A real estate broker is technically the Broker of Record or Principal Broker of a real estate brokerage. Some companies, including those organized as corporations and Limited Liability Companies (LLCs), can have multiple Brokers of Record, which you can look up in eAccessNY (NYS DOS license database).
Real Estate Agent vs Broker in New York: The Real Difference
Go Back To Previous PageHitting 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 two
biggest roles that you’ll have played in a transaction are the agent and the broker. Both agents and brokers are there to act on a party’s behalf, but what do they do? How are they different: Real Estate Agent vs. Broker vs. realtor.
Real estate agents have a real estate license and work for a brokerage. A broker has a real estate license and may take other qualifications too. Brokers can work on their own, own a real estate brokerage, or get contracted as freelancers.
There are a lot of subtle differences between brokers and agents. It’s important to know which is which and why you have to work with the right one.
1) What Does A Real Estate Agent Do?
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, 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, and do the hustle all day long.
A real estate agent is anyone who acts on behalf of a principal in the buying, selling, or renting of 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 who is licensed with New York State to practice real estate brokerage. In practice, this unofficial term is most often used by Licensed Real Estate Salespersons and sometimes Licensed Associate Real Estate Brokers to describe themselves.Who Does A Real Estate Agent Work For?
A real estate agent generally gets hired by a brokerage. 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 market.
2) What Does A Real Estate Broker Do?
Real estate brokers are also licensed to perform real estate actions and sometimes even go freelance as agents. 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
- designated brokers
- and associate brokers
The official NYS DOS titles for Brokers of Record are Corporate Broker, Limited Liability Company Broker, or Individual Broker in eAccessNY, depending on whether the operation is structured as a corporation, an LLC, or a sole proprietorship.
a) Managing 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. They are also the people who manage recordkeeping and compliance.
b) Designated Brokers
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 is compliant 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.
c) Associate Brokers
Associate brokers can act as real estate agents and do their own work. They do not, however, require the same oversight as a regular agent would. This is the broker category that makes their own living freelancing or just working for themselves.
2) Should You Hire a Real Estate Agent vs. Broker?
You shouldn’t decide on whether to work with a broker vs. agent based on the title alone. Many highly experienced real estate agents do not become Licensed Associated Real Estate Brokers or Principal Brokers of their own firms because of the cost and marginal benefit in doing so. Many real estate agents are content to focus on doing deals and minimizing costs and have enough reputation and reviews where they do not care about a bump in the title.Honestly, it won’t make much of a difference in a lot of ways. When you’re buying or selling, you’re still going to need to have the services of an agent.
If you hire a broker who acts as an agent, then you’re still getting agent services. If you hire an agent, you’re getting those services with the oversight of a broker. See what I mean?
Who Makes More, Agents Or Brokers? Real Estate Agent vs. 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 or more.
Should You Be An Agent Or A Broker?
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:
- The best brokers spent several years working as agents. This gives them a good handle on the local market and helps them understand their workers’ needs.
- People who want to do a lot of networking and marketing tend to do best as agents. Going out there and selling is what some people do best with. When that happens, it’s best to roll with it. Great agents can love their job and make major banks.
- Brokers tend to make more money regardless of experience. It’s just the way that broker fees are set up.
- However, the stakes are often higher with brokerage work. This is a serious thing you need to consider. If something gets overlooked by a broker, it can lead to license revocation, lawsuits, or even an arrest. It’s some scary stuff.
Real Estate Agent vs. Broker …They’re Still There For You
The truth is that 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 you sell your home or get your next property, you should be totally fine with how things work out. After all, they’re called professionals for a reason!
