Real estate professionals have different titles – brokers, agents and buyer’s agents, and so on. So if you’re entering the industry for the first time, distinguishing their differences between a real estate broker and real estate agent might be confusing. In fact, even consumers are using the titles interchangeably when in truth each title has its specific requirements and roles.
Differences between a Real Estate Broker and Real Estate Agent
The government regulates the real estate industry, and it’s per state. Each has requirements before giving real estate professionals a license. Today, let’s talk about the differences between a real estate broker and real estate agent in general.
Real estate agent: It’s anyone that has a real estate license – can be an associate broker or sales professional. Again, the requirements per state differ. However, all states require agents to take a number of classes and an exam to pass before earning a licensure.
Broker: This professional has taken education, which is beyond the level of the agent based on state laws. He/she has also earned a license after passing the broker’s examination. One can be an independent professional or work in a firm and can hire people under him. Brokers have higher education requirements versus salespersons do. They also have the experience as an agent.
Around the web: 7 tips for picking a great real estate agent
Types of Real Estate Broker
- Designated/principal broker: This person works in a real estate office, overseeing the licensed real estate agents. He/she does it to ensure that the agents are complying with the national/state real estate laws and also reviews each real estate contract. The principal broker also resolves the disputes with other brokerages, such as when a disagreement happens over an inspection of a home. He/she also tries resolving the issues of his agent with another broker’s agent. The professional is also paid on commission, having a cut of his/her sales agents’ commissions. In other cases, many of these also receive a base salary yearly. Their income can also fluctuate monthly based on the transaction volume as completed by the firm’s agents. A broker-owner can make an average of $102,200, while only $30,000 for real estate agents.
- Realtor: He or she is someone who’s a National Association of Realtors’ member. It only means that the professional should always comply with the association standards along with its Code of Ethics.
- Associate broker: One is also called an affiliate broker or broker associate. He/she has a broker’s license but is under the managing broker.
- Associate broker: This professional has taken classes and with a license but then chooses working under a broker.
- Managing broker: He/she is involved in supervising the daily operations of the firm as well as manages the hiring of new agents. One can also train new agents and manage the admin staffs. In some firms, the principal brokers also work as a managing broker.
How to work with a real estate professional
If you’re selling or buying a home, you’re more likely than not deal with an associate broker. But then, there are also broker providing their services for sellers and buyers. Whether you’re selling or buying a home, the associate broker reports to a broker, who will establish an escrow account and will handle the money deposit.
Without even saying, the broker is the one bearing the responsibility for the works of the agents he/she is managing. The broker will also be the one to step in the event that your home sale or purchase has a problem. So if you’re dissatisfied with the performance of an agent, you can seek the help of another agent or go straight to a broker.
Tips to find a good broker
Just like in many decisions you have to make, you also have to consider choosing your real estate broker carefully if you would hire one instead of a real estate agent. When looking for real estate broker, you should ask questions as well.
- How long have you been in the business?
- What is your marketing plan?
- What kind of experience do you have selling/buying homes in this area?
- How many years have you been living in this state?
- What is your schedule?
What are the pros and cons?
Principal brokers do not work directly with their clients. The associate or managing brokers do. One advantage of working with a real estate broker is that you can have peace of mind that you’re dealing with a licensed broker with the experience in the industry. He or she does not only have the skills and knowledge in real estate but also about real estate laws. It will come in handy in many situations when selling your home as a short sale, for instance.
On the other hand, there are still drawbacks to using broker services versus those of an agent. One issue here is time if broker is busy supervising other agents. In this case, he/she might not have much time to spend with you.
That is one pro of hiring an agent instead. But still, this is case-to-case basis. It is the exact same reason to interview some prospective real estate professionals before hiring one to sell or buy a home in Ocean City, for example.
Many of these brokers might be spending most of their time in the firm, so having area specific real estate knowledge might also become an issue. In addition, they’re unlikely to be flexible on commission.
If you’re looking to buy/sell a home in Ocean City, Maryland, feel free contacting me today!