A real estate broker is someone who is at the top licensing level of the real estate profession. It is possible for a broker to do the same things that an agent does, with one key difference: The broker can be the owner and boss of his or her own real estate company, while an agent cannot.
The roles of real estate brokers and real estate agents are closely related but distinct, mainly differentiated by the level of responsibility and the requirements to obtain their titles.
A real estate agent is a professional who is licensed to buy, sell, and rent real estate properties on behalf of clients. To become a real estate agent, one must complete a certain number of hours of real estate education and pass a licensing exam. Agents typically work for a brokerage and are overseen by a real estate broker.
A real estate broker, on the other hand, has taken education beyond the agent level as required by state laws, and has passed a broker’s license exam. Brokers can work independently, or they can hire agents to work for them. As a result, brokers take on additional responsibilities, including managing the brokerage and its agents, handling the escrow account to ensure proper handling of clients’ deposits and down payments, and they can also act as intermediaries in negotiations.
While both agents and brokers are licensed to advise on real estate transactions, brokers can also manage a real estate business. They also typically have more intensive training and expert knowledge in subjects such as real estate law and finance. Therefore, when considering a career in real estate or when seeking professional assistance in the field, understanding these differences is essential.
In most states, the broker must start out as a real estate agent. Just to become an agent, one must pass a variety of licensing exams. As an agent, the person then spends some years working under another broker. To gain the broker title, the person must also pass more exams. Each state sets specific licensing guidelines, including how long one must serve as an agent and the exact exam requirements to gain a broker’s license.
Once licensed as brokers, people can open up independent offices, hire agents, and even hire other brokers to work under them.
Brokers can do everything agents can, and can also carry out management of their own brokerage firms. Managerial duties include supervising agents’ transactions, hiring and firing agents, training new employees, and managing administrative staff like secretaries and assistants. Brokers who do these duties are called managing brokers.
A “designated broker” is specifically responsible for making sure agents are following real estate laws. This person may also manage the company.
An associate broker has a full broker’s license but works under another broker.
A REALTOR can be either an agent or a broker. The title, which is an acronym, shows that the person is a member of the National Association of REALTORS, a professional organization.
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