Real Estate Broker Vs. Agent Vs. REALTOR®: What’s The Difference?

It should come as no surprise that when planning to buy a house, home buyers prioritize properties that fit their needs – and budgets. Sellers have priorities, too. They generally want to maximize their profit.

To achieve their distinct goals, home buyers and sellers can benefit from the services of a real estate broker, real estate agent or REALTOR^®. Which real estate professional you choose to work with or not can impact your experience – and your pockets. Understanding the role of each professional is crucial for your buying or selling experience.

What Is A Broker In Real Estate?

The most significant difference between an agent and a broker is that a broker can manage their own brokerage firm. Real estate agents, however, gain experience working under a broker. Real estate brokers can work alone or hire other real estate agents to work for them.

To become a real estate broker, you must take additional courses and pass a broker licensing exam after working as an agent for a certain number of years. Like real estate agents, brokers regularly take continuing education courses to renew their broker licensing.

Types Of Real Estate Brokers

There are three types of real estate brokers. Each has a unique set of job responsibilities.

• Managing broker: Spends the bulk of their time overseeing the day-to-day operations of a brokerage firm, which can include everything from training new agents to handling licensing issues and carrying out traditional human resources tasks.
• Principal broker: Also referred to as a designated broker, they mainly oversee the transactional and legal aspects of the firm. Sometimes, the managing broker and the principal broker are the same person, but every firm must have one designated principal broker.
• Associate broker: A licensed broker who works under the supervision of another broker, usually the principal broker. They perform typical broker duties but don’t supervise other agents in the firm.

Real Estate Agent Vs. Broker

A real estate agent is a broad term that describes any licensed professional who helps individuals buy, sell or rent real estate.

Real estate agents are formally referred to as real estate salespeople to distinguish them from real estate brokers. Their responsibilities can include marketing a property for sale, helping clients with negotiations and overseeing various administrative tasks to help ensure straightforward real estate transactions.

After an agent receives their license, they must find a sponsoring broker or brokerage firm to work for. To maintain their real estate license, all real estate agents must take continuing education courses every few years.

Real Estate Broker Vs. REALTOR^®

A REALTOR^® can work as a real estate agent or real estate broker. The only difference between REALTORS^®, real estate agents and brokers is that REALTORS^® are members of the National Association of REALTORS^® (NAR). To become members, they must agree to conduct themselves and their business according to the NAR’s code of ethics.

Compensating Real Estate Professionals

Real estate brokers, real estate agents and REALTORS^® are paid a commission for their work. A real estate commission is a percentage of the home sale price. The seller usually pays it to compensate a real estate agent or a REALTOR^®. The fee is agreed to before closing and withdrawn from the seller’s proceeds.

Real estate agents receive a lower percentage because the commission gets split between the real estate professionals representing the seller and buyer first. Then, the agent usually splits their commission with the broker or brokerage firm they work for.

Following a recent settlement related to broker commissions, NAR has agreed to changes that could significantly impact commissions and real estate transactions. The changes could take effect by the end of 2024. Under the new rules, buyer agent compensation will no longer appear on the multiple listing service (MLS). Negotiating the buyer agent fee will be left to home sellers, brokers and agents to discuss.

Other Roles Real Estate Brokers Can Fill

Beyond managing and overseeing a real estate brokerage, brokers can fulfill several roles in a real estate transaction. Here are a few to familiarize yourself with:

Buyer’s Agent

A buyer’s agent is a real estate agent, broker or REALTOR^® who represents the home buyer in a real estate transaction. Buyer’s agents help home buyers find potential listings, and they coordinate viewings.

After a buyer has selected a property, the agent will acquire property disclosures, make and negotiate offers, coordinate with lenders and attorneys and attend the closing.

Listing Agent

A listing agent, or seller’s agent, is a real estate agent, broker or REALTOR^® who represents the seller in a real estate transaction. They market listings, schedule appointments, show properties to buyers and buyer’s agents and host open houses.

They also negotiate with buyer’s agents, supervise home inspections and appraisals, coordinate with attorneys and attend closings.

Dual Agent

A dual agent is a real estate agent, broker or REALTOR^® who represents the seller and the buyer in the same real estate transaction. Several states prohibit dual agency due to the elevated risk of a conflict of interest.

However, if both parties agree to dual agency, a clause can be added to the listing and buyer broker agreement. The clause will confirm that the seller and buyer understand the arrangement and potential risk and agree to its terms.

Real Estate Agent Broker FAQs

Still not sure what a broker is in real estate? We’ve answered some frequently asked questions about brokers and what they do.

What is the purpose of having a broker?

A broker facilitates efficient, successful real estate transactions. With their extensive knowledge of the real estate industry and its rules and regulations, they can provide additional guidance and support for agents and clients.

What does a real estate broker do?

A real estate broker can do anything a real estate agent can do – and they have a higher level of licensing. Their primary responsibilities can include overseeing real estate transactions, ensuring all legal requirements are met and supervising a team of real estate agents. Brokers can also provide support to agents working on complex or high-value transactions.

How do real estate brokers get paid?

The Bottom Line

Whether you work with a real estate broker, agent or REALTOR^®, prioritize working with someone who offers the expertise and support you need to navigate the housing market. Your first step in a real estate transaction should be to recruit a real estate professional who understands your needs and goals.

If you’re ready to buy or sell with a real estate expert, Rocket Homes℠ can help! Our agents are highly rated and experienced, so you can rest assured you’ll receive the best service possible.