although most have pretty similar prerequisites.
Agents have authorized salespeople, but they are not the same thing as brokers. Brokers are accountable for the behavior of the real estate agents under their supervision. Real estate agents can't operate on their own; they are required to work under the supervision of an employing broker.
The requirements necessary to obtain a license to practice as a real estate salesperson differ from one state to another.
How to become a broker?
To work independently as an agent, you are required to have a broker's license. Taking the state of California as an example, one can take three different routes to earn a broker's license:
- Suppose you have a four-year college degree with a major or minor in real estate and have completed eight college-level real estate courses. In that case, you may be eligible to take the broker's real estate exam. This exam is required to become a licensed real estate broker.
- Suppose you do not have a degree from an accredited four-year institution. In that case, the California Bureau of Real Estate requires that you have completed eight college-level real estate courses and have at least two years of experience working in the real estate sales industry.
- Although lawyers who have been admitted to the bar are excused from the need to complete courses at the college level, they are still required to pass the examination.
The exam required to become a broker is typically longer and more challenging than the exam required to become an agent or salesperson. The level of knowledge expected of brokers is far higher.
How to become a real estate agent?
Using California as an example, potential applicants need to be at least 18 years old. They must have finished three real estate classes at the college level with a passing grade. There is no condition that you live in the state.
Other occupations in the real estate industry
Agents can specialize in a wide range of fields, and both brokers and agents have the potential to advance their careers and become realtors.
Who is a realtor?
When someone has this title, it indicates that they are members of the National Association of Realtors (NAR), adhere to the NAR's comprehensive code of ethics, and pay annual dues to the NAR.
Real estate agents and brokers are not realtors, but real estate agents and brokers are all realtors.
Members of the NAR are also members of their respective state and local trade groups. One may submit a grievance over a Real Estate Agent to the appropriate local board.
Who is a listing agent?
Because they work on behalf of the people selling their homes, listing agents are also referred to as "seller's agents." A real estate broker or an independent real estate agent can work as a listing agent. Per the terms of the listing agreement, they have a duty of loyalty to the seller and must put the seller's interests ahead of their own.
Who is a buyer's agent?
Other names for a buyer's agent include a "selling agent" (not to be confused with a seller's agent), a "purchasing agent," and in some areas, an "exclusive buyer's agent." A seller's agent represents the seller of a property.
Exclusive buyer's agents never take clients who are selling a property. Many real estate brokers work with buyers and sellers, though they typically do not do so in the same transaction. Depending on the local custom and the legislation, buyer's agents might demand that a buyer sign a buyer's broker agreement. However, this is not always the case.
Who is a dual agent?
When an agent represents both the buyer and the seller in the same transaction, they are said to be engaging in dual agency. Even though two agents are participating in a transaction — a listing agent and a buyer's agent — it is still possible for a dual agency if both agents work for the same broker. In such a scenario, the real estate broker takes on the role of the dual agent. Several states do not permit dual agency.
Who is a transaction agent?
In states that do not allow dual agency, listing agents may find themselves drafting an offer on behalf of the buyer. These agents can employ the services of a transaction agent who is not affiliated with either party. They do nothing more than act as a facilitator for the transaction.
Who is a broker-associate?
A real estate broker who works for either another real estate broker or a brokerage business is working as a broker associate. Some pay the employing broker a flat fee, while others get a percentage of the proceeds from each transaction instead. Although real estate brokers can work alone, most of them choose to join more extensive real estate networks.
Real estate agent vs. real estate broker – the bottom line
When it comes to purchasing or selling a house, knowing the many real estate experts can help you make more educated selections. The real estate agent works for the real estate broker. The broker is accountable for the activities the real estate agent performs. Therefore, you must research the reputation of the real estate broker before selecting an agent.
Consumers can search up an agent's name, obtain their license number, and check for any infractions made against them on the websites maintained by most states.
Frequently asked questions (FAQs)
What kind of salaries can one expect to get working in real estate?
According to the Bureau of Labor Statistics, the average salary for real estate brokers in the United States is $86,490. The average salary for real estate agents is $61,480. Real estate broker salaries vary widely based on factors such as the geographic location of the broker's business.
How much time is required to become licensed as a real estate agent?
The time required to become a real estate agent varies from state to state. However, in Louisiana, for instance, a person must finish ninety hours of classes, receive sponsorship from a broker, and pass a real estate licensure exam. This procedure typically lasts between four and six months, depending on the circumstances.
How exactly does one earn a living as a real estate broker or agent?
Real estate agents can generate income when they effectively represent a buyer or seller in the transaction of purchasing or selling a home. Brokers also have the potential to make money in this manner and receive a cut of the commissions that agents earn. In certain brokerages, brokers may have the position of salaried workers.