Difference between a Broker and an Agent
Whether you’re buying or selling a home – or you’re interested in joining the real estate industry – it’s important to understand the differences between common real estate professionals, including a real estate agent and a real estate broker.
While both terms refer to licensed real estate professionals who are able to assist both sellers and buyers, there are key differences to be aware of as you embark on the home buying journey.
The Difference Between A Real Estate Agent And Broker
The main difference between an agent and broker is the number of responsibilities they’re able to take on. A broker can do everything an agent can do, but they have the added responsibility of making sure all real estate transactions are lawful, all paperwork is accurately completed and all finances are accounted for.
Let’s take a closer look at the tasks, types and incomes of these roles to get a better understanding of what differentiates them.
What Is A Real Estate Agent?
A real estate agent is a licensed professional who organises and assists with real estate transactions. Real estate agents are usually paid on commission and work on behalf of another agent or brokerage.
What They Do
A real estate agent can be a significant source of help when it comes to buying or selling a house. Some of their responsibilities include:
- Providing buyers with information about property values, schools and neighbourhoods.
- Connecting sellers with qualified home buyers
- Sharing listings with home buyers via the multiple listing service.
- Connecting home buyers with mortgage lenders to get preapproved for a loan
- Negotiating repairs and replacements that are requested by home inspectors or appraisers.
- Assisting buyers and sellers with paperwork and the closing process
The responsibilities of your real estate agent will depend on whether you’re buying or selling. Let’s take a look at how the different types of agents can help you achieve either of these goals.
Types Of Real Estate Agents
- Listing agent: There are multiple parties involved in a real estate transaction. The listing agent represents the seller during the sale.
- Buyer’s agent: A type of real estate agent who represents the home buyer during a real estate transaction.
- Dual agent: A real estate agent who works as both the listing agent and buyer’s agent in the same real estate transaction.
How They Get Paid
Real estate agents are almost always paid on commission instead of earning a salary, meaning the agent will receive a percentage of the sale when they help someone buy or sell a property.
What Is A Real Estate Broker?
A real estate broker is an agent who passed their broker license exam. If you’re working with a broker, it’s important to know that they formerly worked as an agent and gained their experience working under a broker.
In addition to the responsibilities of a real estate agent, a broker is able to manage their own firm and oversee real estate transactions conducted by their agents.
What They Do
Like we discussed above, brokers can do all of the things a real estate agent can, but thanks to their broker license, they have the added ability to do the following:
- Move money in and out of an escrow account
- Mediate conflict in a legal dispute
- Hire agents to work under them
Types Of Real Estate Brokers
The responsibilities of a broker will depend on which type of broker they are.
- Principal/designated broker: A type of broker who is responsible for all of the operations and transactions that take place within the brokerage firm.
- Managing broker: A type of licensed broker who is responsible for handling the day-to-day operations of the brokerage.
- Associate broker: A type of broker that is more commonly hired by larger brokerages to help with the workload.
How They Get Paid
A real estate broker has two ways of earning money – through a percentage of the commission earned by the agents they sponsor, and by keeping 100% of the commission they earn from their own deals.
The seller pays the commission, which is usually 6% of the sales price. The listing agent or broker will offer a commission split with the buyer’s agent, which is normally 50/50.
Real Estate Agent Vs. Broker FAQ
Let’s take a look at some of the frequently asked questions regarding real estate agents and brokers.
Should I work with a real estate agent or a broker?
It’s up to you whether you choose to enlist the help of a real estate agent or broker. Both an agent and a broker can help you with buying or selling a home, but you may find that a broker has more experience and expertise.
Who makes more money, a real estate agent or a broker?
While a real estate agent and a broker are both primarily paid on commission, a broker will typically make more money each year since they receive commission on the deals made by the agents they sponsor as well as their own deals.
How do I become a licensed real estate agent or broker?
To become a licensed real estate agent, you’ll need to take a pre-licensing course, a licensing exam, activate your real estate licence and join a brokerage. If you want to become a broker, you’ll need to gain experience as an agent first and then take a state-approved real estate broker course and pass the broker exam.
