What is the Difference Between a Real Estate Agent and a Broker?

Are you perplexed by the various job titles assigned to real estate professionals? People frequently refer to agents as brokers or realtors, but they are not the same thing. This blog discusses the distinction between a real estate agent and a realtor in a recent piece. This blog will explain how agents differ from brokers.  

What is the distinction between a real estate broker and a real estate agent?

Real estate agents are required to work under the supervision of a supervising real estate broker. Brokers can choose to work with another broker or on their own. They can even start their own real estate companies with agents reporting to them.

Agent vs. Broker Qualifications and Training

Real estate agents and brokers both start with the same basic training. In California, for example, the Department of Real Estate (DRE) issues real estate licenses to individuals who meet the following requirements.  

License Requirements for Real Estate Agents (Salesperson)

• Age 18+  
• California residency  
• Completion of an approved pre-license course with a grade of 60% or higher  
• A grade of 70% or higher on the state real estate salesperson examination  

Real estate agents must join a brokerage and transactions must be supervised by a licensed real estate broker. Agents must complete continuing education credits and renew their licenses every four years.  

License Requirements for Real Estate Brokers

To obtain a broker’s license, in addition to completing all the above requirements, agents must also meet the following criteria:  

• Complete mandatory, DRE-approved broker license training  
• Complete two years' experience as a full-time, licensed real estate agent  
• Pass the state broker license exam  

Broker Responsibilities

The answer to this question depends on what type of career a broker wants to pursue.  Independent brokers can still work in a brokerage managed by another owner-broker. In that case, the responsibilities won’t differ very much from those of a salesperson.  

On the other hand, many real estate agents decide to become brokers because they are ready to open a brokerage themselves. In that capacity, a broker will take on more responsibility. Owning or managing an office comes with duties like:  

• Recruiting, training, and mentoring agents and staff  
• Negotiating contracts and compensation structures  
• Managing trust accounts, income, and expenses  
• Marketing and advertising  
• Legal and compliance obligations  
• Handline office politics and disputes  

Some people thrive in management roles while others have less tolerance so real estate professionals should consider the challenges carefully before diving into ownership.  

Broker Benefits

While becoming a broker can come with increased knowledge and added responsibilities, there can also be many benefits. A seasoned professional might be able to negotiate a better commission split under someone else or keep all the commission when working on their own.  

As owners, many brokers benefit from taking their businesses in whatever direction appeals to them. They can choose specific niches, focus on particular neighborhoods, give back to their community, and establish an office culture that fits their desires. Effective owners who hire productive management, staff, and agents may be able to delegate more and work less.  

For those keen to be in positions of leadership, owning a brokerage can mean increased status and much higher earning potential. With agents under them, brokers can earn desk fees and a portion of the commission from every transaction completed by one of their recruits.  

Do Agents Always Get Their Broker’s Licenses?

A real estate agent is not the same thing as a real estate broker. For one thing a real estate broker makes more money. According to the United States Bureau of Labor and Statistics (BLS), in 2019, the average annual income for a real estate broker was $163,540. The average real estate agent income was $61,720. Becoming a broker may provide a competitive advantage as brokers may be seen as having more experience, training, and expertise, but many successful real estate agents never become brokers.  

Even without the broker title, agents can access advanced training from a variety of sources and may have decades of experience, so the choice is yours.  

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