Real Estate Agent vs. Real Estate Broker: What’s the Difference When You’re A Buyer?
Both real estate agents and brokers are licensed to assist you with your real purchase. Real estate brokers have additional certification which requires more experience, additional training and further state testing. However, in some states, the word “broker” and “agent” are used interchangeably.
Real Estate Broker Duties
Real estate brokers are licensed to do everything a real estate agent does, including negotiating and writing property transactions.
Additionally– Because brokers have a higher level of licensing, real estate brokers are also licensed to supervise agents and oversee all real estate transactions for a brokerage. This includes assisting agents if an issue occurs during any part of the sales transaction.
When purchasing a home, you’re more likely to work with an agent. Most brokers spend their days overseeing the real estate brokerage and supervising individual agents.
Brokers use various names, depending on the size of their brokerage and their role and responsibilities:
Principal Broker – Owner of a real estate brokerage.
Managing Broker – The broker that manages a real estate brokerage.
Broker Associate – A real estate broker that works under another broker and has no ownership or management responsibilities for the brokerage.
A Real Estate Brokerage Defined
A real estate brokerage is a stat licensed firm where a broker, teams, agents and assistants work. The chain of command at a real estate brokerage is broker, then team leader (if there are teams of agents), then agents, and then assistants.
At a small boutique real estate firm, such as ASH MCGINTY, the broker (me) might be the owner of the company and may also take clients. (This describes my current role at ASH MCGINTY.)
At a larger real estate firm, the broker is the person who oversees the office. (This was the model at my previous real estate brokerage in which I managed 600+ agents. I was both the Principal Broker and the Managing Broker. )
Types of Real Estate Agents
There are several types of real estate agents, based on the roles they take on for their clients. Most real estate agents offer more than one type of real estate service:
Listing Agent: represents the seller
Buyer’s Agent: represents the buyer
Dual Agent: represents both the seller and the buyer in a transaction, called dual agency
Transaction Agent: When dual agency is not legal, a transaction agent oversees the transaction timelines and paperwork for both parties, but they don’t give advice or represent either side.
Real Estate Agent Duties
When working with buyers, real estate agents oversee the sales process, from the initial home search all the way to your closing. Some real estate agents go above and beyond the following list, but these are the key responsibilities of most professional buyer’s agent:
Help you to figure out your purchasing power: A good agent will guide you through the financing pre-approval process, suggest lenders and help you determine the right budget.
Choose the ideal neighborhood and school districts: Your agent can help you explore neighborhoods based on your budget, lifestyle and commute.
Find available property listings based on your wants and needs: An agent will send you an initial set of listings to review, then new listings regularly so you can determine if a property is worth seeing in person. Agents sometimes have access to off-market or pre-market listings that you wouldn’t be able to find on the local MLS.
According to Zillow:
82% of buyers use an agent at some point during their home search. And when buyers are determining the right home to buy, 53% say their agent’s evaluation of the home is very or extremely important to them.
(If you’re ready to start exploring listings now, consider reviewing properties currently available for sale in Washington, DC.)
Submit offers: Once you’ve found a house you love, your agent will help you determine an offer price, suggest the terms of your offer and submit the offer to the listing agent or owner.
Negotiate on your behalf: Your agent will negotiate with the other party on the final sales price and contract terms, including the earnest money deposit. Your agent will continue to negotiate on your behalf as you move toward closing, especially on things like inspection and financing contingencies and closing credits.
Make professional recommendations: Agents are also a great resource for referrals of home inspectors, home warranty companies, title companies, real estate closing attorneys, etc.
Complete paperwork: There’s a lot of paperwork involved in buying a home. Your agent will draft the real estate contract and disclosures and work with your title company or real estate closing attorney to review all documents. They’ll also help with any other Federal and State required paperwork.
Facilitate inspections and repairs: Most agents will attend the home inspection with you (and help schedule additional inspections as needed, coordinate times with all parties and make sure contract deadlines are met.
Navigate you sale through closing: Your buyer’s agent should attend your closing to make sure there are no issues and handle any problems that arise.
How Do Real Estate Agents Get Paid?
While the role of a buyer’s agent is to help a buyer find a home, they’re actually paid by the seller. Sellers typically pay 5-6% of the sale price in agent commission, with the total amount being split roughly 50-50 between the seller’s agent and the buyer’s agent (50% of commission to each agent).