What’s the difference between a real estate broker vs agent? Whether you’re considering a career in real estate or thinking of advancing your career from an agent to a broker, knowing the roles of brokers and agents can help you make informed decisions. I’ll discuss the differences between an agent vs a broker, their qualifications, and professional responsibilities. Let’s begin!
Key Takeaways
- Real estate agent: A licensed expert who helps clients buy and sell property.
- Real estate broker: A licensed real estate expert with more experience and education who can practice real estate and supervise agents.
- Associate broker: A broker who can work independently or as part of a brokerage but usually doesn’t supervise other agents (although they may have the legal standing to do so).
- Managing broker, supervising broker, or broker-in-charge: All licensed real estate professionals (including agents) are known as brokers in some states. In that case, these terms mean the same thing as “real estate broker.”
- Realtor: Any professional active, dues-paying National Association of Realtors (NAR) member.
What Is a Real Estate Agent?
A real estate agent is a licensed professional representing and assisting buyers and sellers in real estate transactions. Agents act as the middleman between parties, helping clients through to the finish line. They are usually associated with brokerages and work under the supervision of a licensed broker. If you’re considering getting your license, read our article on the pros and cons of being a real estate agent.
Requirements to Become a Real Estate Agent
Each state has a different set of requirements, so it’s best to read our guide on how to get your real estate license. But in general, real estate agents must:
- Be at least 18 years old
- Be a legal resident of the United States
- Complete their state’s required prelicensing hours at an accredited real estate school*
- Pass their state’s real estate license exam
- Pass a background check
- Work under a sponsoring real estate broker
- Complete their license application and pay all associated fees
- Maintain their license through continuing education courses as required by the state
*Some states exempt those with a real estate or law degree.
What Real Estate Agents Do
While many agents get some support from their brokers through marketing and lead generation, most agents operate as small business owners. They are independent contractors responsible for virtually every aspect of building their real estate business until they become successful agents. Some responsibilities of agents include:
- Leveraging social media and other digital platforms to generate leads
- Guiding and advising clients on market conditions, property prices, and mortgages
- Conducting comparative market analyses to determine property values
- Preparing properties that will go on sale by taking photographs, increasing curb appeal, and staging homes
- Promoting properties for sale or rent by creating listings
- Hosting open houses to market their listings further
- Helping buyers find properties that meet their criteria
- Negotiating prices, closing costs, and other terms of sale or lease on behalf of clients
- Managing real estate transactions
- Networking to meet more potential clients
Unlike many other professions, real estate agents do not receive a fixed salary. Instead, agents earn their income through commissions. This commission is a percentage of the property’s sale price and is only paid when a transaction is completed. Therefore, an agent’s income can vary significantly based on the number and value of properties they help buy or sell.
As real estate agents, you should be knowledgeable about commission splits, or the percentage of your commission and your brokerage’s after a transaction. Some firms use a 50/50 commission split, while some use the 70/30 or 60/40 split options.
Types of Real Estate Agents
Various types of real estate agents play an important role in the industry. Understanding these roles can help you choose which path you’ll take.
- Seller’s agent or listing agent: Seller’s agents represent the homeowner when selling their property. They prepare listing presentations to get clients, market the property, negotiate offers, and assist the seller through closing.
- Buyer’s agent: Buyer’s agents represent the homebuyer by helping them find properties and negotiate the best deal possible. As a first step, they usually provide a buyer’s questionnaire to understand clients and their needs better.
- Dual agent: Agents who act as buyer and seller agents on the same transaction are considered dual agents. However, dual agency is illegal in some states because it can create a potential conflict of interest. In states where it is legal, it must be disclosed and agreed upon in writing.
- Commercial agent: Commercial agents specialize in business properties like office buildings, retail spaces, and industrial properties. They handle all transactions involving acquisitions, sales, and commercial real estate leases.
- Leasing agent: Besides representing buyers and sellers, leasing agents can represent tenants or landlords. They are responsible for marketing rental properties, finding tenants, helping buyers find rentals, conducting showings, and handling lease agreements.
Remember that some states, like Colorado and North Carolina, call their licensed salespeople “brokers,” although they have only the qualifications of a real estate salesperson. The states that call their salespeople “brokers” typically designate the difference between a broker and a more experienced and educated broker by calling them “managing broker,” “designated broker,” or “broker-in-charge.”
What Is a Real Estate Broker?
A real estate broker is an agent with more experience, education, a higher-level license, and the ability to supervise agents. Brokers have more in-depth industry knowledge and are licensed to start their firms. Additionally, brokers have more responsibilities and liabilities than the agents who work under them.
Requirements to Become a Real Estate Broker
Since the requirements vary by state, you may want to begin by reading our guide to getting a broker’s license. Each state requires a different amount of experience as a real estate agent. Michigan, for example, requires three years of experience, while Texas insists on four years of experience within the last five years.
Additionally, some states specify that you must have completed a certain number of transactions. Therefore, all real estate brokers must:
- Have worked as a real estate agent for a certain number of years, depending on their state’s requirements
- Complete their state’s broker prelicensing courses
- Pass their state’s real estate broker license exam
- Complete their broker license application and pay all dues
What Real Estate Brokers Do
If they still practice real estate, brokers perform similar tasks as agents. However, since brokers have higher education and experience, they can work independently, start their brokerage, and hire other agents. These extra opportunities allow them to handle more intricate real estate deals and guide clients and the agents they supervise.
In addition to all the responsibilities of agents, brokers are also in charge of the following:
- Managing the day-to-day operations of their brokerage, including recruiting more agents and staff, marketing, and financial management
- Overseeing the activities and transactions of real estate agents working under them
- Handling more complex transactions
- Coaching and training less experienced agents
Types of Real Estate Brokers
Sometimes, the types of real estate brokers can get confusing. Each type has varying responsibilities. Here’s how to differentiate between the three:
- Principal or designated broker: Designated brokers own and operate their brokerage firm. They are well-versed in real estate laws and ensure their agents comply with all state and national laws and regulations.
- Managing broker: Managing brokers oversee the firm’s daily operations, including onboarding, coaching, and training new agents and administrative staff.
- Associate broker: Associate brokers have their licenses but opt to work under another broker instead of starting or running their brokerage.
Differences Between a Real Estate Broker vs Agent
The main difference between a real estate agent vs broker is their levels of education, training, and responsibilities. Real estate agents are licensed to represent clients in buying, selling, or leasing their properties, but they must operate under the supervision of a broker.
Brokers, conversely, have more advanced training and have passed a more rigorous exam. This additional credential enables brokers to operate independently, start a brokerage, and hire agents to work under them, which agents cannot do. Real estate brokers can take on more complex transactions and provide their clients with deeper insights and strategic advice.
Although a real estate broker’s income seems relatively high compared to an agent’s, their operating costs are also high. Unlike agents who only have to invest in their business, brokers must invest in everyone’s business to succeed.
A broker’s expenses include rent, utilities, insurance, training, marketing, support staff salaries, recruitment, and brokerage software, which can add up to tens of thousands of dollars monthly. An agent, meanwhile, has far fewer monthly expenses. These usually consist of desk fees (if there are any) and lead generation, marketing, and other miscellaneous operating expenses.
Simply put, a real estate broker vs agent’s work varies in many ways. Would you want to keep being an agent? Or do you want to carry more responsibilities by upgrading to a broker’s license? Understanding these distinctions can help you determine which career path you will take.
| Differences | ||
|---|---|---|
| Education and Training |
| Same as an agent’s education, plus:
|
| Salary | ||
| Expenses |
| Same as an agent’s expenses, plus:
|
| Duties |
| Same as an agent’s duties, plus:
|
| Liability |
| Same as an agent’s liabilities, plus:
|
FAQs: Real Estate Agent vs Broker
Why is a broker better than an agent?
Brokers are better because of their advanced education and training. They understand real estate laws and regulations more deeply. They can operate independently, open their brokerage, and oversee other agents. These added responsibilities mean brokers can handle more complex real estate deals and provide more services than agents.
Is it better to hire a broker or agent?
The choice is yours! When buying or selling a house, there is little difference between hiring a broker or an agent. However, a broker may have more experience, a more extensive network, and expertise.
What do brokers do?
Like agents, brokers assist buyers and sellers in real estate transactions. Brokers also manage and supervise agents working under them while maintaining the day-to-day operations of their brokerage. Of course, more responsibilities mean higher income for real estate brokers.
Bringing It All Together
Being a real estate broker vs agent involves more than understanding all the real estate terms and jargon. It requires strong communication skills, negotiation skills, and a deep understanding of the market. Both roles demand a commitment to advanced training and education to stay current with industry trends. Ultimately, the success of brokers and agents depends on their dedication to providing the best service and building lasting relationships with their clients. Are you a real estate agent? Ready to upgrade your license and skills? Or are you a real estate broker? What makes your business successful? Share your stories in the comments!
Tell us about you so we know what to send.
