Who Should Sell My Home? Understanding the Distinction Between a Real Estate Broker and Agent
In today’s thriving real estate industry, where the median home price witnessed a remarkable 13% increase to $225,000 in 2017 alone (Money), selling your home can offer a promising return on investment. While it may be tempting to embark on this venture independently, without the involvement of a real estate professional, the challenges of advertising your home and attracting genuine buyers should not be underestimated.
Navigating the intricacies of the real estate market requires expertise and experience that many homeowners may not possess. Without the guidance of a knowledgeable intermediary, frustration can easily set in, leading to undervaluing your property or struggling to find qualified buyers. Fortunately, the services of a real estate broker or agent can alleviate these concerns, ensuring a smoother and more successful selling process.
By engaging the services of a broker or agent, you can entrust the task of selling your home to a professional who possesses the necessary skills, industry knowledge, and an extensive network of potential buyers. For a commission fee typically around 6%, you can benefit from their expertise and minimize the efforts required on your part.
However, before making a decision, it is crucial to understand the distinction between a real estate broker and agent. While both play essential roles in facilitating property transactions, they have different purposes and responsibilities within the industry.
To make an informed choice regarding who should handle the sale of your home, it is essential to familiarize yourself with the nuances between these two roles. By delving deeper into their respective duties and qualifications, you can confidently select the professional who best aligns with your needs and objectives.
Discovering the key differences between a real estate broker and agent is the first step towards making an informed decision. In this comprehensive guide, we will explore the unique roles they play, shedding light on their qualifications, responsibilities, and the distinct advantages they bring to the table.
Whether you are contemplating selling your home or simply seeking a better understanding of the real estate industry, gaining clarity on the differences between a real estate broker and agent will empower you to navigate the market with confidence and ensure a successful outcome for your property sale.
The Difference Between a Real Estate Broker vs. Agent
Roles of a Real Estate Broker vs. Agent
Real estate agents meet with clients and host events such as open houses.
Their primary function is to sell the property.
Agents operate like licensed salespersons.
However, real estate agents aren’t independent.
They work under a broker.
The agents sell or buy a house based on the terms of the employing broker.
A real estate broker has a higher rank than an agent.
A broker can work independently by establishing a firm for real estate brokerage.
Brokers negotiate and oversee all real estate transactions.
From their job descriptions, real estate brokers have a higher standing than real estate agents.
Yet, the roles played by the agents are indispensable.
Brokers hardly break even if they don’t have aggressive agents.
Technically, both the real estate broker and agent can assist a client in buying or selling a property.
Both have the skills and competencies to search for homes, show their clients, present contracts, and put up a property for sale.
The primary difference is that the broker oversees the roles of an agent.
Compensation Differences
The median annual wage, as reported in 2018, was $58 210 for real estate brokers and $48,690 for agents (BLS).
Brokers and agents don’t have salaries.
Their mode of payment is through commissions.
Real estate agents get their commission for representing clients.
For a residential real estate agent, the commission is at least 6% of the final property’s price.
An agent has to pay the stipulated broker’s fee from the commission.
Conversely, real estate brokers rely solely on their agents’ commissions.
For this reason, brokers seek to hire highly capable agents.
Furthermore, they train their agents to increase their sales and marketing skills.
Real estate agents have to work for a broker.
When signing a contract, the two parties agree on whether the payment will be a flat rate or a percentage.
It’s hard to distinguish the actual income of the real estate broker vs. agent.
Nonetheless, a broker’s income is potentially high.
Certification
States have distinct minimum requirements for real estate brokers and agents.
Whichever path you choose, classes, tests, and certifications are inevitable.
Once you get the accreditations, you can operate anywhere within your state.
You don’t need a college degree to get the real estate agent certification.
The only requirements include the age limit, which is 18 years.
Besides, you should be free of any criminal convictions or criminal indictments.
If you meet the minimum requirements, you will have to take a prelicensure class.
The class length depends on your state. You then have to take a licensing exam before registering as a practitioner.
You have to become a real estate agent before being a broker.
The years of experience differ based on your state.
When your years of experience are satisfactory, you ought to get a pre-license education (Aceable).
The next step after doing your class hours is sitting for a state exam.
Submit your application and wait for license issuance.
A real estate broker’s education process is more complicated than an agent’s due to the different nature of their work.
The Type of Real Estate Agents and Brokers
The different real estate agents have distinctive specializations and responsibilities.
Listing agents represent the interests of their sellers.
They seek to get their clients favorable contract terms.
Buyer’s agents focus on helping homebuyers to search and buy ideal homes.
They assist in price negotiation and ensure that their clients get a good deal.
A dual real estate agent represents the seller and the buyer in a transaction.
The situation arises when the buyer and the listing agents are from the same brokerage firm.
In some states, dual agency is unacceptable because of the possible conflicts.
Ostensibly, real estate brokers have different titles based on their career paths.
Designated brokers oversee real estate agencies.
These brokers are legally responsible for transactions completed by their agents.
Most of them have minimal interactions with the brokerage; instead, they focus on human resources.
Broker associates are licensed brokers as per the state requirements.
These brokers have the work experience required.
Yet, they operate as agents under a certified real estate broker.
The managing real estate brokers take an active role in running the brokerage.
They deal with agents and oversee transactions.
All these brokers play a critical role in the effective running of a firm.
In Comparing Real Estate Broker Vs. Agent, It Is Clear That A Broker Ranks More Highly Than An Agent
However, the real estate venture is incomplete without an agent.
Therefore, the real estate brokers and the agent have unique roles necessary for the real estate market to thrive.
They both depend on each other to grow.
A real estate broker undergoes more training and has more years of experience than an agent.
Besides, the brokers can operate a brokerage independently.
However, a real estate agent’s sales and negotiation skills are admirable.
If you want to start a career in real estate, being a real estate agent is a great starting point.
You can gradually grow into a broker through more experience and further training.
With the growth rate in real estate, a career in the industry is worth pursuing.
Now that you understand real estate broker vs. agent, learn how to afford your dream home, and check out our site for more informative and thrilling topics.