If you're new to the world of real estate and looking to buy, sell, or rent, then you are probably wondering what titles like "real estate agent" and "real estate broker" mean. It's one of the most common questions in the industry, and we're answering it in full!
Types of Real Estate Titles
There are two common types of real estate workers that offer professional services to buy and sell property: The real estate agent, and the managing real estate broker.
Here's an extra-quick explanation of the difference before we get into more detail. A real estate agent has the ability to help buy, sell, and rent, and work directly with people who need these services. A real estate managing broker is a more advanced role that can offer more specific legal advice, specialize in certain markets, and often occupies a more managerial position.
For those of you who have been looking at listings and comparing real estate services in your area, you may have also seen agents refer to themselves as "realtors." We'll talk about that a bit more below, but it's not quite as important a distinction as the difference between agents and brokers.
The Real Estate Sales Agent
A real estate agent is someone who has earned a license to help buy, sell, and rent properties. They serve as a point of contact for interested parties and can aid in a wide variety of services, from listing homes and viewing properties for sale to explaining paperwork or arranging counteroffers.
To become a real estate agent, a person needs to take the required training. The requirements can vary significantly by state, but involve a certain amount of hours in classes and coursework. In Indiana, for example, trainees must complete a 90-hour pre-licensing course.
After training, the trainee must pass a licensing exam, which covers federal real estate laws and more local state laws. When they pass this exam, the trainee can apply for their official real estate agent license. This gives them the ability to start working in the real estate market under the sponsorship of a brokerage or firm that agrees to hire them. Agents are typically paid based on a commission of the sales or rental value of the properties they successfully negotiate.
There are technically no different types of real estate agents, but they can be divided into the different roles they take on during the home-buying process, roles like:
Listing Agent: This agent represents only the seller. That means this agent is primarily interested in selling property at as high a value as possible within the limits of the market.
Buyer's Agent: This agent represents only the buyer, and works to get the best deal possible based on that buyer's goals. Listing and buying agents work together to arrange home showings, pass along necessary paperwork, and let buyers and sellers know each other's demands.
Dual Agent: A dual agent represents both the buyer and seller at once. Here, the agent works to find the best compromise between each party. If one party doesn't have an agent at all, then an agent can take over a limited role as a "transaction agent" to complete the necessary legal steps.
The Real Estate Managing Broker
What is a broker agent? This is a real estate agent with more advanced credentials and different roles in the buying process. Instead of always being a point of contact for customers, managing brokers serve a wider variety of roles and often occupy managerial positions at their firms.
Becoming a managing broker is similar to becoming a real estate agent, but with new hurdles to jump through. Managing Brokers must first complete a certain number of years working as an agent under a sponsorship. As they work to qualify, they also study new coursework. Once again, these courses and required hours are decided state-by-state, but broker courses tend to cover many important details like real estate law, ethics, contract law, taxes, real estate insurance, and much more.
Once both experience and coursework are completed, brokers sit for a separate exam to earn their new license. After this, managing brokers typically divide into several different roles at a real estate firm:
Designated broker: The designated, or "principal," broker, supervises all the agents at their firm. They guarantee compliance with all state and federal laws and generally make sure everything is working. These may be independent real estate brokers that start their own firms or brokers that move up in a company.
Managing broker: A managing broker oversees the basic operations of the firm, and is responsible for directing and training real estate agents. Depending on the size of the firm, there can be overlap with the designated broker here.
Associate broker: These brokers work under managing brokers in roles similar to real estate agents, but with more in-depth knowledge and consultation options.
Wait, What Does a Realtor Do?
While we've been focused on the differences between real estate agent and managing broker, there's another title called "realtor" in the mix. This doesn't refer to any government-managed exams or licenses. Instead, it's a separate certification provided to members of the National Association of Realtors.
Joining the National Association of Realtors requires completing courses, paying membership dues, and adhering to the Association's Code of Ethics. It's an extra guarantee that the agent or broker you are working for will be honest, helpful, and informative. There's not really any broker vs. realtor question, because both agents and brokers can be realtors.
When in Doubt, Check Licensing
When looking for property services, always check the types of real estate licenses for the people you meet. You will want to know if they are a broker or an agent, what firm they work for, how much experience they have, and if they are a realtor or not. This also helps weed out scammers!
For more information on property services, finding the right home, and much more, visit Lancia Homes today.