What Is the Difference Between a Real Estate Broker and an Agent?
What is a real estate broker?
There are many types of real estate professionals, and knowing the role of each type of professional can save you some confusion during the home buying or selling process. For example, some real estate agents add titles and certifications after their names to help them stand out in a crowd. They might be associates, real estate consultants, salespersons, independent brokers, or REALTORS®—but they are all licensed to sell real estate.
There is some nuance, though. Real estate brokers can work as agents, but agents can't work as brokers unless they have a broker's license. Learn more about the similarities and differences between these titles.
- There are many different types of real estate professionals, but their roles vary.
- Real estate brokers are licensed to own their own firm, and real estate agents are the people who work under them as licensed representatives.
- REALTORS® are brokers or agents who are officially designated members of the National Association of REALTORS®.
- Other agents represent specific parties in a purchase contract, such as seller's agent, buyer's agent, or dual agent.
What Is a Real Estate Broker?
A real estate broker is a step above a real estate agent. A broker generally has more training and subject-matter education than an agent, but not always. A real estate broker can work independently or hire real estate salespersons to work under them. The exact rules can vary from state to state, but most have similar requirements.
Most states maintain a website where consumers can look up an agent's name, get a license number, and check on any violations filed against them.
In California, for instance, a broker's license is required to work by yourself. Agents have to work for brokers, but a broker can run their own business. There are three ways to get a broker's license in California:
- If you have a four-year college degree with a major or minor in real estate and have completed eight college-level real estate courses, you may 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 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 a higher standard of knowledge.
What Is a Broker Associate?
A broker associate is a real estate broker who works for another real estate broker or a brokerage firm. Although brokers could work for themselves, 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 aren't real estate brokers. A real estate agent cannot work independently; they must work for an employing broker. Brokers are responsible for their real estate agents' actions.
Requirements for a real estate salesperson license 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.
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 agents owe a fiduciary responsibility to the seller under a listing agreement and must protect that interest. In other words, the agent must put your interests first.
What Is a Buyer's Agent?
A buyer's agent is known as a selling agent (not be confused with a seller's agent), a buying agent, or, in some states, an exclusive buyer's agent.
Exclusive buyer's agents never work for sellers. However, many agents work with both sellers and buyers, although not usually in the same transaction. Buyer's agents may or may 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 two agents are involved—a listing agent and a buyer's agent—so long as both agents work for the same broker. In that case, the real estate broker becomes a dual agent. 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. They don't represent either party. Instead, they simply facilitate the transaction.
The Bottom Line
Knowing the types of real estate professionals can help you make informed decisions. For example, when you hire a real estate agent, you may want to dig into the real estate broker's reputation as well, since that's who the agent works for. You may prefer to work with a REALTOR® since they're held to a high ethical standard. Regardless of the type of professional you work with, confirm that they are appropriately licensed and have an excellent reputation.