Knowing the duties of real estate brokers and how they
differ from real estate agents will help you meet your needs, whether you want
to become a broker or hire one to buy or sell property.
What Exactly Is a Real Estate Broker?
A broker is a real estate professional who is licensed by
each state to help home buyers with real estate transactions. Licensed brokers
work for real estate brokerage firms or for themselves, hiring and supervising
agents, handling escrow account funds, writing property contracts, and ensuring
that real estate sales follow state laws. Brokers receive a portion of the real
estate commissions earned by the listing agents who work for them.
What Does a Real Estate Broker Do?
Brokers are responsible for a variety of real estate
industry tasks, including:
Contracts: Real estate brokers draft, edit, and submit
property purchase contracts.
Employee hiring and supervision: A broker hires new agents
or real estate salespeople, supervises sales agents' daily activities, provides
opportunities for additional training, and collects a portion of their agent
commission when they sell a property.
Finances: Brokers may transfer funds into and out of an
escrow account, which is a type of real estate business account used to hold
potential buyers' or lenders' purchase price funds until the buyers or sellers
qualify for a financial transaction.
Legal issues and oversight: If a legal dispute arises,
brokers may mediate or arbitrate. Brokers also ensure that sellers and buyers
meet paperwork deadlines and follow real estate law requirements.
Property preparation: Before selling, a broker may assist
sellers with property management, such as preparing for open houses or
assisting with listing services.
"I'm very passionate about real estate because it's a
dreamers' industry." You have real estate brokers. You have customers. You
have buyers. You have commercial brokers and residential brokers. There are
various types of software providers. There are brokerage firms. All of these
people are coming from all different places, industries and companies,
designers and marketing people, real estate, engineers, to come together, mix
it up, and build. There is so much room for improvement." ”Robert Reffkin,
Compass's founder and CEO
Real Estate Broker vs Agent: What's the Difference?
Real estate brokers and real estate agents are not the same,
despite the fact that both can become members of the National Association of
Realtors (NAR). Among the distinctions are:
Contracts: Even if your real estate agent provides you with
a listing agreement, the contract binds you to the real estate brokerage rather
than the agent.
Education: In order to obtain a real estate broker license,
you must complete continuing education requirements. To keep your license
current, you'll need to take additional classes on a regular basis.
Experience: While you do not need prior experience to become
a real estate agent, you will need several years of sales experience to obtain
a brokerage license.
Licensure: Passing a licensing exam is one of the
requirements for becoming a licensed real estate agent. Real estate brokers, on
the other hand, must have both a real estate license and a state-issued real
estate broker license (by passing a separate broker exam).
3 Types of Real Estate Brokers
Real estate brokers are classified into one of three types:
1. Associate broker: An associate broker, also known as a
broker-salesperson or affiliate broker, assists the principal broker with real
estate transactions and, depending on the circumstances, may be an independent
contractor.
2. Designated broker: A designated broker, also known as a
principal broker, handles and oversees the legal aspects of all property-related
transactions at a brokerage, ensuring that real estate agents follow real
estate laws. A brokerage may only have one designated broker working at any
given time.
3. Managing broker: As the name implies, a managing broker
oversees day-to-day operations, including human resources responsibilities such
as training and mentoring new agents, supervising administrative tasks, and
dealing with licensing issues. Occasionally, designated brokers will also
assume the responsibilities of a managing broker.
