You’ve probably heard both terms before – real estate agent and real estate broker. Some people use them interchangeably, as if they mean the same thing. There is, however, more than meets the eye in the real estate world and you might be surprised to find that real estate agents and brokers aren’t the same.
Real Estate Professionals
There are actually several different terms that can be used to identify those working in real estate. The most common are real estate agent, REALTOR ®, real estate broker, real estate salesperson, and real estate associate broker.
A real estate agent is someone who has fulfilled the educational requirements set forth by his state in order to become a licensed to work in the business. The educational requirements vary from state to state but most require a minimum number of course hours as well as state-mandated examination. A real estate agent may also be referred to as a real estate salesperson. A real estate agent who has become a professional member of the National Association of REALTORS ® may also call himself a REALTOR ®. Anyone who gives real estate advice must have a real estate license.
A real estate broker always starts out as a real estate agent but then takes additional classes and exams to earn a broker’s license. Each state has additional educational requirements for brokers.
So what’s the difference?
A real estate agent is allowed to give real estate advice and act as a salesperson, but he can’t work alone. He has to be employed by a broker or brokerage, who is then responsible for the agent’s actions and ethical values in sales. Some real estate agents pay a flat rate to the broker while others end up paying a percentage of their commissions or sales to the broker.
A real estate broker can work on his own or may start his own brokerage firm and begin working with other real estate agents.
More Confusing Terms
You’ll probably hear a few more terms while you look for an agent or broker:
A real estate associate broker is a broker who chooses to work as an agent for another broker.
Both an agent and a broker can use the REALTOR ® symbol, as it merely represents membership in the aforementioned organization.
A listing agent represents the seller while a buyer’s agent represents the buyer. Most agents can play both roles (not in the same transaction), but some agents prefer to choose one or the other as their career focus. These roles can be played by agents or brokers.
Confused? Don’t worry – a lot of people are. Make sure you talk to your real estate agent or broker about his role in your selling or buying process and question anything you’re not comfortable or clear about. It’s your right to understand the relationship and transparency is key to a successful sale (or purchase)!