Sometimes the huge variety of provided services and respective intermediaries can confuse. Especially it is uncomfortable when it comes down to such a serious sphere as real estate deals. Signature Homes realizes how important to feel comfortable during such activities. Thus, you may find the main differences just below:
- The right to act independently belongs to the broker, but not to the agent;
- The right to hire agents belongs to the broker as well, while an agent acts only being hired;
- Real estate brokers’ expertise is confirmed with respective certificates and is deeper than agents’;
- The right to act either as a broker or an agent belongs to brokers, while the agent cannot.
The main reasons for confusion are lots of certifications and qualifications, which brokers use to show their expertise. At the same time to be competitive agents used to name themselves consultants, associates, salespersons or sales representatives, or just realtors. Anyway, the key point is that they’re all legally permitted to do their work with a specific license or certificate.
In order to understand the question deeper let’s try to learn what are main duties, responsibilities, and ways to distinguish between a broker and an agent?
Tip: visit state authorities’ site, where the list of authorized brokers and agents is provided to check who you’re dealing with and whether he/she is authorized for such activities.
Broker’s Function in Real Estate
A real estate broker considered to be the career’s next stage for the agent. Brokers usually have certificates, proven education records, and specific training records in contradistinction to the agents. Although general rules may vary depending on the state’s laws, the general rules are common and allow the broker to hire one or several people in sales department (so-called salespersons) or to be independent in their activities.
Some states require a broker a special certificate/license to perform work legally or to start own business hiring agents for such purposes. For example, the California laws give the following opportunities to get the broker’s license:
- To pass the professional broker’s exam for those, who have a college degree (4 years and more) and additionally completed courses in the field of the real estate;
- Complete eight exams from college program without having a professional degree, evidence 2 years of experience in real estate sells, and pass a specific professional exam;
- Lawyers are exempted from college-level exams, although they’re still required to pass the specific exam.
As brokers required to hold higher working standards than agents their exams are longer and more difficult than those which as passed by agents or salespersons.
Sometimes it happens that brokers can work for other brokers or real estate firms, because joining large entities or corporations may bring more benefits and privileges. In this way, the payment system can be linked to sales being a percentage from sales or can be fixed as a salary. Brokers who are hired by other brokers are called broker associates.
Real Estate Agent Role
Agent’s function is mostly selling, although his activity should be also supported with a license for acting in a real estate sphere. In contradistinction to brokers, they cannot perform the work independently. Instead of it, they’re usually hired by brokers, who’re responsible for hired agents’ professional activities. The major requirements for receiving a real estate license for salespersons can be different in different states as well, although the major comes down to being 18 years old (or older) and having some college-specific courses in the real estate field.
Being a realtor is a different thing from being an agent/a broker. Actually, real estate agents and brokers can be realtors, because being a realtor means having the membership of the National Association of Realtors or as it also called NAR. Such membership requires regular subscription fees and compliance with a code of ethics and conduct.
NAR’s members are also members of trade associations (either state or local). Any complaints about their activities are filed on board at the local level.
Listing Agent Role
The listing agent is a real estate agent who is dealing on behalf of the seller, so they’re also usually called sellers agents. A real estate agent, as well as a real estate broker, can perform a function of the listing agent. The listing agent owes fiduciary responsibility according to the listing agreement, so it must protect sellers’ interests.
Buyers Agent Role
It’s simple to understand what deals with buyers agents and whose interest he/she represents. They are also called selling agents and can exclusively work with a buyer, meaning that they are restricted for work with sellers. Depending on the state’s law buyers agent may be required or not required to conclude an agreement with clients.
For those, who work at the same time for both sellers and buyers there’s a separate term.
Dual Agent Role
It is also simple to guess that an agent working for both sides of the deal (selling and buying) is called a dual agent. In cases when two different agents are working separately one for a buyer and another one for a seller and both these agents are hired by the one broker, the dual agency may appear. It is important to know that such kinds of the deal are forbidden by law in each state.
Transaction Agent Role
Considering the illegality of dual agency sometimes listing agents can write an offer to buyers becoming a transaction agent. In such a case they don’t represent the interest of any part, although they support the deal documentation.