The real estate industry has its own jargon that is often misunderstood to those outside of the industry. The terms that are most often confused and used incorrectly are “agent” and “broker.”
While these terms are often used interchangeably, there are a few key differences between the positions.
Real estate broker vs agent
An agent is a professional licensed to sell property in their state. A broker is someone who is licensed to own their own real estate firm. A real estate agent cannot work on their own, they must work under a licensed broker.
These roles have a lot of overlap and work together, but there are key differences in the daily tasks of each position.
The definition of these terms can vary from state to state. Some states have stricter rules and regulations when defining those terms, like Colorado.
What is a real estate agent?
This is what most people think of when discussing the real estate profession. Agents meet with clients, arrange open houses, and sell homes.
To become an agent, you must obtain a license and attend special classes. To legally sell property, an agent must work under a licensed broker. Agents cannot operate independently.
Agents are paid by commission earned from a portion of a property’s selling price. Commission amounts depend on the brokerage the agent works for.
What is a real estate broker?
A broker is a real estate agent with additional qualifications and licensing. Once obtaining the licensing requirements, a broker can sell property independently. Brokers can also open their own brokerage firm and manage other agents.
Compared to agents, brokers have much more freedom in their careers as they are in charge of their own firms. Brokers also obtain experience with management and leadership, valuable skills that can be taken even further or into another career path. Many brokers become property managers or investors.
Brokers typically have three or more years experience as an agent before pursuing the additional education for a broker license.
Both career paths as an agent and a broker allow experience in the real estate field. However, brokers have the advantage in career advancement and additional opportunities.