What Is A Real Estate Broker, And What Do They Do?

Whether you are buying or selling a home, there is a lot of lingo in the real estate world that can be confusing. Realtors, agents, brokers — what’s the difference? Here, we define exactly what a real estate broker is and what differentiates it from other, similar-sounding titles.

What is a real estate broker?

Real estate brokers are licensed professionals who, like real estate agents, assist in buying and selling a home. But a broker has additional licensing and training, above and beyond what it takes to become an agent. In other words, a broker can do everything an agent can do, and then some.

Real estate brokers can work independently, while agents typically must work under a broker or a brokerage firm. An agent works with a broker to finalize a property transaction, but it’s the broker who does the work of making sure it complies with all applicable laws. This includes making sure paperwork is filed correctly, money is transferred and records are completed and reported to the proper authorities. Brokerages often earn a share of their agents’ commission fees.

Broker qualifications

To become a licensed real estate broker, you must first become a licensed real estate agent. Often, an agent will get experience in the field for several years before pursuing the certification required to become a broker. Many states have a two-year requirement before applying for broker status is even permitted.

Earning a broker’s license requires going through a training process that has been established by the state of license. The coursework usually takes several weeks to complete and addresses matters of real estate law, contract law, finance, agency operations and other related topics.

After completing the course, you can apply to take the broker licensing exam. If you pass the exam, you qualify for a license and can become a practicing real estate broker.

Broker vs. agent vs. Realtor

Depending on their training and affiliations, a single real estate professional can actually be all three of these titles. Here are the distinctions:

What does a real estate broker do?

Real estate brokers typically perform many of the same duties as a real estate agent, including working with buyers to find properties, preparing and submitting offers and managing the closing process. However, real estate brokers are also qualified to be involved in the legal and financial minutia of a housing transaction. A broker can, for example, move money in and out of an escrow account and mediate contract-related disputes. (However, being a broker is not the same as being an attorney.)

Leslie Singer, a licensed broker with Brown Harris Stevens in New York City, explains that an agent has “skills to educate you about the market, guide you to a home that fits what you’re looking for, coordinate other professionals who will be needed and negotiate for your best interests,” whereas a broker can do all that and also “help you navigate titles, zoning or legal matters, which can seem like another language.”

Types of real estate brokers

There are three main types of real estate brokers:

• Principal: A principal broker serves as oversight for a brokerage’s agents and other brokers, supervising them as they work through the sale or purchase of a property and making sure that they are in compliance with all applicable laws throughout the process. Brokerages typically have a designated broker who performs this role, signing off on every transaction the company performs.
• Managing: A managing broker is involved in overseeing the daily operations of a brokerage. They are able to hire agents and train staff, as well as operate independently as a broker or agent.
• Associate: An associate broker has a broker’s license but chooses not to work independently. Instead, they work under another broker or brokerage. Typically, an associate broker does not oversee other agents.

Benefits of working with a real estate broker

Whether you’re buying or selling a home, the advantages of working with a broker include:

• Saving time: A real estate broker is like a one-stop shop, as they can serve as an agent as well as help with the finer points. A real estate agent will eventually work with a broker to finalize the transaction, so working with a broker directly can simplify the process.
• Providing extra manpower: A broker can also hire additional agents to work under them on a transaction, if necessary — helpful on very large deals or in very busy markets where many clients are competing for attention.
• Helping with delicate or unique situations: Hammering out the details of a real estate transaction can be tricky, especially if there are unusual circumstances. Brokers have additional knowledge and training that can help guide the process to ensure everything works out favorably.

FAQs

• How does a real estate broker get paid?
  

  Just like real estate agents, brokers typically work on a commission basis — meaning they earn a percentage of the home’s final sale price. Hiring a broker won’t necessarily cost you more money than you would pay with a standard agent. When a broker has an agent working under them, that broker typically gets a portion of the agent’s commission. When a broker works independently on a transaction, they do not have to split the commission with the brokerage or anyone else. Consumers must discuss commission rates with both agents and brokers before signing a contract to work with them.

• Is a real estate broker the same as a mortgage broker?
  

  No: While both are involved in real estate transactions, real estate brokers and mortgage brokers are not the same thing. Real estate brokers facilitate the deal between buyer and seller, whereas mortgage brokers deal exclusively with financing, working with the borrower and the lender. “A mortgage broker is essentially a middleman between the borrower or homeowner and the bank or mortgage lender,” says Singer. “Licensed mortgage brokers work directly with both the consumer and the bank to help consumers qualify for a mortgage, whether it’s purchased or a refinance.”