Hello World! Welcome Friends! The U.S. requires at least 1.1 million homes to keep up with the high demand. Given the high need for housing, the number of real estate professionals like agents and brokers is increasing as well.
However, while people often use the two terms interchangeably, an agent and a broker have stack differences. Understanding the differences between a real estate agent vs real estate broker, as a home buyer or seller will give you great insights into the process.
Keep reading to learn more about the distinction and find out who’s the right professional for your needs.
The Difference Between a Real Estate Agent vs Real Estate Broker
A real estate agent refers to an industry expert that facilitates real estate transactions. A good example is The Big Orange Press, which is a team of West Knoxville real estate professionals. Real estate agents connect buyers and sellers. Their payment is usually a commission of the property’s total sale price when you sell your home. A real estate broker, on the other hand, deals with the technical bit, including arranging, overseeing, and negotiating transactions. Brokers often have more training than real estate agents. They own brokerages, where they employ the agents.
The interesting aspect about a broker vs. an agent in real estate is that a broker can work as a real estate agent, but a real estate agent can’t start operating as a broker. Besides, a broker can choose to work independently or with salespersons. States have different rules on what real estate agents and brokers can or cannot do.
Real Estate Brokers and Agents’ Responsibilities
One of the factors differentiating agents from brokers is their responsibilities. A broker has a go-ahead in firm ownership. Brokers also manage agents. Here are the typical responsibilities of brokers:
- Property management
- Recruitment and management of agents
- Review of contracts
- Communicating with relevant stakeholders
- Marketing
- Managing the staff
Real estate agents work under a broker. Some of the roles of an agent are similar to those of a broker. However, there are some responsibilities an agent can’t handle, such as operating a brokerage firm, record keeping, and managing other agents.
Here are the responsibilities of a real estate agent:
- Marketing homes
- Holding home shows and open house
- Representing home sellers and buyers
- Managing transactions
- Renting commercial and residential properties
- Prospecting leads
Understanding these responsibilities will enable you to know when you need the services of an agent and not a broker.
The Requirements for Real Estate Broker Vs. Agent
How to become a real estate agent vs. real estate broker varies between states. It would help to check up your state for specific prerequisites. However, most of the general requirements cut across the U.S.
A Real Estate Agent
Aspiring real estate agents should start by understanding the licensing requirements in their state. You can check out the real estate commission site in your state as the prelicensing vary between states. Once you understand the requirements, enroll for a course in real estate prelicensing.
The real estate licensing education is often comprehensive and might feel daunting. However, it is a sure pathway towards being the best real estate agent. Your school of choice should be reputable with qualified instructors and quality content.
After the licensing education, one has to sit for the real estate salesperson exam. It would help if you prepared well to pass this exam. Having a good grade in this state exam doesn’t mean that you’ll get the license immediately.
You have to get a credible brokerage firm to complete some final tasks. You’ll get your license after the state accepts your form. Note that the requirements of getting a real estate agent vs. broker license differ.
Real Estate Broker
Like in getting a real estate agent license, brokers ought to start by finding out their state’s requirements for broker licensure. Understanding the requirements gives aspiring brokers a road map that will help them have an explicit schedule early enough.
You’ll need to work as a real estate agent for about two years. The board allows you to sit for your broker exam when you’ve covered at least two years in a brokerage firm. You will be learning on the job, a step that forms part of the real estate agent vs. a real estate broker differences.
Other than the experience, the state will require you to take coursework that expands the knowledge gained during prelicensing. You need to be fluent in essential subject areas as brokers are the experts in real estate, who deals with more complex transactions processes.
Real estate brokers have to pass the broker licensing exam, which differs in every state. The real estate commission website from your state is a great place to start in preparing for the exam. You might also want to consider an exam prep course for better preparation.
Evaluating Differences in Salary
Among the differences between being a real estate broker vs. agent is the compensation. The Bureau of Labor Statistics stipulates that the annual mean wage for real estate agents and brokers is $62,060 and $81,450, respectively. Given the experience and roles of real estate brokers, it’s a no-brainer that their salary is higher.
It is important to note that real estate brokers and agents don’t have fixed salaries. Instead, the professionals work on a commission basis. The income will, therefore, depend on the commission and the property’s sale price.
For real estate agents, the commission is from clients’ representation. It’s usually 5 to 6% of the sale price. The agents from the buyer and seller side split the commission by half.
A real estate agent then pays the broker’s fee, a percentage of the commission earned. Brokerage firms have their stipulated commission. Brokerage firms hire the best agents; they provide further training to increase the chances of closing deals.
The Differences Between a Real Estate Agent vs. a Real Estate Broker Are Undeniable
People often use the term real estate broker and real estate agent interchangeably. Yet, the two professionals are distinct. One of the notable differences in real estate agent vs real estate broker is that the latter has more training, experience, and the salary is higher than that of agents.
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