Whether you’re buying or selling a home, you’re going to need some help. So the question becomes… Who should you hire? Unless you’re in the industry, It can be quite confusing to figure out the different types of real estate professionals and what the difference is. Real estate professionals go by a few different names such as real estate agent, real estate broker, and of course, Realtor. So what exactly is the difference between the three?
Many times these different titles are used interchangeably because most people don’t know the difference between them. However, there are some important differences between them as well as special requirements for using certain titles.
Following is a list of the most common real estate professional titles you will come across and what exactly they mean.
The Real Estate Agent
The real estate agent is a licensed professional who helps people to buy, sell and rent different types of real estate such as residential and commercial.
For them to get the license, the state requires the individual to complete pre-licensing training. Depending on the jurisdiction, the number of training hours required can vary quite a bit. In the state of Florida, for example, real estate agents have to take 63 hours of pre-licensing training and in California, applicants must complete 135 hours of pre-licensing training before they can test for their license.
Once the training has been completed, applicants must then take a state-issued written exam. In Florida for example, the real estate sale associate exam is a 100-question multiple-choice test. 45 of the questions are on real estate principles and practices, and another 45 questions cover Florida and Federal laws, the additional 10 questions require math calculations.
Once they’ve passed this exam, they can now call themselves a “real estate agent” and will most likely join a real estate brokerage where they can begin working with home buyers and sellers. New agents will also benefit tremendously from being around experienced agents.
The Real Estate Broker
A real estate broker is someone who has been a real estate agent for at least 2 years and has taken additional educational courses beyond the agent level as required by the state.
Pretty similar to a real estate agent’s exam, each state has its broker exam requirements and continued education. The additional requirements cover topics such as contracts, insurance, ethics, and taxes in a more in-depth level of understanding than what was taught to them as a new agent.
Brokers are also required to be knowledgeable about legal issues and how the law pertains to operating a brokerage, investing in real estate, new construction, and even property management. It’s because of this that brokers should have a more in-depth knowledge of the real estate business in their state.
To take the state broker’s exam and get a license, real estate agents must have at least 2 years of experience as a licensed agent under a licensed broker in the state of Florida.
Typically, there are 3 different types of real estate brokers and each one has a different role to play.
There are three types of real estate brokers, each with subtle differences in the role they perform:
The Principal Broker: is the person in an office that oversees all the other agents in that particular office. This person is also in charge of making sure that agents are complying and operating within state and national real estate law. The Principal broker mainly gets paid a cut of every commission of every agent in that office. Some brokers also receive an annual salary in addition to their commission.
The Broker Associate: This real estate professional aka affiliate broker possesses a broker’s license but is working under a managing broker. This agent is usually not responsible for overseeing other agents.
The Realtor: For a real estate agent to become a Realtor they need to become a member of the National Association of Realtors®. When you become a member, you are agreeing to uphold the standards of the Realtor Association as well as its code of ethics.
The NAR holds agents to a higher standard beyond what the state requires. Realtors also have access to valuable real estate market data as well as transaction management services and several other tools which can be extremely helpful in the real estate business.
The Listing Agent
The listing agent in a real estate transaction represents the seller and they are the ones that list the property. If you’re looking to sell your house, then you’d be wise to hire a listing agent, as they specialize in selling homes. They help in countless ways including pricing the home, home improvement advice, marketing, open houses, negotiating, scheduling showings, and closing.
Just like any other type of agent, listing agents don’t receive any money unless the home gets sold. When and if it sells, the typical real estate sales commission in Florida is between 5 and 6% [to be split between the listing agent and buyer’s agent]. Although, as I learned in my very first real estate class… “everything in real estate is negotiable”.
The Buyer’s Agent
Like it says in the title, buyer’s agents represent people who are buying a home. Like the listing agent, a buyer’s agent has a whole list of tasks to complete to ensure a successful home buying experience for their clients. Buyer’s agents can help with things like finding the right house, negotiations, recommending mortgage brokers or financial institutions.
Just like the listing agent, the buyer’s agent is dependent on the deal going through to get paid from the sale of the property. This is good news for the home buyer because it doesn’t cost them anything to hire a buyer’s agent.
Finding The Right Real Estate Professional For You
Most people start their search on Google, which is a good starting place. However, it’s also good practice to find an agent which specializes in the area where you are buying… or selling. Once you have a few potential candidates selected, meet with them in person, ask questions and check their online reviews. By doing this you’ll know if they’re a good fit for you moving forward.
