The Difference Between Broker and Agent in Real Estate
Real estate is a complex industry with its own language and terminology. When it comes to buying, selling, or renting property, you may come across two main terms: broker and agent. While these two terms are often used interchangeably, there are some key differences between a broker and an agent. Understanding these differences can help you make informed decisions as a buyer, seller, or renter.
What Is a Broker?
A broker is a licensed professional who has completed additional education and experience requirements beyond those of a real estate agent. A broker can work independently or supervise a team of agents. Brokers have the authority to start and run their own real estate brokerages, but they must pass a broker’s exam to obtain a license to do so in most states.
As the head of the brokerage, a broker has the final say over contracts and negotiations made by agents under their supervision. Brokers also have the authority to manage escrow accounts, handle referrals between agents, and provide advice for complicated transactions.
What Is an Agent?
An agent, or salesperson, is a licensed professional who works under the supervision of a broker. Agents are responsible for showing properties, creating and negotiating contracts, and communicating with clients. They must complete pre-licensing education requirements and pass a real estate exam to obtain their license.
Agents can work for a brokerage or operate independently. They earn a commission based on the sale price of the property or rental agreement they help facilitate. Real estate agents are the most common point of contact for buyers, sellers, and renters when it comes to real estate transactions.
What Are the Differences Between a Broker and an Agent?
The main difference between a broker and an agent is the level of education and experience required to obtain a license. Brokers need to complete additional education and experience beyond that of an agent and pass a broker’s exam to become licensed. While agents work under a broker’s supervision, they can provide the same services as brokers when it comes to buying, selling, and renting properties.
Another primary difference is the scope of authority given to brokers versus agents. Brokers can start and run their own real estate brokerages, make final decisions on contracts and negotiations, and manage escrow accounts. Agents generally work under the supervision of a broker and can not start their brokerage.
Final Thoughts
Real estate brokers and agents are essential professionals in the industry who can assist with buying, selling, or renting properties. While the roles of brokers and agents may seem similar, there are critical differences in their responsibilities, experience, and authority. Understanding these differences can help you make informed decisions when working with real estate professionals.
Table difference between broker and agent in real estate
| Broker | Agent | |
|---|---|---|
| Definition | A licensed professional who has completed additional education and training beyond that of an agent, and has the legal authority to operate their own brokerage and oversee agents. | A licensed professional who has completed the required education and training to practice real estate under the supervision of a broker. |
| Licensing | Requires a real estate broker license, which typically involves several years of education and experience as an agent, passing a broker-specific exam, and meeting state-specific requirements. | Requires a real estate agent license, which involves completing state-required education and passing a licensing exam. |
| Responsibilities | Oversees agents, provides training and support, manages legal and financial aspects of the brokerage, and is responsible for overall business operations. | Assists clients with buying, selling or renting properties, prepares and presents offers and contracts, and works under the supervision of a broker. |
| Earnings | Earns commissions on transactions made by agents working for them, as well as their own personal sales. | Earns commissions on personal sales made while working under the supervision of a broker. |
| Examples | Remax, Coldwell Banker, Century21 | Independent Realty, Realtor at Keller Williams |