Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
Hitting the world of real estate means that you’re going to hear a lot of talk about agents, brokers, as well as lawyers, and other job titles. The agent and broker are the two most significant roles you’ll have to play in a real estate transaction. Both agents and brokers are there to act on a party’s behalf, but what do they do? How are they different: Real Estate broker vs. agent vs. realtor.
Real estate agents have a real estate license and work for a brokerage firm. Also, a broker has a real estate license and may take other qualifications. Both meet the licensing requirements and respect a real estate code of ethics.
Nevertheless, brokers can work independently, own a real estate brokerage, or get contracted as freelancers.
There are a lot of subtle differences between brokers and agents. Knowing which is which and why you have to work with the right one is essential.
A real estate agent is someone who passed the real estate test, got certified, and is looking to start working on selling homes. Agents are there to help put together offers, and show houses, help you negotiate, and also facilitate contract negotiations. They’re the ones who drop off offers and also hand you the keys.
The best way to describe it is that they are the people who do “on the ground” work. They advertise, network, are active on social media and do the hustle all day long. There are many types of real estate agents.A real estate agent is anyone who acts on behalf of a principal in buying, selling or renting real estate. Because this term is so expansive, it can technically include Principal Brokers, Licensed Associate Real Estate Brokers, and Licensed Real Estate Salespersons. Essentially anyone licensed with New York State to practice real estate brokerage. In practice, this unofficial term is often used by Licensed Real Estate Salespersons and sometimes Licensed Associate Real Estate Brokers to describe themselves.
A real estate agent generally gets hired by a real estate firm, and they can’t work on their own in most cases simply because of the legal red tape.
Besides, many agents prefer to work for someone else while they get a grip on the overall real estate market.
Real estate brokers are licensed to perform real estate actions and sometimes even freelance as agents. For example, they can buy or sell a house, pitch to potential buyers or sellers, host an open house or collect a commission.
However, the term “broker” tends to mean several things. It primarily means that you’re doing the office work. There are three main types of brokers:
Managing brokers are the people who manage the daily operations of a real estate brokerage. They manage compliance, talk to vendors, and work with people associated with an agency.
If you are looking for a job in a real estate agency, then talking to a managing broker will be the right move. These are the individuals who work on hiring, training and firing people, and they are also the people who manage recordkeeping and compliance.
Designated brokers are the brokers who oversee all the legal paperwork and compliance issues. They manage all the real estate agents under their wing, ensuring that everything complies with state, local, and federal real estate laws.
They are also the people who hold the brokerage license for their firm.
Since so much weighs on the shoulders of designated brokers, they are often paid salaries rather than commissions.
Associate brokers can act as real estate agents and do their work. However, they do not require the same oversight as a regular agent. This broker category makes their living freelancing or just working for themselves.
Honestly, it won’t make much of a difference in many ways. You’ll still need an agent’s services when selling or buying a home.
If you hire a broker who acts as an agent, then you’re still getting agent services. If you employ an agent, you’re getting those services with the oversight of a broker.
Generally speaking, brokers tend to make more. They work with way more agents, all of whom give them a good cut of their commission for the work they do.
Agents will make between $40,000 to $100,000 in their first couple of years in New York.
Meanwhile, brokers can usually clear between $80,000 to $200,000.
It all depends on what you want to do. If you are considering a new career, there are a couple of things you need to know:
You don’t have to worry too much about the specifics as a buyer or seller. As long as you hire the right people to help with a home sale or get your next property, you should be OK with how things work.
After all, they’re called professionals for a reason!