Real Estate Agent Vs. Broker

Many individuals do not know the difference between a real estate agent and a broker. While many of the responsibilities of the two are interchangeable when it comes to customers, the role and qualifications for each are incredibly different. Prior to entering into a real estate transaction of any kind, it is wise to know the difference between a real estate agent and a broker.

Function

A real estate agent facilitates transactions on behalf of the broker. The agent works under the broker's guidance and legal protection for real estate transactions. Brokers rarely engage in real estate transactions personally.

Significance

Agents work for a broker. The broker is the boss of the real estate company or brokerage. This is to limit lawsuits and legal liability against individual agents and offer the protection of a company legal umbrella against frivolous lawsuits and complaints.

Misconceptions

Many individuals believe that a broker is better than a real estate agent. A broker, in fact, is more of a manager for a company, but not necessarily a better agent.

Requirements

Real estate agents are required to undergo education pertaining to real estate law and ethics. Brokers have to undergo more extensive education in relation to business management.

Potential

Many agents will obtain a broker's license after several years of real estate practice and branch out on their own, or become a co-broker of the same company and share in the management responsibilities.

Benefits

As a broker, an individual does not have to split or share commissions as is required of agents, who often can lose up to half of their commissions in brokerage fees.

References

• Motley Fool
• Occupational Handbook