If you are new to the industry or are considering starting a career in real estate, you may have wondered what the difference is between a real estate agent and a real estate broker. When it comes to real estate, an agent and a broker do not mean the same. A real estate agent independently offers his services to a broker for a certain fee.
Commercial Real Estate Agent
Commercial real estate agents are individuals who are licensed to help people buy, sell, and rent real estate. They are ultimately responsible for bringing buyers and sellers together and are paid a commission that is usually a percentage of the property’s sale price.
Ultimately, a real estate agent is responsible for connecting buyers and sellers to facilitate the sale of the real estate or real property. Agents are industry professionals who take and pass all state-specific courses and fulfill licensing requirements. An agent is capable of representing both buyers and sellers for real estate transactions. Additionally, an agent works under a brokerage and cannot work independently.
Responsibilities of a Real Estate Agent
- Matches a Buyer’s wishlist to Available Properties on the Market
Real estate agents listen to what a buyer is looking for and attempt to find a match by targeting specific neighborhoods and evaluating the features of a property.
- Submits Offers and Negotiate
After a buyer finds a property they are interested in buying, the agent submits an offer and is capable of negotiating until terms are agreed upon by both parties.
- Finalizes Purchases
Real estate agents are responsible for guiding clients through the finalization of purchases. They complete tasks such as finalizing paperwork, facilitating repairs and inspections, and navigating the closing of the sale.
Types of Real Estate Agents?
There are four main roles of real estate agents: Buyer’s agents, listing agents, dual (or transactional) agents, and referral agents. Depending on the state, responsibilities may vary, but here’s a general overview of each agent’s role:
- Buyer’s agent
A buyer’s agent represents the home buyer. They assist the buyer through the entire process, including helping finalize the details of an offer, suggesting a mortgage lender, home inspector, or contractor, identifying new homes the client may like, going on walkthroughs of homes with the client, and helping a client decide if a home is right for them.
- Listing Agent
A listing agent represents the homeowner through the selling process. Their duties can include: helping to recommend a sales price, finding interested buyers, taking photographs or videos of the home, arranging to have the home staged, promoting the listing on real estate and social networking sites, creating print ads for the home, hosting open houses, showings or private tours, making home improvement recommendations and hiring a home inspector.
- Dual or transactional agent
In some instances, an agent may represent both the buyer and the seller essentially becoming a facilitator. Dual agency is illegal in some places and requires disclosure in others, so be sure to understand your state’s laws.
- Referral agent
A referral agent finds leads and sends them to licensed real estate agents. They’re not licensed to sell real estate, manage property or handle real estate transactions themselves. When a lead they send to a real estate agent closes on a sale, the referral agent gets paid a referral fee.
Commercial Real Estate Broker
A real estate broker, however, is a person who is trained for in-field and actual selling of real estate properties for a certain period of time and must have passed an examination exclusively for real estate brokers. The examination covers the basic real estate laws and deals or transactions. Brokers typically complete more training than real estate agents. Their training allows them to independently facilitate property transactions or own a brokerage, supervising other agents.
A brokerage company’s primary duty is to act as a middleman who assists or represents buyers and sellers in the transaction process. A broker who owns a brokerage employs other real estate agents to work under them. Brokers are capable of overseeing more technical parts of real estate transactions.
Responsibilities of a Real Estate Broker
- Can Do Everything Real Estate Agents Can Do
Before someone can become a broker, they must first pass the real estate licensing required in their state. They are capable of completing each step of the real estate purchasing process.
- Supervises and Guides Other Agents
Brokers who oversee a brokerage manage the day-to-day of running a firm, providing support to agents in the form of technology, marketing, mentoring, and listings. Many go through advanced training courses in order to become a broker and can help with complicated real estate transactions.
Types of Real Estate Brokers?
In general, there are three roles that a broker may perform:
- Designated broker
A designated real estate broker, or principal broker, oversees all licensed real estate agents at a firm and ensures that agents are operating in compliance with local and national real estate law. At a real estate firm, the designated broker is the one person who holds the license for the firm and can be paid a salary instead of a commission.
- Managing broker
A managing broker, or broker-in-charge, oversees the day-to-day operation of the office. This broker is directly under the designated broker and can be responsible for hiring real estate agents, training new real estate agents, supervising administrative staff, managing compliance, recordkeeping, and vendor relationships.
- Associate broker
An associate broker is similar to a real estate agent in that they represent buyer and seller transactions. However, they can do so without supervision by a broker (and may receive a larger percentage of the commission because of this).
How to Become a Commercial Real Estate Agent or Broker
The requirements to become a real estate agent or broker vary by state. It is imperative to check the local licensing board for your jurisdiction to see the requirements for your area. In general, you may need to:
- Meet your state’s minimum licensing requirements. These are usually broad requirements, such as being over 18 years old and having a high school diploma.
- Complete real estate pre-licensing courses. Pre Licensing courses typically cover both state-specific and federal laws and regulations.
- Pass your state’s real estate license exam. Your state will have a minimum passing score that you’ll be required to meet.
- Work under a licensed broker. The amount of time you may have to spend working under a broker will vary, but it’s a good idea to work under one for at least six months to a year; the broker will act as your mentor and show you the ropes.
- Obtain a real estate license. After satisfying all the requirements, you’ll submit an application for a real estate license. You may also be required to submit to fingerprinting and a background check.
CONCLUSION
The difference between an agent and a broker is in their qualifications. A broker must have a license, he must be registered; he has more credentials to his name. A broker must have completed additional coursework aside from what a real estate agent must have completed. He has more schooling and has more responsibilities in the whole course of a transaction. He is the one to make sure that a transaction has been completed properly.
An agent has lesser credentials and a shorter period of training. Besides, he is just working for the broker. As for client interaction, the agent is usually the one to personally assist and handle the clients. He is the one to handle meetings between the buyer and the seller; he assists the client’s needs, handles filling out contracts, presents possible buyers or properties to clients, and handles the negotiations between the buyers and the sellers. A broker may also act as an agent or salesperson but the agent cannot act as the broker.
It’s no secret that real estate job titles can get a little confusing. The differences might be minor, but it’s important to be well informed on the subject, especially if this is a career path that interests you.
As informed investors we should understand the risks associated with real estate investing and that there is no guarantee. Please do your due diligence.
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Who are Commercial Real Estate Agents?
Commercial real estate agents are individuals who are licensed to help people buy, sell, and rent real estate.
Types of Real Estate Agents?
- Buyer’s agent
- Listing Agent
- Dual or transactional agent
- Referral agent
Who is a Commercial Real Estate Broker?
A real estate broker, however, is a person who is trained for in-field and actual selling of real estate properties for a certain period of time and must have passed an examination exclusively for real estate brokers.
What are the Responsibilities of a Real Estate Broker?
- Can Do Everything Real Estate Agents Can Do
- Supervises and Guides Other Agents
Types of Real Estate Brokers?
- Designated broker
- Managing broker
- Associate broker
Do I need to work with a commercial real estate agent or broker to buy or sell a property?
While it’s not required, working with a professional can provide valuable guidance and expertise throughout the transaction process.
Are there any drawbacks to working with a broker instead of an agent?
Working with a broker may be more expensive than working with an agent, as brokers typically charge higher commission rates.
