What is the difference between a real estate agent and a broker? A real estate agent is licensed to represent buyers and sellers, but they must work under a supervising broker. A real estate broker has completed advanced education and licensing requirements, allowing them to work independently, manage their own firm, and hire agents. In this Redfin real estate article, we’ll explore the differences so that you can make an informed decision as you look to sell your home in Salt Lake City, or buy in Evanston.
What is a real estate agent?
A real estate agent is a professional who has passed a state-mandated course and licensing exam. This license permits them to assist clients with buying and selling property. However, this basic license requires that the agent affiliate and work under a licensed broker.
Their core responsibilities typically include:
- Showing you homes.
- Handling market research and comparative sales data.
- Negotiating on your behalf.
- Preparing and submitting official paperwork, such as offers and counteroffers.
Agents are the day-to-day contact and work to ensure your transaction is smooth and successful.
Types of real estate agents:
Real estate agents typically specialise in specific roles or client needs. Understanding the different types of agents can help buyers and sellers choose the right professional for their situation.
- Buyer’s agent: They help clients search for properties, schedule showings, make competitive offers, and negotiate contract terms. Buyer’s agents are legally obligated to act in the buyer’s best interest throughout the transaction.
- Seller’s agent (Listing Agent): Their responsibilities include pricing the home, marketing it to potential buyers, coordinating showings, and negotiating offers. Listing agents aim to secure the best possible price and terms for the seller.
- Dual agent: A dual agent represents both the buyer and the seller in the same transaction. Because the agent must remain neutral, they cannot advocate fully for either party. Dual agency is legal in some states but restricted or prohibited in others due to potential conflicts of interest.
What is a real estate broker?
A real estate broker is an agent who has further education and practical experience and has passed a separate, more rigorous broker’s licensing exam. This advanced license is essential for anyone who wants to open their own brokerage firm or work without a supervising principal.
Because a broker’s license indicates a higher level of training and expertise, the broker has more capabilities:
- Supervision: They are legally responsible for the actions and transactions of all the agents working under them.
- Independence: They can operate their own brokerage or real estate office.
- Advanced knowledge: Their additional training includes legal and ethical requirements for managing a real estate business.
All real estate transactions are legally processed through a broker, whether the client is working directly with a broker or one of their agents.
Types of real estate brokers:
Real estate brokers have additional licensing and responsibilities beyond those of agents. Some brokers work independently, while others oversee teams of agents.
Managing broker: A managing broker oversees the daily operations of a real estate office. They are responsible for supervising agents, ensuring legal compliance, handling contracts, and resolving disputes. Managing brokers may also recruit and train new agents.
Principal broker: The principal broker is legally responsible for all real estate activity conducted under a brokerage. This includes transactions, escrow handling, and adherence to state laws. Every real estate brokerage must have a designated principal broker.
Associate broker: An associate broker holds a broker’s license but chooses to work under another broker instead of operating their own brokerage. They often have more experience than agents and may take on mentoring or leadership roles within the firm.
How to choose between working with an agent or a broker
As a home buyer or seller, you must consider the difference between a real estate agent and a broker. While they share responsibilities, there are differences to consider that make the best fit for your goals. Most likely, you will start by choosing a real estate agent. When you hire an agent, you are automatically gaining access to the expertise of their supervising broker, as the agent’s work is the responsibility of the brokerage firm.
- Work with an agent when you need hands-on assistance, strong negotiation skills, and a professional who specialises in your local market. Agents are typically focused entirely on client service.
- Work with a broker if you are looking to hire a managing partner or if you specifically want to work with the principal of the firm. Some highly experienced brokers choose to work directly with clients as well.
The most important step is finding a professional, regardless of their title, who has a proven track record, understands your goals, and prioritises your best interests.
Frequently asked questions
Does a broker make more money than an agent?
A broker may have a higher potential income because they can earn a portion of the commission from the transactions of all the agents they supervise, in addition to any commissions from their own sales.
Can a real estate agent be a broker at the same time?
Yes. A professional who holds a broker’s license may choose to act as a real estate agent and work under another brokerage, or they may choose to use their broker’s license to open and run their own firm.
Is one title better than the other for a client?
Neither title is inherently “better” for a client. While a broker has more advanced training, a highly experienced and successful agent can provide just as effective service. The quality of the individual professional is more important than the level of their license.