The Differences Between a Real Estate Leasing Agent, a Broker, and a Realtor
If you’re selling your home, chances are that you’ll need some help to find suitable buyers. And while many people know that real estate agents help facilitate the transaction, there are a number of real estate professionals that are involved throughout the process that you should know about. These include:
- Real estate agents
- Real estate brokers
- Listing Agents
- Buyer’s Agents
In this article, we will clear up any confusion between real estate professionals’ titles, what actions they perform, roles in the and more.
What is a Real Estate Agent?
A real estate agent is a licensed professional that helps people buy, sell, and/or rent housing and real estate.
Obtaining a real estate license in a particular state requires that individuals must have to undergo pre-licensing training through hours of in-depth learning. These hours and other requirements can vary depending on jurisdiction and state requirements:
- In New York, real estate agents are required to take 75 hours of pre-licensing training.
- By contrast, California must undergo more than 130 hours of licensed coursework.
- The lowest amount of credit hours is Massachusetts, only requiring 24 hours of training.
Once pre-licensing training is finished, agents then take a written licensing exam. In most states, the written exam is usually divided between two sections:
- General real estate principles and federal real estate laws
- State-specific laws
After successfully passing the exam, individuals earn their license and can then apply to be accepted by a brokerage, officially beginning work with homebuyers, sellers, and those looking for rentals.
What is a Real Estate Broker?
A real estate broker is a real estate agent that has taken further education as required by state-specific laws and has satisfactorily passed a broker’s license exam. Brokers are required to learn more about the real estate industry, including contracts, taxes, insurance, and ethics. Furthermore, brokers also delve deeper into the legal workings of operating a brokerage, property management, and real estate investments.
Most states require real estate brokers to have a number of years of experience as an agent beforehand to become a broker. In most states, three years is the standard period of time required.
Types of Real Estate Brokers
Real estate brokers are not all the same, falling into different categories depending on which roles they perform in transactions:
- Principal/designated broker: Every real estate office has an individual designated as a principal/designated broker. This individual is responsible for overseeing all licensed real estate agents employed by the firm, ensuring that all real estate agents are working in compliance with state and national laws. Similar to real estate agents, principal brokers get paid on commission, receiving a portion of the commissions of the sales agents they are tasked with supervising. These brokers may also receive an annual base salary depending on the structure of the company they work for.
- Managing broker: Managing brokers are responsible for the management of daily operations of the office and transactions relating to the brokerage. They are part of a managerial role, working closely with agents (hiring and training), as well as managing administrative staff. Depending on the real estate office, some principal/designated brokers also serve as a managing broker.
- Associate broker: An associate broker is an individual that has a broker’s license, but works under a managing broker. Associate brokers are also usually not tasked with supervising other real estate agents, instead focusing on transactions requiring more expertise. Alternate names given to this job title include broker associate, affiliate broker, or broker-salesperson.
What is a Realtor?
One common misconception between real estate agents and a realtor is that they are interchangeable names.
In truth, there are similarities, but the main difference is that realtors are members of the National Association of Realtors (NAR). As a member, this individual adheres to the high standards of the NAR and its code of ethical conduct. In return, membership in the NAR provides a number of benefits, including access to transaction management services and market data for the real estate industry.
What is a Listing Agent?
A listing agent is simply the title given to a real estate agent who legally represents a home seller. Listing agents assist sellers with a a number of tasks during the selling process, including:
- Fairly pricing the home/property
- Suggesting cost-effective home improvements
- Overseeing the home inspection process
- Staging the home for sale
- Marketing the home on MLS (Multiple Listing Service) and other outlets
- Holding open houses
- Coordinating showings with prospective homebuyers
- Negotiating directly with buyers (and their own agents)
- Facilitating closing procedures
Listing agents generally do not receive any compensation until a property is sold. When the home is sold, the agent receives a commission, which is a percentage of the home/property price.
#v What is a Buyer’s Agent?
A buyer’s agent represents home buyers in a real estate transaction. They are responsible for assisting buyers through the entire process of evaluating properties and purchasing a home. This includes:
- Finding the right home that meets their client’s specifications
- Negotiating an offer
- Recommending other professionals to facilitate the transaction, including real estate attorneys, mortgage brokers, and settlement companies
- Troubleshooting common problems, including home appraisals and inspections
Because the commission comes from the home sale, buyers do not have to pay for the services of a buyer’s agent. Instead, the commission from the seller pays for both the listing agent and the buyer’s agent from the listing agent’s fee.