What’s the difference between a real estate agent and a broker?

home buyer-real estate agent relationship

The terms real estate agent and real estate broker are sometimes used interchangeably. But there is a difference.

Real estate sales agents are licensed to sell real estate in a certain state. They receive a real estate license after completing the required amount of classes and taking a proctored examination.

An agent works through a licensed broker, which can be an individual but is usually a company. The agent is responsible for getting new business (buyers or sellers) and helping their clients through a real estate transaction. However, you can’t be an agent without a broker.

Brokers are where the buck stops

A licensed broker, on the other hand, takes on a lot more responsibility than a real estate agent.

The brokerage firm is like the storefront and the agents are the salespeople. The broker is responsible for maintaining the business, the marketing, advertising and the infrastructure to support its real estate sales agents. Technically, the buyer or seller hires the broker, not the agent. The broker has ultimate responsibility and therefore carries a major errors and omissions insurance policy to protect against liabilities.

A real estate agent works through a broker, as opposed to working for the broker. In other words, an agent is not an employee, typically. Instead, the agent is a self-employed person who pays the broker a percentage of his or her commission, to repay marketing and other costs.

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