Real estate broker vs. agent: Differences explained

Working with a professional you can trust is important, whether you’re buying or selling a home. You can choose between real estate agents and real estate brokers. Both are licensed, but the difference lies in the types of key responsibilities they have.

Real estate agent vs. broker: What’s the difference?

Real estate agents and brokers are both licensed professionals who can help buyers and sellers. The difference is the type of tasks allowed by their respective licenses. A real estate agent helps clients through the closing process, whereas a real estate broker can complete tasks to ensure that the transaction is legally binding.

What is a real estate agent?

A real estate agent is a licensed professional who represents the home buyer and seller, and assists with the selling and purchasing of property. They use their expertise of the local market and other skills like negotiating contracts to help their clients close on a home.

Licensing requirements for real estate agents

The process to become a licensed real estate agent will vary from state to state. In most cases, states require that the professional completes a prelicensing course and passes a licensing exam.

Once these requirements are met, the real estate agent needs to activate their license and join a brokerage. Real estate agents need to operate under a licensed real estate broker.

What real estate agents do

A real estate agent can help you when buying or selling a house. The professional’s responsibilities differ depending on whether you’re buying or selling a home. Some of their responsibilities include:

• Providing buyers with information about properties and neighborhoods
• Connecting sellers with qualified home buyers
• Sharing listings with buyers via the Multiple Listing Service (MLS)
• Connecting buyers with sources like mortgage lenders to get a preapproval for a home loan
• Assisting clients with negotiating the purchase contract, including the offer, home inspection, and appraisal
• Guiding clients with necessary paperwork and the overall closing process

Types of real estate agents

There are three main types of real estate agents. A listing agent is a professional who helps homeowners sell their home while representing their interests. For home buyers, a buyers agent represents them during a real estate transaction, including helping them put offers on homes. Though not common, a dual agent represents both the home seller and buyer on the same purchase contract.

How real estate agents get paid

Real estate agents are paid on commission, and are paid a percentage of the home’s sale price each time they help someone successfully buy or sell a home. The buyer and seller are able to negotiate the commission the real estate agent will receive.

What is a real estate broker?

A real estate broker is a real estate agent who has passed required testing and gotten a license to practice independently or manage their own real estate firm. This professional can also oversee transactions of real estate agents who work under their own firm.

Some brokers may also be attorneys, called real estate attorney-brokers. Licensing requirements may differ by state for these professionals.

Licensing requirements for real estate brokers

Real estate brokers typically need to gain experience as agents first, then complete a state-approved broker course. Then, agents need to pass the broker exam. This additional licensing is for agents who want to work independently or be able to operate their own brokerage firms.

What real estate brokers do

Brokers can complete and assist clients with the same types of tasks that real estate agents do. Thanks to their additional licensing, they can also take on some of these responsibilities:

• Transfer money in and out of an escrow account
• Manage a real estate firm and hire real estate agents to work under them
• Mediate conflict in a legal dispute

Types of real estate brokers

Like real estate agents, there are also three types of brokers. An associate broker is typically hired by larger brokerages to help with administrative tasks. A managing broker has more responsibilities and handles the day-to-day operations of the brokerage they work for. Or, someone can be a principal or designated broker, who is responsible for overseeing the operations and real estate transactions within the firm.

How real estate brokers get paid

Real estate brokers also get paid by commission, like agents. The difference is the type of commission. Brokers can collect a percentage of the commission earned from the real estate agents under their firm. Or, they can keep all of the commission through working directly with a buyer or seller.

What is a REALTOR^®?

A REALTOR® is a real estate agent or broker who is a member of the National Association of REALTORS®. REALTORS® need to adhere to a strict code of ethics, which means these professionals tend to be held to higher professional and ethical standards in real estate transactions. 

Should you work with a real estate agent or broker?

Working with either type of professional is fine, as both real estate agents and brokers can help you buy and sell a home. Even if a real estate agent can’t do certain administrative tasks like moving money to and from an escrow account, that agent is still under a brokerage firm. The key aspect when deciding is to be sure that you trust this person to work in your best interest and has the experience you want.

The bottom line: Both real estate agents and brokers can help you

Although real estate brokers and real estate agents differ in the type of tasks they can do, both are able to help their clients with their real estate transactions. A broker may be more experienced, but a real estate agent can be just as valuable and trustworthy in helping.

Whoever you decide to help you with buying a home, you can feel more confident knowing how much home you can afford. Start the mortgage approval process with the home loan experts at Rocket Mortgage®.