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In the world of real estate, the roles of realtors and brokers often get confused. Both professionals play key parts in helping clients buy, sell, or rent properties. However, the distinction between them is crucial for anyone navigating the real estate market. This article explores the core differences, explaining the roles and responsibilities that separate a realtor from a broker, and how these differences can affect real estate commissions, salaries, and career paths.

What is a Realtor?

A realtor is a licensed real estate professional who is a member of the National Association of Realtors (NAR). The title “realtor” is a trademarked term that refers specifically to members of NAR, who are committed to following a strict code of ethics and best practices. Realtors are usually either real estate agents or brokers who have chosen to join this national organization.

The primary duty of a realtor is to help clients buy, sell, or rent property. They work closely with both sellers and buyers, providing guidance throughout the transaction process. However, being a realtor does not automatically make someone a broker, as brokers hold a different set of qualifications and responsibilities.

What is a Broker?

A real estate broker is a step above a real estate agent in terms of qualifications and experience. Brokers typically need to complete additional education and pass a higher-level licensing exam. Unlike real estate agents, brokers can work independently and manage their own real estate firm or team of agents.

Brokers can take on a variety of roles, including:

Managing other real estate agents
Owning their own brokerage
Facilitating more complex transactions
Offering direct services to clients just like an agent

Because of the higher level of responsibility and expertise required, brokers generally earn a higher income compared to real estate agents.

What is the Main Difference Between Agents and Brokers?

The primary difference between a real estate agent and a broker is in their level of responsibility, education, and authority.

Real estate agents must work under the supervision of a licensed broker. They handle client relationships, market properties, and facilitate transactions but cannot operate independently.
Brokers, on the other hand, have the freedom to operate independently and supervise other agents. They hold a higher level of authority, can run their own brokerage, and handle the legal and financial aspects of real estate transactions.

This distinction also impacts the commission structure in real estate transactions. Agents typically share a percentage of their commission with their supervising broker, while brokers can retain a larger share, especially if they own their brokerage.

Broker vs Realtor Commission

Real estate commissions are typically based on a percentage of the sale price of the property. Both realtors and brokers earn commissions, but the way these commissions are split varies.

For realtors, the commission is usually divided between the buyer’s agent and the seller’s agent, with each agent splitting a portion of their earnings with their respective broker.

In contrast, brokers—especially those running their own brokerage—can retain a larger share of the commission. If a broker also works as an agent, they keep the entire commission, whereas agents must split it with their broker.

Real Estate Broker vs Agent Salary

The salary differences between a real estate broker and an agent are primarily influenced by the commission split and the level of independence each has.

Real estate agents typically earn less than brokers because they must split their commission with the broker they work under.
Brokers, particularly those who own their brokerage, have the potential to earn significantly more. This is due to their ability to keep a larger percentage of the commission and, if they manage a team of agents, earn a portion of their agents’ commissions.

On average, brokers tend to have higher annual incomes than agents, making the path to becoming a broker more lucrative in the long term.

How to Become a Real Estate Broker

The path to becoming a real estate broker typically starts with gaining experience as a licensed real estate agent. Here are the general steps:

Get Licensed as a Real Estate Agent: Start by passing the real estate licensing exam in your state.
Gain Experience: Most states require agents to work under a broker for a certain number of years before they can apply for a broker’s license.
Complete Additional Education: Brokers must complete additional coursework and pass a more comprehensive exam compared to agents.
Apply for a Broker’s License: Once you meet the educational and experience requirements, you can apply for a broker’s license.
Start Your Own Brokerage (Optional): After obtaining a license, you can either continue working under a broker or start your own brokerage.

How Long Does a Real Estate Agent Have to Work Under a Broker?

The length of time a real estate agent must work under a broker varies by state but is typically between two and five years. This experience is essential for agents looking to become brokers, as it provides them with the necessary skills and understanding to handle more complex transactions and responsibilities.

Broker Associate vs Realtor

A broker associate is a licensed real estate broker who works under another broker. Although they have passed the required exams to become a broker, they choose to work in an associate role rather than running their own brokerage.

On the other hand, a realtor can be either a real estate agent or a broker who is a member of the National Association of Realtors (NAR). Being a realtor does not necessarily mean they are a broker.

What is the Meaning of Broker Agent?

The term broker agent generally refers to a real estate professional who holds both a broker’s license but works in a capacity similar to that of a real estate agent. Instead of operating independently, a broker agent chooses to work under another broker, effectively blending the roles.

What is the Difference Between a Broker and a Brokerage?

A broker is an individual who has met the qualifications to facilitate real estate transactions, while a brokerage refers to the business or firm that a broker may own or operate. A brokerage is the overarching entity, and brokers or agents may work for that brokerage.

Conclusion:

Understanding the distinctions between a realtor and a broker is essential for anyone navigating the real estate market. While both play critical roles, brokers hold more responsibilities, higher qualifications, and can operate independently. Their potential for higher earnings and leadership positions makes the path to becoming a broker an appealing career move. Whether you’re considering working with a realtor or broker or looking to advance your real estate career, knowing the differences can help you make informed decisions.