What Is the Difference Between a Real Estate Broker and an Agent?
What is a real estate broker?
There are so many types of real estate agents that even agents sometimes confuse themselves. Some agents add titles after their names to help them stand out in a crowd. They might be associates, real estate consultants, salespersons, or REALTORs®, but they're all licensed to sell real estate.
Real estate brokers can work as agents but agents can't work as brokers, at least not without a broker's license. Agents who give real estate advice must have a real estate license. Most states maintain an online site where consumers can look up an agent's name, get a license number, and check on any violations filed against him.
What Is a Real Estate Broker?
A real estate broker is a step above a real estate agent. A broker generally has more education than an agent, but not always. A real estate broker can work independently or hire real estate salespersons. The exact rules can vary from state to state, but most have somewhat similar requirements.
In California, a broker's license is required to work by yourself. Agents have to work for brokers, but a broker can run her own business. There are three ways to get a broker's license in California.
If you have a four-year college degree and have completed eight college-level real estate courses, you qualify to take the broker's real estate exam.
If you don't have a four-year degree, the California Bureau of Real Estate requires that you have at least two years of real estate sales experience and that you've completed eight college-level real estate courses.
Lawyers who have been admitted to the bar are exempt from the college-level course requirements, but they must pass the exam.
The broker's exam is generally longer and more difficult than a salesperson's exam. Brokers are held to higher standards of knowledge.
What Is a Broker Associate?
A broker associate is a real estate broker who works for another real estate broker. Although the broker could work for himself, many choose to join a larger real estate network. Some pay a flat fee to the employing broker and some earn a percentage of each transaction.
What Is a Real Estate Agent?
Agents are licensed salespersons. They're not real estate brokers. A real estate agent must work for an employing broker and cannot work independently. Brokers are responsible for their real estate agents' actions.
Requirements for a real estate salesperson license can vary from state to state as well. In California, applicants must be at least 18 years old and must have successfully completed three college-level courses in real estate. State residency is not a requirement.
What Is a REALTOR®?
A REALTOR® can be a real estate broker or a real estate agent. All REALTORS® are agents or brokers, but not all agents or brokers are REALTORS®. It's a title that means the individual belongs to the National Association of REALTORS® (NAR), subscribes to its extensive Code of Ethics, and pays annual dues. Not every real estate agent belongs to NAR.
Members of NAR also belong to state and local trade associations. Complaints against a REALTOR® can be filed with the local board.
What Is a Listing Agent?
Listing agents are also known as seller's agents because they represent the seller. A listing agent can be a real estate broker or a real estate agent. These types of agents owe a fiduciary responsibility to the seller under a listing agreement and must protect that interest.
What Is a Buyer's Agent?
Exclusive buyer's agents never work for sellers. Many agents, however, work with both sellers and buyers, although not usually in the same transaction. Buyer's agents might or might not require a buyer to sign a buyer's broker agreement, depending on local custom and law.
What Is a Dual Agent?
Agents enter dual agency when they represent both the seller and the buyer. Dual agency can happen even if there are two agents involved—a listing agent and a buyer's agent—if both agents work for the same broker because the real estate broker creates agency. Dual agency is not legal in all states.
What Is a Transaction Agent?
In states where dual agency is not permitted, listing agents might find themselves in the position of writing an offer for the buyer. These agents can elect to become transaction agents. He doesn't represent either party but simply facilitates the transaction.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.