Real estate brokers are often interchanged with real estate agents, but there is a distinct difference between the two. If you are new in the real estate industry or a home buyer or seller, terms addressing real estate professionals can be confusing at times. That being said, let’s talk about more of what a real estate broker is and what makes them different to other real estate professionals.
Real Estate Broker by Definition
A real estate broker is a licensed professional who helps clients buy, sell or lease properties. He or she represents the client in all business dealings related to the transaction. This might be confusing as a real estate agent can do such things as well.
However, real estate brokers, in addition to being licensed real estate agents, have also taken extra steps to get certified. In order to be a broker, one must pass a broker’s exam, which is more difficult than the agent’s exam. Broker is a term that we normally see from a firm. But in many cases, a broker can also be an individual practicing on his or her own. They are entitled to handle all real estate transactions just like other real estate agents but likely, they are more familiar with national real estate laws and other complex rules and regulations which a usual licensed real estate agent might not be as updated with.
In sum, real estate brokers are licensed real estate professionals who have taken extra steps to get certified so they can help their clients buy or sell properties. They are a step above real estate agents and are familiar with complex rules and regulations. Even associate brokers or those who own brokerage firm are considered real estate brokers.
What Can A Real Estate Broker Do?
Another best explanation that shows how a licensed real estate broker is different from a licensed real estate agent is by looking at the scope of their work and how they are able to provide service just by themselves.
Yes, unlike agents in the real estate business, a real estate broker can work and provide services just themselves or hire agents to work for them. In most cases, you will find that a real estate broker owns a firm or a brokerage and employs other real estate agents to work under him or her
A real estate broker can also transact for their own account. managing brokers oversee transactions, but not limited to, listing agreements, purchase agreements and leases. They also review documents prepared by real estate agents before it is presented to the clients.
To give you a better understanding here’s what a real estate brokerage firm or broker can do outside the usual agent-client relationship in a real estate transaction:
- They can move in and out of an escrow account
- They can mediate an agreement between the parties
- Real estate brokers work alone or can hire an agent/real estate professional
- They don’t have to work in a real estate office.
- They can open and operate their own business.
Common Requirements To Be a Real Estate Broker
Just like any other profession, there are requirements that you need to comply with before you can legally practice as a real estate broker. For starters, for someone to be called a broker, a license in the state where they will be conducting business is required. Requirements for a broker’s license may vary from state to state, but the usual requirements would be around 21 years of age, completion of certain education courses related to real estate and passing a broker’s exam. Hours of broker education, passing a state licensing and having a background that is free from any criminal conviction that might jeopardize the interest of the clients are also some of the general requirements.
Different Types of Real Estate Brokers
In general, there are three types of real estate brokers when referring to individual responsibility and affiliation.
Principal Broker or Designated Broker
Every firm is required to have a designated broker who is responsible for the actions of the firm and its employees. He or she is also the one who will be held accountable if there are any complaints against the firm or if an agent/employee commits any violation. The designated broker is usually the one who owns the firm or has the most experience in real estate brokerage.
Responsible for handling the day-to-day operations of the firm, a managing broker is someone who is under the supervision of the designated broker. A managing broker can also hire and train new agents, review and approve documents, and represent the firm in certain real estate transactions.
Some big firms have associate brokers who are experienced and licensed real estate professionals. They usually have the same authority and responsibility as managing brokers, but they don’t have the power to hire or fire employees. Associate brokers may only work under a single designated broker/brokerage.
The Bottom Line
Now that you know the differences between a real estate agent and a broker, as well as the different types of brokers, it’s time to decide which one is the best for you. If you’re still undecided or don’t know how to find a real estate broker, you can always consult with a real estate lawyer to help you out.
If you are in California, feel free to contact Westlake Top Real Estate Agent. We provide consultation as well as other real estate services. Call us at 818-941-7437 today!