What is a Real Estate Broker?
A real estate broker is a licensed professional who represents buyers and sellers of property in exchange for a commission and can manage real estate agents.
Real estate brokers are professionals who represent people buying or selling property. They are involved in both commercial and residential transactions. People often hire brokers to help them find appropriate properties or buyers, advise on pricing, negotiate terms, and more. Once a property sells, the broker receives a commission, often a percentage of the selling price (for residential homes, the seller usually pays both agents). Compared to real estate agents, brokers have to complete more education and pass a broker licensing exam overseen by the state government. Agents must work for a broker, while brokers can work independently or manage a team of agents.
Jerry wants to sell his house, but he’s not sure what his home is worth or how to attract a buyer. He decides to hire a real estate broker. The broker advises Jerry on how to prepare the home for sale and the listing price to choose, then helps market the home and host open houses. After an appointment with an eager buyer, the broker successfully negotiates a $200,000 price and finalizes the paperwork. Jerry sells his home for $200,000 and pays a 6% commission ($12,000), which is split between his broker and the buyer’s agent.
Real estate brokers are like matchmakers for people buying or selling homes…
Brokers house-hunt for prospective homeowners and find potential buyers for people selling their homes. Once they find a match, they represent you in the exchange and negotiate a favorable price. If they successfully complete the transaction, brokers charge a commission for their services.
A real estate broker is a professional who is licensed to represent buyers and sellers of real estate. This includes responsibilities such as:
Unlike real estate agents, brokers have to pass a broker’s licensing exam. This allows them to work alone or hire agents, while agents must work for brokers. Generally speaking, brokers have more education and experience than agents. After completing a real estate transaction, brokers receive a commission (a fee that is a percentage of the sale price) for their work.
In short, everyone licensed to help people buy and sell real estate is an agent. Some of those agents get another license and become brokers. And some of those agents and brokers choose to become members of the NAR, which gives them the title of realtor. However, some states use the terms “agent” and “broker” a bit differently, so you may want to look up the specifics in your area.
The responsibilities of agents and brokers differ depending on who they represent in the exchange. You can classify brokers and agents into three categories based on the role they play in a sale:
A seller’s agent has duties that may include:
A buyer’s agent takes care of tasks such as:
Brokers can perform the same tasks as agents but have the option to work independently or run a real estate brokerage. If a broker chooses to manage agents, he or she may have duties like:
Brokers receive part of the commissions their agents make.
Agents and brokers usually make money from commissions on a completed real estate transaction, typically a percentage of the selling price. Clients discuss the details of these commissions before signing a contract to hire an agent or broker.
Usually, the seller pays the commission for all the agents and brokers involved, but sometimes the buyer agrees to share in that responsibility. Here’s how the money usually moves:
It’s common for sellers to factor in the commission when pricing their homes. In this sense, the buyer is automatically helping pay an agent’s commission when he or she buys the house.
Each state has its own standards for dispensing licenses to real estate brokers and agents. You’ll have to research your state’s requirements to know the specifics.
Requirements to become a real estate agent vary by state. For example, in California, you must:
Once you have your license, you can buy and sell real estate but must work for a broker. This is where most real estate professionals start their careers.
To become a broker, you must acquire a higher license. The pre-licensing requirements vary from state to state. Sometimes you have to complete extra education and have experience selling and buying real estate for some time. For example, in Georgia, you must be at least 21 years old, have an active real estate agent license for at least three years, and complete a course before taking the broker exam. Once you qualify, you can take the licensing exam, pass it, and become a broker.
To become a realtor, you must become a member of the National Association of Realtors (NAR). You do this by meeting the qualifications and joining a local realtor association. To qualify, you must:
You can sell or buy a home on your own, but there are good reasons to use an agent:
Buying a property will likely be one of the most expensive purchases you make in your life. The advice of an expert can help ensure you’re making the best sale or purchase possible.
Real estate transactions can be complicated and time-consuming. Brokers have the experience and know-how to send you properties that fit your needs and complete the sale quickly and smoothly.
A broker may not be necessary in some cases, such as buying a house from a trusted relative. You’ll need to use your judgment when deciding whether a real estate broker is right for your situation.
If you choose to hire a professional, you can choose an agent or a broker. Agents work for brokers, and brokers usually don’t deal immediately with clients.
The advantage of using brokers is that they’re more experienced than agents. They may be able to handle more complicated transactions, like short sales. The downside is that brokers may charge more and may be too busy to give you as much personal attention as agents would.
What are Demographics?
Demographics are statistical data about a population — such as age, gender, and race — as well as the study of this data.
What is a Bank Account Number
An account number is a string of digits, often associated with a bank or brokerage account, that allows individuals and companies to identify you.
What is a Chief Executive Officer (CEO)?
A chief executive officer (CEO) is the top executive and decision-maker in a company, usually selected by a board of directors in a large company and considered the public face of the organization.
What is Inventory Turnover?
Inventory turnover is a ratio that shows the number of times that a company can sell through its inventory in a given period of time.
What is the Business Cycle?
The business cycle is the natural tendency for an economy to go through repeated periods of growth and contraction.