What is a Real Estate Broker?
When it comes to buying or selling a home, there are many professionals you can work with. But sometimes having so many different options can make things a little extra confusing. For example, a real estate agent and a real estate broker can have similar job responsibilities but are still quite different positions. This might have you wondering what exactly the difference is between the two. In this article, we will explore the differing qualifications, job responsibilities, and salaries of each profession. This should help clear things up a bit, so let’s jump in!
Defining Real Estate Agent and Real Estate Broker
A real estate agent is someone who has a valid license to help clients buy, sell, or rent real estate. Real estate agents are always employed by a real estate broker or brokerage firm. A real estate broker must also be a licensed real estate agent and has the same basic duties as a real estate agent, however, they must. complete additional certification and licensing requirements. A real estate broker can choose to work independently, as well as hire other qualified real estate agents to work for them.
Qualifications for Real Estate Agents
In order to become a licensed real estate agent, you must meet certain qualifications. These qualifications vary by state, so be sure to keep that in mind as well. In most cases though, a person must:
- Be at least 18 years old and have a valid driver’s license
- Be a legal resident of the United States
- Have no criminal convictions related to fraud or misrepresentation
- Complete a pre-licensing course of education through an accredited school, meeting all hour requirements by the state
- Submit to fingerprinting, along with other background checks for their state
- Pass the state real estate license exam
- Choose a licensed real estate broker or brokerage firm to be sponsored by
Once these steps are completed correctly, you will be able to receive a real estate license in your state. After that, just keep in mind that you will need to complete a certain number of continuing education classes (check with your state for more specifics) to keep a valid license.
Qualifications for Real Estate Brokers
It’s always important to double-check with the state where you live since the process can vary slightly, but initially, the qualifications to become a real estate broker are the same as those of an agent. You can refer back to the previous section for a reminder of what those qualifications are. However, for a real estate broker, the process doesn’t stop there.
Real estate brokers continue with their education and successfully complete any further state requirements to receive their state real estate broker license. In general, the additional qualifications to become a broker are as follows:
- Once you become a licensed real estate agent, work as a real estate agent for on-the-job training and experience
- Continue to complete required real estate certifications approved by the state licensing board
- Complete a state-approved real estate broker course
- Take and pass the real estate broker exam
These steps make it possible for brokers to work on their own (without being sponsored by another brokerage) and even start their own brokerage where they can choose to hire other agents.
What Do Real Estate Agents Do?
A real estate agent wears many hats and often juggles many different job responsibilities at the same time. This includes everything from meeting with clients and giving them advice on possible houses to buy or sell, showing properties to potential clients, filling out real estate contracts and paperwork, doing research on the housing market in their area, working with mortgage brokers and lenders, etc.
It is important for agents to build relationships with their clients. This not only helps attract new clients, but it can also be very beneficial for existing clients to get the best possible service. Real estate agents must keep their clients informed about market trends and statistics, which can help them make knowledgeable decisions about buying or selling real estate. It’s also the real estate agent’s responsibility to ensure that their clients understand the requirements for completing a sale. This includes any necessary home inspections, paperwork, signatures, and important dates like moving or closing dates.
Real estate agents can take on a few different roles. A listing agent represents the sellers while the buyer’s agent represents the buyers. A listing agent will help their clients set an asking price for the property, suggest possible home updates that would increase the value of the home, help stage the home for open houses, and market the listing for a successful sale. A buyer’s agent works to locate properties that meet the buyer’s wish list as closely as possible. They also help set up home inspections and appraisals as needed. Both listing and buyer’s agents will complete paperwork and help make sure all the required forms and documents get signed and submitted promptly.
What Do Real Estate Brokers Do?
A real estate broker manages and helps their agents with all of the above duties. They oversee daily operations and transactions, supervise, train new hires, and manage other administrative staff. Brokers often oversee an entire team of agents as well as help market properties. This can mean they help come up with marketing plans, create ad copy for print and digital media, schedule open houses and property showings, write newsletters to current clients or those that may be looking to buy or sell soon, and even help create videos to market homes if needed.
There are three main job positions that a broker can have, each one with varying responsibilities. There are associate brokers, managing brokers, and principal brokers. An associate broker has a broker license but still chooses to work under another broker and not supervise other agents. A managing broker supervises and oversees daily operations and transactions within the office. They can also hire, train, and manage staff. A principal broker, also known as a designated broker, oversees the agents to make sure they are meeting all state and national real estate laws. In general, each office will have one designated broker.
Similar to real estate agents, brokers must also stay current on the latest market trends and information in order to be successful. Brokers need to help keep their team of agents up-to-date as well, so they can share best practices or offer guidance when needed. Brokers may also regularly meet with other members of the real estate community, such as mortgage brokers, other real estate agents, or inspectors to stay up-to-date on the latest news.
How Much Does a Real Estate Agent Make?
In most cases, real estate agents are paid based on a commission. This simply means that they receive a percentage of the closing sale price of a property. A real estate agent’s salary varies based on factors such as the. current real estate market, home sale prices, commission percentage, location, size of the brokerage, and type of transactions completed. Generally speaking though, a real estate agent makes anywhere from 5-6% of the purchase price.
It’s important to note that real estate agents don’t walk away with the entire commission amount. Typically, that amount is divided up between the listing agent, buyer’s agent, and the employing brokerage firms. This will impact the overall payout that each agent receives.
The average salary for a real estate agent working in the United States can fall anywhere between $40,000-90,000 per year. It’s quite the range but commonly falls closer to $50,000. In order to be successful in any sales position, it’s important to have a strong tolerance for rejection and persistence when going after new clients. In addition, real estate agents must be attentive and detail-oriented to complete all the necessary tasks and paperwork on time. All of these things can greatly affect a real estate agent’s overall income.
How Much Does a Real Estate Broker Make?
A real estate broker’s salary also varies depending on similar factors to those of an agent and is earned mostly through commission. Commission is one of the biggest rewards that real estate brokers receive. However, their overall income is often higher than an agent’s. This is because, in addition to the commission they make on their own deals, brokers may net additional revenue from the commissions earned by the real estate agents working under them.
The average yearly pay for a real estate broker in the United States is $54,000 per year but can reach as high as $210,000 yearly. As mentioned before, there are always multiple factors that can impact how much they make. This includes the current real estate market and location.
Another difference between the salary of a real estate agent and a real estate broker is that brokers aren’t required to split their commissions with the firm. Any commissions that the broker earns on their own real estate transactions will be theirs. That’s one bonus aspect of continuing education and training to become a broker.