There are several differences in the responsibilities between a real estate broker and an agent. While both real estate brokers and agents are licensed professionals, they have contrasting responsibilities and requirements. All real estate brokers are real estate agents. However, not all real estate agents are brokers. In fact, agents must fulfill the necessary requirements to become a broker. As a real estate broker, you take on much more responsibility within the business. In this post, we will discuss the differences between a real estate broker vs agent responsibilities.
Basic Requirements Of Agent
Before becoming a real estate broker, you must meet the requirements to become an agent. Real estate agents are involved in residential and commercial transactions. In order to facilitate any real estate services, every real estate agent must be 18 years or older and sponsored by a licensed broker. Additional basic requirements of an agent include completion of a pre-licensing course, passing the state licensing exam and submitting an application for the license. This way, you can establish a grip towards your real estate career. The pre-licensing course hours may vary depending on your state as well as the examination and application process. The basic requirements of a real estate agent vary from those of broker requirements.
Higher Income Potential
Once you have gained experience as a licensed agent, you can excel your income potential by becoming a broker. Typically, real estate brokers earn a higher annual income in comparison to agents. The increase in income is generated from better commission splits and a surplus of transactions. While the potential for higher income is greater as a broker, the overall responsibility can be a personal expense. As a broker, you must make informed decisions and take control within the business for it to be successful. Be aware that as the broker, you are also responsible for the actions of the agents you sponsor. With the added pressure of increased responsibility, it is no wonder why the difference in income potential is greater for real estate brokers.
Various Types Of Brokers
Among the many differences between a real estate broker and an agent, there are also various types of brokers. One type of real estate broker is a principal/designated broker. Similar to agents, principal/designated brokers are paid on commission. This type of broker handles all licensed agents within the firm. This means that the broker must ensure agents compliance with state laws and regulations. A managing broker supervises day to day tasks and transactions within the office. These tasks include hiring and training agents as well as administration staff. In fact, you can take online training courses to become a broker. Another type of broker is an associate broker. This particular broker has a brokers license but chooses to work under a managing broker. They are not responsible for overseeing other agents and act as agents themselves. These various types of real estate brokers contrast the different responsibilities from those of agents.
Agents Must Work For A Broker
Another difference between the responsibilities of a real estate broker versus an agent is that an agent must work for a broker. In order facilitate real estate services as an agent, you must be employed by a broker. Upon hire, the real estate broker and agent negotiate a split and a cap. The split represents a percentage of the sale profits that the broker takes. The cap represents the maximum pay an agent owes the broker within a calendar year. In some cases, brokers may also require agents to pay a desk fee. The desk fee is a monthly rate paid to the broker for being a member of the team regardless of transactions being closed. Even though every agent is not a broker, every agent must work for a broker.
Buyers And Sellers May Prefer Brokers
Given the greater responsibility and experience provided by brokers, it is understandable why buyers and sellers may prefer to work with brokers. The extensive training requirements as well as years of experience encompassed in a career as a broker builds a level of trust from clients. The broker assists and represents buyers and sellers in real estate transactions. While brokers can do everything an agent can, they are more capable of taking on technical components within a real estate transaction. Advanced knowledge in areas such as marketing, listing and technology enables greater competence and professionalism for brokers. Plus, leveraging this knowledge, you can maintain a professional positive presence throughout your professional real estate career. With greater professional experience and in depth training, buyers and sellers may prefer to work with brokers rather than agents.
Surely, there are many differences between real estate brokers versus agents responsibilities. Every broker must go through the same basic requirements to become an agent first. With more responsibility as a broker, there is a higher income potential. There are various types of brokers that encompass different forms of responsibilities. In order to perform real estate services, every agent must work for a broker. Due to greater experience, buyers and sellers may prefer to work with brokers. Of course, there are many differences that distinguish the responsibilities between a real estate broker and an agent.