Are you like most people who get confused with the terms “real estate agents” and “real estate brokers”? If you are, then you are not alone.
A lot of people think that these two terms can be used interchangeably because they both involve selling or buying property. However, there is actually a big difference between the two.
What really is a real estate broker and how it differs from an agent? Both can handle real estate transactions but there are limitations to what one can do. In this article, we will be discussing the differences between real estate agents and brokers.
Real Estate Agent Vs Real Estate Broker: Requirement Differences
Real estate agents are licensed to help people buy or sell properties. They are also known as Realtors. In order to become licensed real estate agents, you need to be at least 18 years old and pass a written exam. You also need to have no criminal record.
A licensed real estate agent is required to work under the supervision of a licensed broker. He or she cannot work independently.
On the other hand, in order to become a real estate broker, you need to be at least 21 years old and pass a written exam. You also need to have at least two years of experience working in the real estate industry as a licensed real estate agent for a real estate firm or a broker’s firm. You also need to take an additional course on real estate law.
Unlike other real estate agents, real estate brokers can work independently. They are also allowed to supervise licensed real estate agents. A licensed real estate broker can open their own real estate business or own brokerage as well as hire other agents such as designated real estate brokers, managing brokers, and associate brokers.
Note: Age requirement differs from state to state. In California, you only have to be 18 years old to become a licensed real estate agent while in some states, the age limit is 21.
Real Estate Agent Vs Real Estate Broker: Education Requirements
In California, a real estate license for a broker or broker’s license takes more education courses than an agent. For agents, only three college-level courses are required. Brokers, on the other hand, need eight college-level courses.
Though both positions don’t necessarily require a college degree, brokers typically have a degree in real estate, finance, or business administration which eventually meets the education requirements of the state.
Real Estate Agent Vs Real Estate Broker: Job Description
A real estate agent’s job is to help people buy or sell properties. That means they can either be a buyer’s agent or a seller’s agent (listing agent).
Buyer’s agents are those who help buyers find properties that fit their budget and preferences. On the other hand, sellers’ agents are those who help sellers market their property and find potential buyers.
Real estate agents are also responsible for providing the overall process of organizing and submitting documentation as well as negotiating contracts.
A real estate broker, on the other hand, can do everything that an agent does. But since they are licensed to work independently, they can also represent both buyers and sellers in a real estate transaction. In addition to that, brokers can also open their own firms and hire other agents to work for them.
They oversee the agents and make sure that they are following the rules and regulations set by the state as well as making sure they comply with the National Real Estate Law/National Real Estate Laws.
Being a broker also opens the door to more opportunities in property management. Simply put, brokers are ahead of the game when it comes to education and job responsibilities. They have more knowledge about the industry and can provide more services to clients.
Real Estate Agent Vs Real Estate Broker: Exam Requirements
Staying in California, the exam for both positions is the same. The only difference is that brokers’ standard is higher since they need to answer more questions correctly to pass. The state-mandated exam covers different aspects of real estate including, but not limited to, agency relationships, property ownership, transfer of property interests, contracts, leases, finance, fair housing, and disclosure requirements.
The common setup for examination is real estate is required to answer a 150-question test where 70% must be answered correctly to pass within the three hours allotted time.
Brokers, on the other hand, need to answer a 200-question test with a 75% passing grade but are given five hours to finish the exam.
The Bottom Line
If you are someone who is looking to get into the real estate industry with the goal of eventually owning your own business, then becoming a broker may be the best route for you.
However, if you want to get your feet wet first and see if this career is for you, then becoming an agent is a great way to start. Who knows, you might even like it so much that you eventually decide to take your broker exams.
Now, if you are a buyer or a seller of a property, it really doesn’t matter whether you’re dealing with an agent or a real estate broker. As long as they are licensed and knowledgeable about the real estate market, they will be able to help you with your needs.