Some professionals are actively involved in the buying and selling of a real estate. Two of the professionals that play a role in a real estate transaction is the broker and the real estate agent. A lot of people do mistake these two professionals. The truth is that the real estate broker is different from a real estate agent. This post outlines details on these two professionals, roles they play in a real estate transaction and the differences between the two.
Who is a Real Estate Broker?
A real estate broker is a professional that has undertaken the additional educational requirements and has obtained a broker license. The educational qualification to become a real estate broker is higher than that of a real estate agent. Also, the qualifications differ from state to state.
Types of Real Estate Broker
To understand the roles of a real estate broker, you need to understand the different types of brokers.
a. Principal Broker:
The principal broker is also known as the designated broker. The duty of the principal broker in a firm is to ensure that licensed real estate agents in the firm observe the ethics of the profession. In most cases, the principal broker has to go through contracts to ensure complete compliance with real estate laws at the state and national levels. How is a principal broker paid? A principal broker earns commission from sales made by agents under him.
b. Managing Broker:
The managing broker is in charge of the day to day running of the firm. That includes hiring agents, management of admin staff and training of agents.
c. Associate Broker:
An associate broker is a broker that is qualified and has obtained a broker license but still working under a managing broker.
Who is a Real Estate Agent?
A real estate agent is someone that is qualified to practice as a real estate agent in a state. To qualify to practice as a real estate agent, you must undergo the required coursework and pass the exams to obtain a license. A licensed real estate agent is qualified to practice in a particular state where the license is obtained. In order words, obtaining a real estate license in a state does not qualify you to practice in another state. To practice as a real estate agent in another state, you have to undergo the required coursework and take the license exams in the state.
Types of Real Estate Agents:
There are generally three types of real estate agents. The type of agent will determine the job description and role of the agent.
a. Buyer’s Agent:
The buyer’s agent works with a buyer to facilitate the process of buying a real estate. The role of a buyer agent is to help a home buyer find a home that fits his needs. The buyer agent also negotiates with the seller to get the best price for the home. Other roles include getting professionals to facilitate the sales. An example is to recommend a home inspector and also handle the paper works.
b. Seller’s Agent:
The seller’s agent is also known as a listing agent. This type of real estate agent helps to prepare a home for sale and also to facilitate the selling process. The seller’s agent shows homes to buyers, negotiate with the buyer for the best price.
c. Dual Agent:
A dual agent acts as both a buyer’s agent and a seller’s agent. The role of the dual agent depends on what the client wants at the moment.
Difference between a Real Estate Broker and Agent
Real Estate broker: The qualification to become a real estate broker is higher than that of an agent. You acquire a real estate agent license first, and then undergo additional coursework to obtain a broker license.
Real estate agent: After the best coursework and exam, you don’t need an additional qualification to become a real estate agent.
Real Estate Broker: Work experience is a mandatory requirement to become a real estate broker. In most states, you need at least three years work experience as a real estate agent to qualify for a broker license.
Real estate Agent: In most states, you don’t need to have work experience to become a real estate agent. All you need is to complete the required coursework and pass the real estate license exams.
Own a Firm:
Real estate broker: A Real estate broker can own a real estate firm. A broker can employ other licensed agents to work in the firm. Also, a broker can work as a real estate agent and as a broker too.
Real estate agent: A real estate agent cannot own a real estate firm either can he employee other agents. An agent must work under a managing broker to acquire the needed work experience. Also, an agent cannot work as a broker.