What is a real agent?

How does a broker work?

You may not be aware of the difference between a broker and a real-estate broker when you start the process of selling or buying a house. Sometimes, when someone refers to a real estate broker, they are actually talking about a real estate brokerage instead of an individual.The word real estate broker”

is often used interchangeably with Realtor(r), real estate agent, buyer’s broker, and seller’s broker. It shouldn’t. Real Estate brokers are distinctly different.

While the differences in these distinctions might not cause big problems ordinarily, it is something that you should know in case you have issues in your real estate transaction.

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We will pull apart this industry terminology to better understand the difference between real estate brokers and agents and what they do. By the time you’re done reading, you’ll understand the definition of a real estate broker and a real estate brokerage.

What is a Real Estate Broker?

A significant amount of people ask what a real estate broker is and how their role in real estate works.

A broker in real estate has the same qualifications as an agent but is able to do more. A broker is a licensed agent who also holds a broker’s licence. The broker can help buyers and sellers, but they are also licensed real estate agents.

The broker must ensure that all transactions are legal and properly recorded. A broker is able to work independently, just like a real agent. Just like an agent, a broker can work for a brokerage, but they can also run or own a real estate brokerage.

Agents Need to Work for Real Estate Brokers

Real estate agents must work for a broker or brokerage and cannot deal with transactions themselves. Agents deal with clients, helping them through the transaction, and brokers ensure this is done correctly.

Real estate agents have to be overseen by a broker. A broker is responsible for overseeing any dispute the agent might be involved in.

The broker will ensure that all real estate transactions are within the federal and state real property laws. A significant responsibility is ensuring all the agents under the brokerage license follow fair housing guidelines.

When you sign an agency or listing agreement from your real estate agent, you will actually be signing with the agent’s broker. So if your agent was to leave their real estate brokerage, you might have to work with another agent from the brokerage since you have signed the agreement with the broker and not the agent.

What is a Real Estate Brokerage?

The definition of a real estate brokerage is fairly straightforward.

A brokerage in real estate is a company involved in the day to day operations of listing and selling all kinds of property. A real estate brokerage may be commercial or residential in nature. Real estate brokerages are usually owned and managed by an independent broker. Real Estate brokerages can be franchised or remain independent.

What Do Real Estate Brokers Do?

Real estate brokers are similar to agents but with the added ability to operate their own businesses. They can also work independently and have agents working for them.

Brokers are often found working for real-estate businesses with all their agents reporting to them. While real estate brokers can do the same job as agents, they require more licenses and training.

Brokers also have more responsibility than agents because they have to make sure transactions are lawful and the money goes where it should. They are responsible for the day-to-day operations to ensure everything runs smoothly.

Brokers in Real Estate Have Different Responsibilities

Real estate agents don’t have anything to do with the transactions themselves; it is the broker’s job to move earnest deposit money into and out of escrow accounts.

Responsibilities of a Real Estate Brokerage

Brokers can also hire real estate agents to work for them or under them in the brokerage. If there is a legal dispute, the broker might be able to offer some mediation.

When brokers decide to set up their own brokerage, they are sometimes known as a broker-owner. Regardless of whether they’re running their own brokerage or working for someone else, they must be licensed in that state. The broker license is on top of a real estate license for the state they’re working in.

The rules regarding broker licenses vary in different states, though brokers usually need to already be licensed as a real estate agent in the state they are based.

Normally brokers need to be at least 21 years old, not have criminal convictions and live in the state where they are applying for their license.

Before getting their license, they will need to pass a broker exam. Before they take the licensing exam, they need a certain amount of education course matter.

Summary of Real Estate Brokerage Tasks

Recruit real estate agents and Realtors

  • Mentoring new agents
  • Managing all the real estate agents and other employees
  • Set yearly achievement goals for the brokerage
  • Establish marketing plans for the company and its agents
  • Adverting of property and open houses
  • Maintaining a company website
  • Marking company listings in the best real estate websites
  • Provide training and ongoing education to agents
  • Real Estate sales and rental property leasing
  • Property management
  • Real Estate Broker Types

There are a few different types when you are talking about a real estate broker, and you mean a person and not a brokerage.

Principal Brokers

Sometimes also referred to as a designated broker or sponsoring broker, the principal is responsible for every transaction that takes place through the brokerage.

It is the job of the principal broker to make sure that all of the real estate agents are following the state laws. The principal broker is responsible for ensuring that all agents are following the state laws. For this reason, every brokerage has to have a principal broker working for them.

Managing Brokers

The managing broker managers the everyday activities of the brokerage. The responsibilities of this type of broker are less related to transactions and more about managing agents.

They will likely manage continuing education and training. They might also be responsible for mentoring new agents when they join the brokerage.

It is more common in smaller agencies for principal brokers to also have the responsibility of a managing broker.

Associate Brokers

In larger, busier brokerages, the principal broker might hire an associate broker to help deal with the level of transactions the real estate brokerage is dealing with. Associated brokers normally operate as independent contractors, but this doesn’t mean they are allowed to work with multiple brokerages simultaneously, as this could cause a conflict of interest.

This type of broker can also be known as an affiliate broker, a broker associate, or a broker salesperson.

Comparing Brokers to Other Real Estate Professionals

Let’s look at brokers vs. Realtors and brokers vs. real estate agents.

Brokers and Realtors

Broker vs. Real Estate Agent

A Realtor(r) could be either a real estate agent or a broker. The National Association of Realtors is the largest trade association in America.

Realtors are licensed real-estate salespersons. You must agree to the code of ethics when you become a Realtor(r). Whether you are representing home buyers or sellers, a Realtor(r) must be cognizant of following the code.

Commission for Realtors is paid by the real estate brokerage.

Brokers vs Real Estate Agent

Typically real estate agents are independent contractors and not employed by the brokerage. The real estate transactions they are involved in always need to be overseen by a broker working in the brokerage.

What is a Transaction Broker?

A transaction broker should not be confused with a real estate brokerage owner. They are a type of real estate agent who does not represent a specific party in property transactions.

If you’re looking to save money on a real estate deal, you might want to consider hiring a transaction broker instead of a traditional agent. A transaction broker is a type of agent that charges a flat fee, rather than a commission. A flat fee is a better option than a commission. However, listing and selling agents have to do a lot of work. How Real Estate Agents and Brokers Earn Money

Both agents and brokers make money when a property is sold. While you might expect that the 5 or 6% commission paid at closing goes to the real estate agent, it isn’t quite that simple.

Typically half of the commission will go to the brokerage working for the buyer, with the other half going to the brokerage working for the seller. The broker will then split that commission with the real estate agent involved in the transaction.

The commission fees could be a 50/50 split, but it could be 60/40 or even 80/20, depending on the agreement between the broker and the real estate agent. However, it is more common for newer agents to not get such great splits. However, more experienced agents will likely get better splits with their broker.

Real estate broker commissions are usually split

For instance, if your house sells for $300,000.10 and you have arranged a 15% commission from your agent, your total cost would be $15,000. The listing broker will receive half of the fee and the brokerage representing the buyer the other half.

This gives the agent who worked with you a portion of the $7500. If the real estate agent has a 60/40 split with their broker, they will receive $4,500.

However, this isn’t all profit for the real estate agent. There are many expenses associated with running a business like office space, stationery and advertising. Real estate agents will only get paid when they sell a house. Because they can have multiple agents working for them, brokers have the potential of earning more than real agents. A broker can deal with clients as a real agent. This means that the broker could earn all of the 2.5% commission for their side of the transaction.

Brokers can also earn money outside of commission payments. They can charge agents that they have hired monthly fees for administration and other services.

What is a Flat Fee Real Estate Brokerage?

A flat fee real estate brokerage is different from a traditional broker. Flat fee brokerages will not charge you a commission. Flat fee real estate brokerages won’t charge a commission. Instead, they will only list your property in the multiple listing service.

There are many downsides to this type of real estate sales. This type of real estate brokerage does not offer home sellers the usual marketing and agent services.

A discount broker in real estate will usually charge less than the average commission for their area. You need to know what you’re getting for your money.

Find out. Although real estate brokerage fees are less expensive at discount brokers, that doesn’t mean you get more money.

Real estate broker salary

A real estate broker will receive a real estate commission. However, they can also earn a salary. A real estate broker’s salary can vary greatly. A lot of a real-estate broker’s annual salary will depend on the market share, the house price range, the average brokerage commission rate and the splits between the agents.

Many people ask how much real estate brokers make. A real estate agent can make a lot more than an agent if they are a franchisee.

Flat Fee Real Estate Brokerage

How do you become a real-estate broker?

A real estate broker is someone who works for a brokerage firm or as an agent. After completing real estate courses, and passing the education requirements, a prospective agent can become a real-estate broker. You don’t have to own a business to become a broker. It is possible that you just want to get your real estate broker’s licence now and then use it later.

What should you know about hiring a real estate broker

The broker will not be your agent. The broker will not be involved in the transaction. If you have a bad relationship with your broker and want to terminate them, you can talk to them.

Real estate broker near me

Family and friends may be able to provide references when you are looking for a broker to help you. You can also use Google to search for a real estate broker if they are unable to help.

Real estate brokers near me

will provide you with some options to consider.

Real estate brokerages close to me

should also be available.

Keep it in mind that you will need some research. Real estate agents will have different skills. It will be in your best interest to conduct thorough interviews with multiple agents.

Whether you need a listing agent or a buyer’s agent, it is worthwhile to do your due diligence. Those with years of experience in the real estate industry are often your best bet.

Examples of Real Estate Brokerages

Here are some examples of the most recognizable brokerages for real estate in the United States. These are the largest franchises.



Coldwell Banker

Keller Williams


eXp RealtyExit RealtyRealty ExecutivesERA RealtyBerkshire Hathaway Home Services

Weichert Realtors

Final Thoughts on What is a Real Estate Broker

You should now have a firm understanding of what a real estate broker is and what they do. It is a great responsibility to own your own real estate brokerage. A real estate broker supervises many other agents in their daily involvement in real estate sales.

  • About Bill Gassett: Bill Gassett is nationally recognized as a leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has been helping people move into and out of various Metrowest communities for over 36 years. I am passionate about real estate and love sharing my marketing expertise!
  • I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.
  • Summary
  • Article Name
  • Real Estate Broker: How Does a Brokerage Work?
  • Description
  • See what a real estate broker is and how they work. Learn about real estate brokerages and what they do in the industry.
  • Author
  • Bill Gassett
  • Publisher Name
  • Maximum Real Estate Exposure

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