What Is the Difference Between a Real Estate Broker and an Agent?
When it comes to the real estate profession, there is always a slight confusion between the terms agent and broker. You might have come across or worked with either one or maybe even both categories of professionals. Now before we dive into why there are two terms and what exactly are the differences, let us get a bit more clarity about the real estate business.
In 2019, before the pandemic, according to the statistics from the National Association of REALTORS®, the figures for existing homes sales was 5.34 million and for newly constructed homes was 682,000. Now in the initial months of the pandemic, the real estate market did witness a slow down similar to all other fields. Surprisingly from the second half of 2020, there was a resurgence in the housing market. Both home sales and home buying recorded a rise as people started relocating, working remotely, moved closer to families, etc. The numbers are predicted to grow in 2021.
Now what all these future homeowners and homebuyers require is the assistance of a professional. According to the data released by ARELLO — Association of Real Estate License Law Officials currently, in the United States, there are around 2 million active real estate licensees.
So, if you are someone who is considering becoming a real estate agent, start right away without any worries. We will help you understand the difference between a broker and an agent, what you need to become one, and the procedures to follow Let’s understand each professional title one by one. The first step for your career in this field is to become an agent.
What Do We Mean By A Real Estate Agent?
The real estate agent is the job title that is given to a professional who will be working with people and assist them in the buying and selling of properties. In simpler terms, it is someone who will be helping the seller sell the house and the buyer find a new home. The real estate agent has to deal with a large number of clients (buyers and sellers both), organize open house events, and work out ways and strategies to sell the property at a profitable deal. If you aspire to become a real estate agent, then you must understand that you have to enroll and undergo a series of classes and take real estate examinations. Once you have cleared the real estate examination, you would be provided with the license by the state government. Remember, your license is valid primarily in the state where you have appeared for your licensing test. However, certain states have an agreement of reciprocity which permits the agents to work in the states who have signed the agreement.
The license gives them the authority to work independently as a real estate agent. The main source of income for the real estate agent is through the commission they get from the property purchase or sale.
Agents who represent buyers are referred to as buyer's agents. Those who represent sellers are known as listing agents.
Both sets of agents earn through commissions — a percentage of the final sale price. As a real estate agent would be working for either a real estate broker or agencies, the commission is negotiable.
In the initial days in the real estate business, you would be learning a lot of things and gaining experience working with different types of people before you can actually kick-start your career and take it to the next level.
What Are The Requirements To Become A Real Estate Agent?
The requirements for becoming a real estate agent differ in each state. Every state has a different level of examination, and only after clearing them with a good score can you officially call yourself a real estate agent. You need to take up the licensing examination provided by the state. So you need to ensure all the specific guidelines are being properly followed. Besides that, there is a set of general rules, which are applicable to real estate agents in all states.
- The candidate must be at least 18 years or above to enroll for the real estate examination.
- The candidate must be a legal or official resident/citizen of the U.S.
- It is essential for the eligible candidate to attend the state’s required pre-licensing classes specified by the state.
- The candidate must take up the required tests as well as pass them with a good score to get the authorization for the state real estate license.
- The candidate must provide perfect background information to the legal authorities.
What Are the Roles And Responsibilities Of The Real Estate Agent?
Well, a real estate agent has a lot of responsibilities and roles to fulfill and become a successful real estate agent. The following are the most important responsibilities that a real estate agent needs to fulfill in order to build a strong reputation in the market.
Being a real estate agent, you would have to initiate the dealing with the real estate property, organize the entire transaction, and make sure everything goes perfectly. (The transaction can also take place between the house owners and renters).
A real estate agent has to fulfill the responsibility for conducting different offers and counteroffers, which happen between the buying and the selling party. A real estate agent would also have to resolve the queries that might crop up while making the offers and counteroffers.
Once the negotiation work is completed, the real estate agents of the buying, as well as the selling party, need to work out the paperwork and documentation to complete the entire process legally.
A real estate agent has to guide the sellers/buyers through the process so that there is no dispute between the parties. While offering guidance, the real estate agent must explain to the client about the home inspection, status of the local real estate market and listing of the real estate property, the closing date, etc. In simple words, agents will make sure that the client does not face any difficulty throughout the process.
What Exactly Do A Listing And Buyer's Agents Have To Do?
The Listing Real Estate Agent: The listing real estate agent works with the sellers and is responsible for listing the residential portion of the listing portals, setting up the asking price of the houses, provide suggestions to the sellers to increase the value of the house, provide support with the home staging process, and provide knowledge about the seller’s market, negotiate the prices of the house, prepare the paperwork.
The Buyer’s Agent: The real estate agent who represents the buyers is called the buyer’s agent. They are responsible for searching the real estate properties for the buyers, conducting and scheduling the home tours, negotiating with the seller’s agent, conducting the home inspection before finalizing the house. Besides this, they also need to possess knowledge about the local buyer’s market, prepare the document for the buying process and complete the entire transaction without any hassle. The best aspect of being a real estate agent is that they can act as a buyer’s agent or a seller’s agent, but making sure that this doesn’t happen for the same transaction. This is because it will lead to a conflict of interest.
In What Way The Real Estate Agents Get The Income Or Payment?
Besides the commission that the real estate agents earn from the sale of the property, they also get income by working with real estate brokers or real estate agencies. The more the number of leads they bring to the business or firm, the more income they receive.
Now once you have been a real estate agent for a few years (the average requirement in most states in the US is 3 years), you can start considering upgrading your skills and switching up to becoming a real estate broker. It is a higher position, which comes with more responsibilities and better remuneration.
What Do We Mean By A Real Estate Broker?
Being a real estate broker means that you have taken a step ahead in your career. The responsibilities of a real estate broker are far more complex than those of a real estate agent. Even the education level of the real estate broker is more than the real estate agent. To become a real estate broker, a candidate needs to increase the level of education by enrolment in higher studies and also taking an examination that would help them to qualify as a real estate broker. The license exam is again provided by the state governing bodies, Once a candidate clears the advanced exams, they are ready for the role of real estate broker.
After meeting all the requirements for being a real estate broker, you will have the authority to work independently or with different real estate agencies if you want. You can either opt for selling the real estate properties or even open your own brokerage firm/agency. If you wish to set up your own brokerage firm, you will have to manage the property dealings, hiring and supervising other agents.
When compared to real estate agents, real estate brokers have more flexibility and freedom to enhance their career paths. They have the required experience as well as the qualification to work independently and maintain a work-life balance. When you obtain the license of a real estate broker, you can also opt for property management.
Now that you are aware that to become a real rate broker you require both higher education and significant agent experience, do not fret about it being difficult. Remember, unlike a real estate agent, you should know that you will also have multiple sources of income.
You will not just rely on the commission from the property sale. Your career path gives you the opportunity to opt for different commissions and get the benefits from each source. The people who are aspiring to become a real estate broker must know that it is essential to work hard for higher education level and clear the exams, but in the end, the hard work and dedication will pay off.
What Are The Requirements To Become A Real Estate Broker?
The candidate must be at least 18 or above.
The candidate must be an official/legal citizen of the country.
The person aspiring to become a real estate broker must have completed a high education and take up the exam for the real estate broker that is specified by the state.
They must already have experience as a real estate agent that will provide them the authorization to take up further studies and examinations.
The candidate must provide perfect background information to the legal authorities.
Once all the requirements are fulfilled, you can kick-start your career as a real estate broker.
What Are The Roles And Responsibilities Of A Real Estate Broker?
Well, the general roles and responsibilities of a real estate broker are quite similar to that of real estate agents, but there are certain things that only a real estate broker is allowed to do and not a real estate agent. The network of the real estate broker is stronger than the real estate agent. The real estate broker works with both sellers as well as buyers. They are helpful in selling the properties and even buying them. They have a great understanding of the local and national real estate market and how the changes in both markets have a huge impact on the sale of the properties. In the case of real estate broker job titles, there are three different types of real estate brokers, and all three have varying degrees of responsibility:
Responsibility of Associate Brokers: These real estate brokers have the license to work independently. Thus they have the flexibility to choose to work under another experienced real estate broker or not. Usually, these associate real estate brokers are not liable to supervise other agents.
Responsibility Of Managing brokers:These real estate brokers would be assigned to oversee or monitor the real estate transactions and focus on the daily operations, which take place in the office. They have the authority to hire real estate agents, train the new agents, and manage administrative staff.
Responsibility Of Principal/designated brokers: The real estate brokers are designated to supervise real estate agents and ensure that their work is in compliance with the standards set by the state and national real estate agencies.
So, after going through all this information, you can easily understand the difference between a real estate agent and a real estate broker. Now, if you are someone who is planning to enter this field, you can embark on your dream to become a successful real estate agent. However, if you are already a real estate agent, may it is time for you to put in some extra work and become a real estate broker.