Buying or selling a home can involve a great deal of money, so having the right real estate professional to guide you through it all can make a big difference. Knowing the nuances between the types of professionals you’ll encounter at a real estate firm can help you choose the one who can be most helpful, whether you’re ready to buy a home or sell one.
Here’s how to tell whether you want to work with a real estate broker or a real estate agent.
What is a real estate agent?
Real estate agents are licensed salespeople who help their clients buy or sell homes. Although they are independent contractors, agents must work under a real estate broker, and are typically compensated through commissions shared with that broker.
Before they can start working, real estate agents must take classes and pass a licensing exam in the state they plan to work in. When agents first get their license, they “have to practice or begin with another individual that has received a broker’s license,” explains Jeffrey Hicks, an associate broker in Atlanta and past president of the National Association of Real Estate Brokers.
There are two main types of real estate agents: buyer’s agents and listing agents.
A buyer’s agent helps people who want to purchase a home. This means helping buyers find homes in their area, touring the home with them and helping them prepare and submit offers to purchase the home.
A listing agent or seller’s agent helps people who want to sell their home. This means pricing the home appropriately for the market; listing the home on the Multiple Listing Service, a database of homes for sale available to other agents and real estate listing websites; marketing it to potential buyers, such as by staging the home or hosting open houses; and helping the homeowners negotiate offers.
What is a real estate broker?
Real estate brokers own and manage real estate brokerages (sometimes called agencies). These firms work with a title company and others to facilitate real estate transactions and manage real estate agents. Many brokers are also licensed agents.
Like real estate agents, real estate brokers must take classes and pass an exam to get a specific license to operate. Typically, the broker exam is more rigorous than the one for agents and involves additional coursework.
There are a few different types of real estate brokers:
Broker associates are licensed brokers who typically work as real estate agents but also have the training and licensure to broker a real estate transaction. This is often the first step that real estate agents take toward advancing their career, as brokering their own transactions can increase commissions.
Designated brokers typically own or manage real estate firms and hire real estate agents to work with clients to buy and sell properties, and help their agents resolve client issues. They can also develop and offer training materials to teach their agents skills that can help them make more sales.
Broker of record
The responsibilities of brokers of record can vary from state to state, but typically they oversee the activities performed on behalf of the firm by its agents and other employees (such as office staff). This includes making sure all employees comply with real estate law; keeping accurate records; managing trust and escrow accounts, reviewing paperwork; and distributing commissions.
Managing brokers, like brokers of record, oversee the day-to-day operations of a real estate firm. They often train and mentor real estate agents and supervise the marketing and listing of homes. Managing brokers also keep an eye on legal compliance, ensuring that client interactions and transactions are properly documented and that the firm follows all relevant state laws.
Real estate broker vs. agent
As you can see, the biggest difference between real estate brokers and agents is the level of responsibility each has within a real estate firm, and what services each offer. Brokers essentially run the real estate office agents work out of, while agents work directly with clients.
What is a Realtor?
Realtors are real estate agents or brokers who are members of the National Association of Realtors (NAR). As real estate professionals and members of the trade group, they agree to follow its code of ethics.
That doesn’t mean brokers and agents working outside of the NAR are unethical, however; every licensed agent and broker must adhere to state standards.
Which should you work with?
A real estate broker and a real estate agent can provide the same level of service, so your decision might come down to the types of services you need and the amount of experience you’re looking for. In general, if you’re buying or selling a home, you’ll work with a real estate agent or broker associate.
Don’t make assumptions about experience, however. Some agents might have years in the game but have delayed getting their broker’s license or decided they don’t want one. Likewise, some brokers might have just a few years under their belts. When deciding who to work with, it can be wise to ask for testimonials from past clients to gauge their track record.