Broker Vs. Realtor ~ Ever Wonder the Difference?
Broker vs. Realtor
A real estate broker is someone who has taken education beyond the agent level as required by state laws and passed a broker’s license exam.
Similar to real estate agent exams, each state sets its own broker education and exam requirements. The extra coursework covers topics such as ethics, contracts, taxes, and insurance—at a more in-depth level than what’s taught in a real estate agent prelicensing course.
Prospective brokers also learn about real estate legal issues and how the law applies to operating a brokerage, real estate investments, construction, and property management.
As a result, “brokers have in-depth knowledge of the real estate business,” says Jennifer Baxter, associate broker at Re/Max Regency in Suwanee, GA.
To sit for the broker’s exam and obtain licensure, real estate agents must already have a certain level of experience under their belt—typically, three years as a licensed real estate agent.
There are three types of real estate brokers, each with subtle differences in the role they perform:
- Principal/designated broker: Each real estate office has a principal/designated broker. This person oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. Like real estate agents, principal brokers get paid on commission—taking a cut of the commissions of the sales agents they supervise (although many principal brokers receive an annual base salary).
- Managing broker: This person oversees the day-to-day operation and transactions of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff. (Some principal/designated brokers also serve as managing brokers.)
- Associate broker: This real estate professional—sometimes called a broker associate, broker-salesperson, or affiliate broker—has a broker’s license but is working under a managing broker. This person typically is not responsible for supervising other agents.
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