If you’re looking for someone to help you buy or sell a house, all the titles like “agents” and “brokers” can get very confusing. If you can’t figure out the difference between the two, you’re certainly not alone! Many people find these terms confusing.
You will find there are key differences between brokers and agents, and learning how they differ can make it easier to find the person you need. The most important distinction between the two is that in order to become a real estate broker, the broker must have more education and experience than a real estate agent.
It’s also important to learn about the different types of agents–this can also get confusing, since listing and buying agents can be real estate brokers OR real estate agents.
Read on to learn a bit more about the differences.
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The Low-Down on Real Estate Brokers and Broker Associates
You may be wondering what exactly makes a real estate broker a real estate broker. Well, the truth is, there’s no tried-and-true definition. That’s because each state has its own laws and regulations about what it takes to be a broker. Nonetheless, one component that’s usually true across state lines is real estate brokers can work on their own. In fact, they can hire others to help them out.
Since the rules are different by state, it’s hard to say exactly what requirements there are for a broker. But, let’s take California as an example. In this state, brokers are the only ones who can work by themselves–agents can’t. Just like agents, they have to pass an exam, but it tends to be harder for brokers since they’re required to know a lot more!
To just qualify to take the broker’s exam in California, the broker must enroll in at least 8 college-like courses on real estate. There’s only one exemption to this rule, and that’s for lawyers, who can take the exam without having 8 college classes in real estate. The broker doesn’t have to have a degree in real estate, but they must at least have a 4-year degree, or if they don’t have that, then they need to have worked 2 years in the field.
If a person meets these requirements and passes this exam, they become a broker. If they want to work for someone else, another broker or firm, they’re called a broker associate. Many brokers choose to do this because it can be easier than striking out on their own.
The Skinny on Real Estate Agents
Whew! Now that we’ve got brokers narrowed down, let’s look at real estate agents. Real estate agents can do a lot of the same work as a broker, but usually, they’re not allowed to work on their own. They have to be employed with a broker, who oversees their work. This relationship is similar to a nurse practitioner and a doctor, where a nurse practitioner does similar work as a doctor, but a doctor must oversee their work.
Of course, real estate agents must still meet certain requirements to get a license, though as you may have guessed, those requirements do depend on where you live! For example, they often have to complete some college classes about real estate, though they generally don’t need a degree. They also usually need to pass an exam to get a license.
The Different Types of Agents and Brokers
Listing Agents/Seller’s Agents
If you’re selling a house, you want to find a listing agent. These agents will be on your side throughout the process of selling your home! They are legally required to look after your interests, so you don’t have to worry. Even though they’re called “agents,” they can be a broker or an agent.
Buyer’s Agents/Selling Agents
If you’re in the market to buy a house, you want a buyer’s agent. They’ll help you find houses to look at and protect you throughout the process of buying a house. In fact, they’ll handle the paperwork for you. Isn’t that a relief? Sometimes, you may have to sign a buyer’s broker agreement to say you’ll only work with one buyer’s agent. These agents can also be brokers or agents.
If the agent is listed as an exclusive buyer’s agent, that means they only help buyers, but if you just see “buyer’s agent” without the “exclusive,” they may work with sellers at times.
Dual agents can be on both sides of the sale at the same time. They can represent you as the buyer or seller while working for the other side at the same time. However, some states don’t allow this type of agent. That’s because it’s usually a good thing to have an agent just working for your interests on your side of the transaction. However, if the sale is easily agreed upon by both sides, this type of agent may work for you. Even if you have different agents, they may still be considered dual agents if they’re under the same broker.
A transaction agent is similar to a dual agent, but they only work in states that don’t allow dual agents. Basically, they can make the sale happen, but they’re not really working for either side.
What’s Going on with REALTOR®?
You’ve probably seen this designation when looking at realty websites. If they have the REALTORS® designation, it just means they’re a part of the National Association of REALTORS® (NAR). Both brokers and agents can be members, and it’s good if they have this designation, because it means they agree to follow a certain code of ethics.
They also are a part of local organizations, which is nice because they can connect nearby. Plus, if you have an issue with an agent or broker, you’d go to the local board.