Difference Between Real Estate Agents and Brokers

There are many differences in the relationship between real estate agents and brokers in regards to agency, commissions, client service, education and licensing.

Agency

Agency agreements are made only with real estate brokers, not agents. When someone lists their home for sale or agrees to have a real estate agent help them find a home an agency is created. This contract is between the client and the real estate brokerage. The brokerage assigns the real estate agent to work directly with the seller or buyer on its behalf.

Commissions

Commissions are paid directly to real estate brokerages, not agents. As noted before the agency exists between the client and the brokerage, not the agent. The commission is the compensation for closing a deal for the client and is paid to the broker. The real estate broker then pays the agent per a separate employment agreement the agent has with the real estate broker.

Client Service

The client will generally interact only with the real estate agent during the course of the transaction. The real estate broker serves in a management and administrative role while their agents work with clients to help them buy and sell properties.

Education

Real estate brokers are required to take additional course work and an exam that is more detailed than a real estate agent.

Licensing

The real estate agent is only able to practice under their license when it is activated by a real estate broker.