Buying and selling property can be a complex and time-consuming process. Many buyers and sellers enlist the help of a real estate professional to assist in their sale or purchase, but this can also prove to be a daunting task if you don’t know what you’re looking for. When choosing a real estate agent or broker, you need to start by knowing the difference between the two.
The terminology that identifies real estate professionals varies a bit from state to state. In general, there are two levels of real estate professionals licensed by individual states: salesperson and broker. In most cases, the term real estate agent’ refers to a licensed salesperson employed by a real estate broker. When a person obtains a real estate salesperson’s license, s/he becomes a real estate agent.
To obtain a real estate license, a person must complete a minimum number of classes in order to be eligible to pass the state exam in the state where s/he will practice. Real estate education usually consists of 40-90 hours of training, sometimes provided by a brokerage as a means of recruiting new agents. In order to work, a real estate salesperson must be employed by a broker.
After obtaining a state issued license, an agent is qualified to handle real estate sales. Their services will depend on whether you wish to buy or to sell. If you are selling property, your agent can help you decide how much to list your property for, suggest a strategy for marketing, and assist with many other details until the deal is closed.
An agent can also represent you as a buyer. In that case, your agent will assess your financial situation and your needs and desires in order to show you properties that suit your individual situation. When you choose a property the agent will write up your buying offer and submit it to the seller as well as handling other transaction details.
If, after several years of experience, a real estate agent wishes to become licensed as a broker, s/he is required to pass additional courses and testing. Once an agent reaches the broker level s/he is able to own and operate his/her own real estate firm, employ and manage other real estate professionals, and do appraisals. A broker is also financially and legally responsible for the agents working under his/her supervision, maintains professional liability insurance for all the agents in the firm, can hold an earnest payment from the buyer in escrow until the closing, and provides other services as described in his/her state’s licensing law.
In short, a broker has more rights and responsibilities to the public and the firm’s clients, but when buying or selling real estate the person you will normally deal with will be an agent acting under the authority of a broker.