What’s The Difference Between Agent Vs. Broker?
Both real estate agents and brokers are licensed to help you with real estate, but is there a difference between agent vs. broker? In some states, they are interchangeable as a real estate broker is at the same level as a licensed real estate agent. In others, like here in Montana, brokers must have at least two years of experience and then pass a broker’s exam.
Let’s talk about some of the differences between agents and brokers.
Understanding the Differences: Real Estate Agent vs. Broker
Though both agents and brokers can help you with your real estate transactions, we thought we should highlight some fundamental differences in responsibilities.
Real Estate Agents
A real estate agent is a person who has taken and passed all required real estate classes, plus they have also passed the real estate licensing exam in the state they want to work in. For those just getting started in real estate, this is the most encompassing of the titles. You might also hear agents called real estate “associates.”
An agent can represent both buyers and sellers with their real estate transactions. Buyer’s agents will collect a wishlist from their clients and try to find a home that matches their wants and needs. On the other hand, a seller’s agent will list a home on the market for their client and try to solicit buyers.
When it comes to agent vs. broker, an agent is responsible for carrying offers and counteroffers between buyers and sellers, plus answer any questions that come up along the way. Agents work with other agents, and they also guide their clients through all of the necessary paperwork. They will ensure that their clients are aware of any and all requirements they need to complete the sale, including home inspections, closing dates, and more.
How Agents Are Paid
Real estate agents work for brokers or agencies and are typically paid on a commission, which means they receive a percentage of each property’s sale price. The higher the sale price, the higher the commission.
Responsibilities of Real Estate Brokers
When it comes to agent vs. broker, a real estate broker has continued their education past the standard entry-level. They’ve successfully passed the state broker exam and can now work independently or even employ agents underneath them. Some agents who have passed the broker exam still choose to work under a brokerage, and they are typically called real estate associate brokers. Associate brokers might share in the brokerage profits and have the potential to earn more than a typical agent commission.
Like buyers’ agents, brokers who work with buyers help them find properties that match their criteria, conduct negotiations, prepare offers, and handle any other issues that come up before the closing date.
Sellers’ brokers determine market values of each client’s properties, help list and show properties, schedule open houses, communicate with sellers about any offers, and assist in negotiations.
How Brokers Are Paid
Brokers receive a commission once the transaction has been completed, and the commission amount will be listed in the contract between the broker and the buyer or seller. Typically the listing agreement will outline how much of the percentage of the property of the sale will go to the broker.
A realtor is another real estate professional, but the distinction is that they are a member of the National Association of Realtors (NAR). To become a member, agents must agree to abide by the association’s standards and uphold its strict code of ethics. The word “realtor” is commonly confused or mistaken for “real estate agent.” However, it can be open to various professionals in this industry, including residential and commercial brokers, appraisers, property managers, and RE salespeople.
Though most real estate communities do it naturally, realtors are bound by a code of ethics where they promise to be transparent and always uphold their client’s best interests in all transactions. Usually, those in this association are experts in their field.
Key Takeaways For Agent Vs. Broker
If you skipped everything above, here’s the quick breakdown:
- Real estate agents are licensed to facilitate real estate transactions for both buyers and sellers, work underneath brokers, and are paid commissions for each sale.
- Brokers typically have more experience, are more qualified, and can work independently or have other agents work for them.
- Realtors are a part of a specific trade organization called the National Association of Realtors and can hold any position in the industry.
The significant distinction among the three is that an agent must work under a licensed broker, while a broker can work independently. So when you work with an agent at 41 Realty Group, you’re working with an agent employed by the brokerage. Essentially, you’re hiring the brokerage to help you through the process, and your specific agent is acting as the agency’s representative.
What You Need To Know About Licensing
It’s important to note that every real estate professional is subject to specific regulations. Both agents and brokers in the United States are licensed by the state, not by the federal government. Each state has its own laws for agents vs. brokers and what types of relationships can exist between them and their clients, plus the specific qualifications that real estate professions should meet.
Finding the right real estate agent that fits your needs doesn’t have to be hard. Every real estate agent is legally bound to act in your best interests, and when you work with a team like ours, you’re getting an entire group of professionals who know precisely how to help you. Ready to chat with an agent OR a broker at 41 Realty Group? We would love to help you with all of your real estate questions and needs! Get in touch with us here.