There are several types of real estate professionals, and understanding the role of each can spare you some confusion when buying or selling a home. Real estate agents and brokers are titles that are commonly heard. Brokers can work as agents, but agents can't work as brokers, at least not unless and until they have a broker's license.
- There are many types of real estate professionals, and their roles vary.
- Real estate brokers are licensed to own their own firms, and real estate agents are the people who work under them as licensed representatives.
- Brokers and agents can represent specific parties in a purchase contract, such as the seller, the buyer, or both in a dual capacity.
What's the Difference Between a Broker and an Agent?
|Real Estate Broker||Real Estate Agent|
|Can work independently and own their brokerage||Must work for and under the supervision of a broker|
|Must pass a broker's exam||Can usually qualify with a few college-level courses|
A real estate broker is a step above a real estate agent and often has more training and education than an agent. A real estate broker can work independently or hire real estate agents to work under them. The exact rules can vary from state to state, but most have similar requirements.
Agents are licensed salespersons, but they aren't brokers. A real estate agent can't work independently; they must work for an employing broker. Brokers are responsible for their real estate agents' actions.
Requirements for acquiring a real estate salesperson's license vary from state to state.
Becoming a Broker
A broker's license is required to work by yourself as an agent. Using California as an example, you can get a broker's license in one of three ways.
- You can qualify to take the broker's real estate exam if you have a four-year college degree with a major or minor in real estate and if you've also completed eight college-level real estate courses.
- The California Bureau of Real Estate requires that you have at least two years of real estate sales experience and that you have completed eight college-level real estate courses if you don't have a four-year degree.
- Lawyers who have been admitted to the bar are exempt from the college-level course requirements, but they must still pass the exam.
The broker's exam is generally longer and more difficult than an agent's or salesperson's exam. Brokers are held to a higher standard of knowledge.
Becoming an Agent
Using California as an example again, 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.
Other Real Estate Professionals
Agents can specialize in a variety of areas, and both brokers and agents can take the extra step to become Realtors.
What Is a Realtor?
The title means that the individual belongs to the National Association of Realtors (NAR), and that they subscribe to its extensive code of ethics and pay annual dues.
All Realtors are agents or brokers, but not all agents or brokers are Realtors.
NAR members 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. They owe a fiduciary responsibility to the seller under a listing agreement and must protect that interest above their own.
What Is a Buyer's Agent?
A buyer's agent is known as a selling agent (not to 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. 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 in the same transaction. Dual agency can happen even if two agents are involved—a listing agent and a buyer's agent—if both agents work for the same broker. The real estate broker becomes the dual agent in this case. Dual agency is not legal in all states.
What Is a Transaction Agent?
Listing agents might find themselves in the position of writing an offer for the buyer in states where dual agency isn't permitted. These agents can elect to use a transaction agent who doesn't represent either party. Instead, they simply facilitate the transaction.
What Is a Broker Associate?
A broker associate is a real estate broker who works for another real estate broker or for a brokerage firm. Although brokers can work for themselves, many choose to join with larger real estate networks. Some pay a flat fee to the employing broker, and some earn a percentage of each transaction.
The Bottom Line
Knowing the types of real estate professionals can help you make informed decisions when you're buying or selling a home. You may want to look into the real estate broker's reputation when you're hiring an agent, because that's whom the agent works for and who is responsible for actions the agent takes.
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.