The term “broker” is used across various fields, each with its unique context and meaning, while most commonly associated with real estate broker. When you’re in the market to buy or sell a home, you’ll come across various titles for the professionals involved in the process. These terms can be confusing if you’re not well-versed in this field. So, what sets a real estate broker apart from a realtor or a real estate agent? In this article, we break down the role of a real estate broker and how it distinguishes them from other roles in the industry.
What Is a Real Estate Broker?
A real estate broker is a certified expert who works within a Real Estate Brokerage and helps people buy, sell, and transfer properties. Using their deep knowledge of the property market, they guide clients through paperwork, decision-making, and legal steps. Brokers can work solo, set up their own agencies, or hire additional agents.
A Broker in Real Estate holds a position of authority and expertise within a Real Estate Brokerage. They are central in facilitating property transactions and ensuring all parties involved are well-informed and legally compliant. They often manage a team of real estate pros within the Real Estate Brokerage, helping them craft, tweak, and finalize property deals and offers.
⚠️Tip: Differentiate clearly between real estate brokers, agents, and Realtors. These terms are often confused, so provide concise definitions.
Key Takeaways
- A Real Estate Agent is a licensed professional assisting clients in property transactions under a broker’s supervision.
- A Realtor is a real estate agent or broker, NAR member, adhering to ethical standards.
- Brokers have the potential to earn a substantial income, influenced by location, experience, and market conditions.
- The primary difference between agents and brokers is in licensing and responsibilities.
What Does a Real Estate Broker Do?
They have a broad range of duties, including:
- Acting as a witness when signing contracts and other legal paperwork
- Providing training and ongoing education for career advancement in this field
- Resolving legal disputes and conflicts
- Keeping buyers and sellers in the loop to meet all deadlines and industry standards
- Moving money between escrow accounts
- Preparing and submitting property-related documents
- Promoting their property listings to clients and the general public
- Reviewing and tweaking important papers like purchase agreements
- Helping clients get their homes ready for the market
- Overseeing and aiding the work of real estate brokers in transactions
3 Types of Real Estate Brokers
There are three main categories of real estate agents, each with varying levels of responsibility:
1. Principal or Designated Brokers
These brokers are in charge of making sure that real estate agents follow all state and federal laws. Every real estate office has one of these brokers at the helm.
2. Managing Brokers
These brokers handle the day-to-day operations of the real estate office. This includes hiring agents, training new staff, and overseeing office admin. They’re also responsible for things like onboarding new agents and offering ongoing training options.
3. Associate Brokers
These are brokers who have their licenses but choose to work under another broker’s guidance. Importantly, associate brokers usually don’t oversee other agents.
Real Estate Broker Salary
It’s essential to understand that real estate brokers generally earn more than real estate agents. The average annual salary for a real estate agent hovers around $94,300. On the other hand, brokers often exceed this figure. On average, a real estate broker makes $75,068 annually plus an additional $42,000 in commission. However, the specific figures for average annual salaries vary widely depending on the source, the location, and the market conditions.
Real Estate Broker vs. Agent and Realtor
When it comes to job roles and work settings, real estate brokers have some common ground with other roles in the field. However, there are key distinctions:
Real Estate Broker
Real estate brokers and agents both help clients with property transactions. However, brokers have a higher-level license, allowing them to lead teams of agents. Being a broker is riskier as they’re accountable for their actions and those of their team. Successful brokers focus on team development, offering training, marketing, and recommendations.
Agent and Realtor
You can be both a broker and a realtor at the same time. The term ‘realtor’ refers to any real estate professional who’s a member of the National Association of Realtors (NAR). NAR members operate at the state level and handle issues through a local board. Both agents and brokers can be realtors, but the qualifications can vary by state.
To become a realtor, you need to pass an exam, get sponsorship from a broker, and clear a state background check. Licenses need to be renewed regularly, and failure to do so can result in removal from NAR’s active list.
Conclusion
In real estate, brokers stand out for their higher earnings compared to agents. On average, a real estate broker makes more than a real estate agent, largely owing to their added responsibilities and the commissions they earn, especially from the transactions managed by their team of agents. While the specific figures can vary based on location and market conditions, brokers often enjoy a more financially rewarding career. However, it’s important to remember that this higher earning potential comes with increased responsibilities and risks.
FAQs
It is a licensed professional who assists clients in buying, selling, and leasing properties, often overseeing teams of agents.
Brokers manage property transactions, negotiate deals, ensure legal compliance, oversee agents, and earn commissions from transactions, guiding clients through this complexities.
Brokers have higher licensing, can manage agents, and typically earn more due to added responsibilities.
Yes, brokers can earn a substantial income, with earnings from commissions, but it varies based on location, experience, and market conditions.
To become a broker, complete required courses, gain experience as an agent, pass a broker’s exam, get sponsorship, clear a background check, and renew your license regularly, possibly with continuing education. Check your state’s regulations for specifics.
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