Whether you want to buy or sell a house, you will need help. So who should you hire? Real estate professionals have various names, including real estate agent, real estate broker or Realtor®.
So what’s the difference between a real estate agent, a real estate agent and a broker?
Sometimes these titles are used interchangeably, but rest assured there are some important differences, as well as varying requirements for using particular titles.
Here is an overview of the professional real estate titles that you will come across and what they mean.
Difference between a real estate agent and a broker: what is a real estate agent?
A real estate agent is someone who has a professional license to help people buy, sell or rent all kinds of homes and real estate.
To obtain this license, states require individuals to have pre-license training. The number of hours of training required can vary widely by jurisdiction. In Virginia, for example, realtors must complete 60 hours of pre-licensing training, while in California, they require 135 hours of licensing lessons.
Upon completion of this training, aspiring agents take a written licensing exam. This exam is generally divided into two parts: one on Federal Real Estate Laws and General Real Estate Principles, the second on State Specific Laws.
Once they have passed their exam, they are licensed, the title of “real estate agent,” and they can join a brokerage where they can start working with buyers, sellers and tenants.
Watch: Buy a house? Here’s what real estate agents would like you to know
Broker vs. real estate agent, explained
A real estate broker is someone who has taken training beyond the agent level, as required by state law, and who has passed a broker’s license exam.
Similar to real estate agent exams, each state sets its own training and exam requirements for brokers. Additional courses cover topics such as ethics, contracts, taxes, and insurance, at a more in-depth level than what is taught in a real estate agent pre-approval course.
Prospective brokers also learn about legal issues related to real estate and how the law applies to operating a brokerage, real estate investments, construction and property management.
As a result, “brokers have extensive knowledge of the real estate sector,” explains Jennifer baxter, Associate Broker at Re / Max Regency in Suwanee, GA.
To pass the brokerage exam and obtain a license to practice, real estate agents must already have a certain level of experience, usually three years as a chartered real estate agent.
There are three types of real estate brokers, each with subtle differences in the role they fill:
- Principal / Designated Broker: Each real estate agency has a primary / designated broker. This person oversees all licensed real estate agents in the firm and ensures that the agents operate in accordance with national and national real estate legislation. Like realtors, prime brokers are paid on a commission basis, which is a share of the commissions of the sales agents they supervise (although many prime brokers receive an annual base salary).
- Managing broker: This person oversees the day-to-day operations and transactions of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff. (Some Prime / Designated Brokers also serve as Broker Managers.)
- Associate broker: This real estate professional, sometimes called an associate broker, broker-seller or affiliate broker, holds a broker’s license but works under the direction of a broker-manager. This person is generally not responsible for the supervision of other agents.
What is a real estate agent?
To become a real estate agent, a licensed agent with the ability to use this widely respected title, an agent must be a member of the National Association of Realtors®.
As a member, a person subscribes to the standards of the association and its code of ethics.
“Essentially, the NAR imposes a higher standard on us,” says Peggy yee, a real estate agent in Falls Church, Virginia. Membership in NAR also comes with access to real estate market data and transaction management services, among other benefits.
A listing agent is a real estate agent who represents a house seller. These professionals help clients who sell with a wide range of tasks, including pricing their home, recommending improvements or staging, marketing their home, holding open houses, coordinating visits with home buyers, negotiating with buyers and overseeing the home inspection process and closing procedures.
True to their name, Buyer’s Agents represent home buyers and help their clients through every step of the home buying process, including finding the right home, negotiating an offer, recommending other professionals (eg, mortgage brokers, real estate attorneys, settlement companies); and troubleshooting issues (eg, home inspection or appraisal issues).
Fortunately for home buyers, they don’t have to worry about the expense of hiring a buying agent. Why? Because the seller usually pays the commission for both the seller’s agent and the buyer’s agent from the listing agent’s fees.
In addition to helping people buy and sell homes, many real estate professionals help consumers find properties to rent. But what these agents do depends on the location (whether it’s a big city or a small town) and the agent.
Sometimes a rental agent will guide your search from the start, helping you find the right neighborhood, apartment size and price range, and then accompany you on open houses. Most likely, however, you will have already decided on a lot of this information and the agent will send you announcements that may be of interest to you.
Once you’ve chosen a rental and been approved by the landlord or management company, your agent should help you read and understand your lease.
“Most tenants can find accommodation without a real estate agent, but they forget to look for someone who can help them figure out what they are signing when they sign a lease,” explains Dillar schwartz, a real estate agent in Austin, TX.
Rental agents will also represent landlords to help them find tenants, but the fees an agent will charge a landlord depends on the market in which they work. In many places, the landlord pays the real estate agent to help them find a desirable tenant. In more competitive rental markets, however, the tenant may be responsible for real estate agent fees, sometimes referred to as “brokerage fees”. These fees can be as low as $ 50 to $ 75 for a credit check or application, but the most common rates are one month’s rent or 15% of the apartment’s annual rent.
Real estate agent vs broker: how do you find the right professional for you?
Many people find a real estate broker to help them by word of mouth or online. You can search for a variety of real estate professionals in your area on realtor.com’s Find a Realtor database, which includes their sales performance, specialties, reviews, and other useful information. It’s a good idea to speak to at least three people in person and ask the agents key questions to find out if they are right for you and the deal you’re looking for.
Michele Lerner contributed to this article.