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While a broker may be more of an expert in the field, and have specific knowledge about your home purchase, a real estate agent is typically able to know their way around many different types of properties.
The “real estate agent vs realtor salary” is a question that many people have. The two terms are often confused, but there are some key differences between the two.
Anyone with a real estate license may work as a real estate agent, but they must be affiliated with a sponsoring agency. A broker also has an extra license that permits them to operate alone or employ agents to work for them. There are several more distinctions between being a real estate agent and being a broker, so keep reading to find out which is the best option for you.
In a nutshell, what is the difference between a real estate agent and a real estate broker?
(National Association of Realtors Member Profile for 2020)
What if I told you that A Realtor is a term that shows a person is affiliated with the National Association of Realtors, not another form of real estate professional (NAR). This implies that a Realtor may also be a real estate agent or broker. In addition to state legislation, they are required to follow the NAR’s code of ethics. While the NAR places more standards on professionals, this differentiation fosters confidence and may help agents make more money. Realtors, for example, earn an average of $49,700 a year.
Check out our post on what is a Realtor for additional information on this issue and the perks of membership.
Real estate agents come in a variety of shapes and sizes.
Real estate brokers come in a variety of shapes and sizes, each with its own set of duties and specialties. It is not essential to specialize as a listing agent or a buyer’s agent. A real estate agent may deal with both buyers and sellers in most circumstances, therefore they will have several chances to be a buyer’s agent, listing agent, dual agent, or transaction agent over their career.
The following are the four primary categories of real estate agents:
- A listing agent represents a homeowner throughout the sale of their house and negotiates on their behalf to get the highest possible price.
- Buyer’s agent: A buyer’s agent represents homebuyers in their quest for a new house, leading them through the process to ensure that they acquire the greatest property at the best price.
- In a single real estate transaction, a dual agent represents both the buyer and the seller.
- When a buyer does not have access to a real estate agent, the selling agent might serve as a transaction agent and write the offer on their behalf.
Real estate brokers come in a variety of shapes and sizes.
Depending on the professional path they choose, real estate brokers have a variety of duties and titles. Whatever the case may be, switching from real estate agent to broker brings up a slew of new opportunities. Consider becoming a designated, managing, or associate broker, depending on your requirements and goals.
The following are the three main categories of real estate brokers:
- Designated real estate brokers: This is the person who is legally responsible for all transactions carried out by the agents under their supervision. They are also known as broker-owners.
- Managing real estate brokers: This is the person in charge of a brokerage firm’s day-to-day operations.
- Individuals who have improved their real estate license but have not taken on additional management or operational duties are classified as associate real estate brokers.
Real Estate Agents vs. Brokers’ Responsibilities
Only a broker may own real estate businesses or manage agents, which is the major distinction between real estate agents and brokers. If you’re an agent, you’ll operate under the supervision of a sponsored broker and concentrate on helping buyers and sellers. Brokers may perform the same functions as agents, but they additionally deal with contracts, marketing, property management, and training.
The Advantages of Being a Broker vs. an Agent in Real Estate
Being a real estate broker rather than an agent provides a number of advantages. Though there is more hard work and knowledge required, becoming a broker enables you to advance your career in ways that being a real estate agent does not.
The following are the top five advantages of working as a real estate broker:
1. Real estate brokers have the option to operate their own brokerage.
Licensed brokers, unlike real estate agents, may form their own brokerage to serve buyers and sellers of real estate. Brokers have the option of working alone (keeping 100% of their commissions) or hiring other real estate agents or associate brokers to operate under their license (and split their commissions). Alternatively, you might form a company where agents receive a 100% commission but must pay desk fees and other expenses that you choose.
If you don’t want to create your own brokerage but want to teach and manage agents, a managing broker role could be right for you. A managing broker is in charge of other agents and brokers inside a brokerage, therefore it’s an excellent job for people with a lot of expertise.
2. Real estate brokers make more money.
While having more employment alternatives and responsibilities is desirable, most agents prefer to become real estate brokers in order to increase their earnings. Realtors earn an average of $49,700 per year, while broker-owners earn between $93,800 and $121,400 per year, depending on whether or not they are actively selling property, according to the NAR 2020 Member Profile.
Here’s a short rundown of the pay disparities between real estate agents and brokers:
Real Estate Agents’ Median Annual Income vs. Brokers’
(National Association of Realtors Member Profile for 2020)
3. Real estate brokers get better commission splits than other types of brokers.
You can always work as an associate broker if you don’t have an entrepreneurial spirit or prefer the security of working under another broker. While you won’t have any extra obligations at the brokerage than those of an agent, your licensing and experience may allow you to negotiate a bigger commission split.
In every job path, knowing where you are, what your alternatives are, and what income and commission you can demand can give you an edge. When a result, understanding commission splits is critical as you join the market and pursue your objectives. Read the in-depth tutorial on how real estate commission splits operate if you need a reminder.
4. Property management companies may be run by real estate brokers.
Another incentive to earn your broker’s license is to be able to establish a property management firm. Property management businesses serve as a liaison between a rental property’s owner and the tenants that live there.
Real estate operations, such as leasing and collecting rent, must be undertaken under the supervision of a broker’s license. As a result, by law, every property management company must have a certified real estate broker on staff. Property management may be a terrific supplemental cash stream or a new career opportunity if investment properties are presently trendy in your region.
5. Real estate brokers may use their marketing experience to their advantage.
Real estate brokers, on average, have more experience in the field than many agents. Furthermore, real estate brokers usually have more training and specialities as well as real estate designations than many agents in their area. As a result, customers who are considering buying or selling a house in the future are more inclined to trust seasoned local brokers than younger, less experienced agents.
Advantages of Working as a Real Estate Agent vs. Working as a Broker
Real estate agents are limited in their ability to participate in as many real estate-related activities as brokers. Agents, on the other hand, do not have nearly as many prelicensing requirements as brokers. Furthermore, unlike managing brokers, agents have less administrative tasks and are not financially accountable for other agents.
The following are the three key advantages of working as a real estate agent rather than a broker:
1. There are less licensing requirements for agents.
Aspiring real estate agents must complete administrative criteria, attend state-specific prelicensing courses, and pass a licensing test in order to get a real estate agent license. They may then begin representing clients at that moment.
Brokers, on the other hand, must finish far more training and pass an even more rigorous test. As a result, many real estate agents would rather stay as agents than complete the extra procedures necessary to become brokers.
2. Agents are only liable for a certain amount of money.
Real estate agents, unlike managing brokers, are unable to create their own agency or manage other real estate agents. As a result, real estate agents cannot be held liable for the activities of other agents, either financially or legally. Real estate agents have less liability than real estate brokers due to their lower obligations and responsibilities.
3. Agents are entrusted with less managerial responsibilities.
Agents are in charge of representing purchasers and sellers in real estate transactions. Real estate brokers, on the other hand, are often in charge of a variety of managerial tasks linked to the brokerage’s business. Contract drafting, administrative activities, and hiring and onboarding agents are common examples of these responsibilities. Many agents would rather concentrate on their customers than on administration and management.
How to Become a Broker or Agent in Real Estate
To become a real estate agent, you must complete the requisite number of prelicensing courses. Then you must pass the real estate test in your state and pick a brokerage. Always check with your state’s real estate commission for the most up-to-date standards.
Becoming a broker is a more difficult and time-consuming procedure. In most states, you’ll also need to earn some experience as an agent before applying for your broker’s license, as well as take extra seminars. Read more about how to become a real estate broker for additional information.
Here are some instances of how state licensing requirements for real estate agents and brokers differ:
Conclusion
Brokers have greater experience, get more training, and earn more money than agents. They are also the only real estate professionals that have the ability to start their own brokerage or property management company. Agents, on the other hand, have lower licensing requirements and are not financially responsible for other agents. If you wish to create your own brokerage, earn more money, or manage properties, consider upgrading to a broker’s license.
Getting and upgrading your real estate agent license is straightforward with an online real estate school like McKissock Learning, whether you’re just beginning your real estate profession or ready to progress to a broker’s license. It provides real estate agents and brokers with immediately relevant and easy-to-understand license courses that are meant to help you earn more money and operate more effectively. To get started, just click the button below.
McKissock Learning is a great place to start.
A real estate agent license is a professional certification that provides the person with the ability to buy, sell, and manage property. A broker license is an individual who can offer advice on buying and selling properties.
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