UNITED STATES—Today the real estate market has become more complex, with an infinite amount of information that needs to be processed daily. The average person interested in buying or selling a house will need help navigating through this maze of numbers, laws, and options.
The real estate market is so large that you’ll find several types of professionals who can help you buy or sell your home: real estate agents, brokers, and appraisers, to name a few.
What most people don’t know is that there is a significant difference between a real estate agent and a broker, including:
A real estate agent is at least 18 years old and must complete licensing exams to practice in the state where they reside. Real estate licensing information is available online at your state’s website; more than likely, you will find it on the secretary of state or department of commerce websites.
A real estate agent is required to complete continuing education courses to remain active and licensed, while brokers are not necessarily needed to continue their professional education once they become licensed. Brokers are required to have additional training and pass more rigorous national examinations before acquiring their license.
A broker is trained in contract law, finance, appraisal skills, and property management, among other things that agents are not required to learn. An agent may be working for you or the broker, depending on where they work and how they operate their business.
Real estate brokers typically receive a higher commission percentage on the sale of a property than agents do, often a whole percentage point or more because agents work for agents and brokers work for their clients.
Agents’ commissions depend on the price of the home being sold, but they are usually between five to seven percent depending on how much the house sale is worth. Brokers’ commissions are typically seven to nine percent of the sale price, while agents’ commissions range between five and seven percent on average.
One of the ways a broker stands out from a real estate agent is that they often receive a percentage of their client’s income, which benefits both parties. For example, a real estate broker might get a portion of the landlord’s monthly rent coming in.
In effect, real estate brokers benefit from their client’s success, and real estate agents have a salary. Real estate agents and professionals who realize you need help can make all the difference when it comes to real estate fraud.
Understanding the difference between real estate agents and brokers can help you avoid real estate fraud, protect your wallet and put an end to dealing with incompetent realtors that are doing more harm than good.
The average real estate agent will have had more experience than an average real-estate broker because it usually takes several years of successful sales to get a broker’s license. After working for several years handling sales, an agent will have the experience necessary to provide good insight into what might happen with your property in different price ranges and neighborhoods.
If you are purchasing a house, this could save you thousands of dollars. A broker is more interested in making money through commissions than in offering sound advice.
When it comes time to sell your house, a real estate agent will also be able to give you an appraisal of the value of your property. Both agents and brokers can appraise homes, but agents are required to complete a course in appraisal techniques and pass an exam before they can start doing appraisals.
Appraisal ability is another reason why real estate agents almost always have more experience than brokers. It usually takes several years to become a successful agent and go on to become a broker.
In this article, we explained the difference between brokers and agents in an easy-to-understand way. We recommend finding out what type of real estate professional you are dealing with before you decide whether you want to hire someone or not.
It will give you a better idea if the agent is working for you, and it will give your agent a better idea of what services they need to provide for you.