Real Estate Agents Vs. Brokers: What Is the Difference?

The real estate industry is full of professionals who aid in overseeing and completing transactions. As a prospective housing investor, you have probably come across titles like a real estate agent and broker. These two terms refer to professionals who assist you in buying, selling, or renting a real estate property. However, they have distinct differences that define their responsibilities.

So, are you planning to invest in the housing market, but don’t know which professional to seek guidance from? Or, are you aspiring to start your real estate business but unable to choose the right career path? Here is all you should know about real estate agents and brokers.

Who Is a Real Estate Agent?

A real estate agent is a licensed individual who assists with and completes real estate transactions. They are usually the first point of contact for people looking to buy, sell, or rent properties. In short, real estate agents bring the buyer and seller together and help in handling complex transactional issues for their clients.

Real estate agent qualifications vary by state or federal laws. However, their common requirements include:

• Be at least 18 years old.
• Completing the state’s required pre-licensing class.
• Passing the state real estate licensing exam.
• Completing a background check.
• Taking continuing education classes required to maintain their license.
• Be sponsored by a licensed real estate broker.

What Does a Real Estate Agent Do?

Real estate agents act as a vital link between homeowners and buyers or renters. While their responsibilities differ among the markets and their clients, some of their primary duties include:

• Providing homebuyers with valuable information about the property, including their comparative analysis and the best neighborhoods to buy in.
• Connecting buyers with mortgage facilities and assisting with the pre-approval process.
• Assisting sellers and buyers with final paperwork or closing process.
• Negotiating home repairs and replacements on behalf of buyers or sellers as requested by home inspectors or appraisers.
• Marketing properties on behalf of sellers. This includes creating listings on Multiple Listing Service (MLS), staging properties, and using their marketing techniques to attract potential buyers.

Types Of Real Estate Agents

A real estate agent can act as a buyer’s or seller’s representative. However, in some cases, an individual can shift their primary role and act as an intermediary between buyers and sellers. Therefore, based on their clients and their responsibilities, here are the three primary real estate categories:

Selling Or Listing Agents

Selling or listing agents represent property owners or current occupants planning to sell or list their properties. They handle all the property listing and marketing processes and interact with buyers or buying agents on behalf of the owners. Some of their primary duties include:

• Researching property market prices before setting a reasonable asking price for their property.
• Listing the property on MLS and other marketplaces.
• Meeting with buyers or buying agents to discuss the seller's offer.

Buying Or Buyers’ Agents

Buying or buyers’ agents represent people who want to invest in, rent, or buy real estate property to live in. Their primary role is to connect potential buyers with property owners. However, besides relocating, assessing, and negotiating property prices, buying agents also:

• Consult investors or buyers to know what they want in a real estate property.
• Review listings and contact selling agents to get vital information about the property.
• Give buyers personalized guidance on the best financing options to choose from.
• Prepare relevant documents for buyers, including sales agreement, pre-approval certificate, and purchase offer.

Dual Agents

As the name suggests, dual agents represent buyers and sellers at the same time. A dual agency is common when two agents from the same company represent the buyer and seller of the property. Also, depending on their arrangement, dual agents can take all the responsibilities of the buying and listing agents. However, they work under strict rules, which explains why some states do not support dual agency.

Who Is a Real Estate Broker?

A real estate broker is a licensed individual with additional educational and professional experience beyond that of a real estate agent. A real estate broker must pass the broker license exam to obtain a state real estate operating license. That means they have to go through vigorous testing than real estate agents to become licensed.

It is vital to note that most brokers work as real estate agents before taking more licensing classes. This allows them to own and manage their brokerages or real estate agencies. Also, while most of their duties are similar to those of real estate agents, brokers have more advantages over agents, including:

• Managing real estate agents. Brokers are responsible for managing the activities of real estate agents affiliated with their brokerages. They also provide guidance, training, and support to agents.
• Facilitating transactions. Brokers directly handle complex, high-value, or unique transactions for their agents.
• Managing business operations. Brokers oversee the day-to-day operations of their firms, including financing, marketing, and developing the business.

Types Of Real Estate Brokers

Real estate brokers also come in three primary types based on their responsibilities. These include:

Associate Brokers

Associate brokers have broker licenses but choose to work under another broker. Despite having more training and experience, associate brokers work as real estate agents as they build their brokerages or portfolios. However, unlike real estate agents, associate brokers can work independently if they want.

Managing Brokers

Managing brokers control the day-to-day activities of a real estate firm or brokerage. Their duties include hiring, training, and supervising real estate agents. They also ensure the agency complies with all the legal requirements, and that agents document client interactions and transactions properly.

Designated Or Principal Brokers

A designated or principal broker typically owns a brokerage and ensures the firm complies with all relevant state and federal laws. In short, they take all the legal responsibilities of their real estate agents. As the highest-ranking real estate official, a principal broker often collects a percentage of each agent’s commission.

Real Estate Agent Vs. Broker: Which Is the Right Career Path?

If you are planning to get your foot into the real estate business, the first challenge is probably choosing between a real estate agent and a broker. Both careers allow you to create a link between the property buyer and seller. However, before choosing your career path, you need to understand what makes one better than the other.

That said, here are the key differences between real estate agents and brokers:

• Qualification requirements: Real estate agents require less training and experience to qualify. On the other hand, brokers need to pass vigorous training and coursework to obtain a real estate broker license before they start working.
• Primary responsibilities: Real estate agents have fewer responsibilities, particularly representing their clients’ interests. Whereas, brokers have more responsibilities of maintaining buyers’ and sellers’ satisfaction, managing real estate agents, and ensuring their firms comply with federal and state laws.
• Access to career options: Brokers have access to more career options than real estate agents. That means they can easily transition into property managers or become the top real estate legal advisors.
• Payment options: Real estate agents only get paid through commissions, which they split with their brokers and other agents. Whereas, brokers have more payment options, including commission and desk fees.
• Work freedom: Brokers have more work freedom than agents. For instance, brokers can schedule their working hours or employ agents to work for them. On the other hand, real estate agents cannot work independently without being under a brokerage.

The Bottom Line

Starting a real estate career is somehow challenging for beginners. Luckily, you can make an informed decision once you understand the difference between real estate agents and brokers, as discussed above. Remember, no profession is better than the other. It all depends on your qualifications and career preferences.