There are plenty of professions to choose from today. However, many of them are merely nine-to-five jobs that offer nothing more than a mediocre but steady paycheck. Hence, a lot of people decide to find more lucrative and fulfilling opportunities. Some folks become doctors or lawyers to accommodate these wants, but others look in other directions. One such place is in the real estate industry. There are various positions though, and not everyone knows the distinctions that separate them. Therefore, you have come to the right place to learn the difference between real estate agent and broker.
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One main difference between real estate agent and broker is that the latter is considered a step above the other. Brokers usually have more education than salespeople, but that is not always the case. Before an agent can become a broker, they have to work for a brokerage firm for a specific amount of years. The length of time varies from one state to the next but is typically in the range of 1 to 3 years. The broker can go out into the field and do all of the tasks that agents do, but agents cannot act as brokers.
Another key difference between real estate agent and broker is how much the two positions get paid. A study by the Bureau of Labor Statistics shows that in May of 2017, agents brought home a respectable $45,990 per year. Meanwhile, for the same period, brokers made more at $56,730. Neither of these salaries is anything to shake a stick at as they both allow for comfortable living. However, due to the commission-based pay, the sky is the limit, so shoot for the stars. Some real estate professionals even amass $100K a year or more.
Are you still looking for another difference between real estate agent and broker? Like everything else, the educational requirements for the two positions differ from state to state. Virginia’s specifications will be used as an example to give readers an idea of the variations. The salespersons in this location must take 60-hours of pre-licensing courses. They have to pass an exam featuring state and national sections with at least a 70% as well. Brokers, on the other hand, are required to take 180-hours of classes. They must also have worked as a salesperson for 36 of the last 48 months. Like the agents, the broker exam also has national and state sections, and the candidate has to pass it to obtain their license.
The big thing that sets Realtors apart from others in the industry is the title “Realtor.” Not just anyone can call themselves the name. Real estate agents, managing brokers, associate brokers, and more can join the National Association of REALTORS®. They will be required to attend a certain number of meetings by their local chapter, and they have to abide by the Realtor Code of Ethics. The 17 articles were adopted in 1913 to hold Realtors to a higher standard. They are still regularly enforced by local boards today. When a person is looking to buy or sell a home, they often search for someone with the label. So, joining the NAR provides you with resources and opens a new clientele door.
Research by the Bureau of Labor Statistics lumps these two positions together when it comes to the job outlook. In 2016, there were approximately 444,100 openings. However, from 2016 to 2026, employment of sales agents and brokers is expected to grow 6%, which is as fast as average. This development is supposed to increase the number of jobs available by 24,900. So, if you are thinking about a career change and have an interest in real estate, now is as good of a time as any.
Because salespeople have to work under a broker’s license, a percentage of their sales goes to the firm. The amount depends on the arrangement that the two parties agree upon. Sometimes, it is a 70/30 split while on other occasions it is closer to 50/50. The agent may only get 2.5-percent of a sale, but the national standard runs closer to 5 and 6%. Therefore, one main difference between real estate agent and broker is that the latter gets a chunk of the sales person’s money. The brokerage is responsible for the agent’s actions, and they need to get paid too though.
While the difference between real estate agent and broker has been discussed, there is another title, associate-broker, that deserves to be talked about as well. On occasion, agents go down and pass their broker exam, but they do not wish to venture out on their own just yet. They stay put at their current brokerage firm or go to work for another broker. Associate-brokers generally keep acting as salespeople. They may have a few additional responsibilities, but they are not responsible for other agents in the office. However, should something happen, the individual is capable and trained to step in without blinking an eye. Additionally, due to the extra education and duties, they might get better perks such as a higher commission.
A dual agent is not a broker. Dual agency occurs when a salesperson represents both the seller and the buyer. This practice is not legal in every state. It can even transpire when two separate agents are involved, providing that they both work for the same brokerage firm because the broker creates the agency. Hopefully, this post has cleared up any misconceptions about the difference between real estate agent and broker. However, if you still have questions, check out the other articles on our blog to get the answers that you seek.
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