You probably aren’t the only person who is confused about the difference between a property agent and a real estate broker. Your confusion is understandable because there are both similarities and important differences.
Actually, to complete the sale or purchase of your home, you will need the services of both an estate agent and a broker – but not at the same time, and not for the same purposes.
Let’s start with a very simplified description of each estate representative:
• A property agent is a person who is licensed to sell property. The agent cannot work independently: he or she must work under the supervision of a property broker.
A property broker also is licensed to sell property but has taken additional education courses and passed a broker’s license exam. The broker can work entirely independently, or may hire agents to work with him or her in a brokerage, or may become a co-broker, working with other brokers in a joint business relationship.
Being an estate agent
Each state has specific requirements for becoming an estate agent. The requirements vary, but generally include completion of a minimum number of property classes and passing a real estate exam to become licensed.
Upon successful completion of the coursework and licensing exam, new agents must be sponsored by and work with an estate brokerage. Estate agents function as real estate salespersons under the supervision of the broker. broker sponsorship This will be a valuable learning period and one of the primary ways in which an estate agent begins to build a clientele.
The property broker already is a licensed agent with a number of years of real estate experience and who chooses obtain a broker’s license. The agent will be required to complete additional property-related coursework, pass the state-mandated broker’s exam and become licensed as a real estate broker. Property brokers are held to a higher standard of industry knowledge.
Property brokers are responsible for the actions of their salespersons (the real estate agents) and oversee all activities of the brokerage. He may serve as a mediator if there is a conflict between client and agent. She may step in to help with more complex negotiations.
The broker is the person to whom the sales commission is paid at the successful conclusion of a property transaction. The broker determines how to split the commission with the property agent who was directly involved in the transaction.
The broker also has the fiduciary responsibility for receiving the “earnest money” deposit from the home buyer, opening an escrow account and depositing that money in the account.
Do you need both an agent and a broker?
The short answer is yes. Sometimes, the agent and broker are one and the same person. Whether purchasing or selling a home, you will be working with a licensed estate agent. As the transaction reaches the point where money is transferred, the broker will be handling the escrow deposit process. And if any conflict arises or assistance is needed during negotiations, you and your agent will call upon the experience and skills of the broker.
Ultimately, both the estate agent and the estate broker are your allies and advocates throughout the sale or purchase of your home.
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Thank you for reading.