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 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.
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.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.
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 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.
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.
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.
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?
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.
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 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!