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Cindy, Home Buyer in Cuyahoga Falls, OH

what is the difference between a broker and a realtor? does the broker own that real estate office?

Asked by Cindy, Cuyahoga Falls, OH Thu Jan 22, 2009

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The term “Realtor” does not apply to licensing. The term “Broker” and “Salesperson” refer to the type of license a person is issued by the state in which they practice real estate.

“Realtors” are members of a trade association, The National Association of Realtors (NAR). This is the largest trade association in the United States with over 1.2 million members.

State regulatory bodies establish the requirements for obtaining and maintaining various types of real estate licenses. Upon entering the profession, most states issue a form of a “Salesperson” license to those who complete the education and application process. “Salespersons” must be supervised by “Brokers” and they work for a “Brokerage Firm”. States issues a license to an individual as “Broker” predicated upon a higher level of experience and education.

One who obtains a “Broker” license has fulfilled the state’s requirements to manage a real estate office, or own a real estate brokerage firm. Not all individuals who hold a license as a “Broker” choose to work as managers or owners. One can hold a Broker license and work under another Managing Broker. The term “Broker” may refer to the company for which a licensee works, or the term “Broker” may refer to the manager or owner the firm for which a licensee is affiliated.

I am a Broker (licensed by the regulatory bodies of the states of Florida and New Jersey). I own Peninsula Realty Group, Inc., and therefore, I am a Broker-Owner. The company, Peninsula Realty Group, Inc. is issued a Broker License. I am a Realtor (member of the trade association National Association of Realtors.) I have licensed Sales Associates who work under me. Some of them are Realtors (members of NAR), and others are not.

http://www.com.state.oh.us/real/remain.htm
http://www.realtor.org/

Deborah Madey - Broker
Peninsula Realty Group (Brokerage Firm)
1 vote Thank Flag Link Thu Jan 22, 2009
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
A Broker is licensed by Ohio to directly sell real estate; a "salesman", which most agents are, has to be employed by a broker and cannot work directly for himself/herself. All licensees are called "agents". Realtors are agents who are members of the National Association of Realtors, a trade union who fosters co-operation between agents and has ethical standards for continued membership. Not all agents are Realtors; most residential ones are, and a few commercial ones are. Brokers have full responsibility for the conduct of their agents (salesmen) they employ, and brokers have completed a certain number of transactions and have additional required education in order to obtain their broker licenses. Brokers may, or may not, own their own brokerages and may or may not employ other agents. In my case, I have no agents and operate a brokerage by myself; previous to starting my own business I held a broker's license but was employed by a broker who owned the brokerage I worked for (which is now a Re/Max franchisee). All persons entering real esate start off as agents having a salesman's license; they may further their education and do enough transactions to apply for the broker's license after being in the business 2 years. In general, the better-performing agents with experience obtain the broker licenses to allow them full responsibility in a transaction. What that means to you is that a salesman has limited authority, such as in not being able to modify commissions or the brokerage's fees "to make a deal", whereas a broker probably has the authority to do such. That can make a heck of a difference in putting a deal together - there are plenty of times when a buyer and seller are only a few hundred dollars apart in price and no one will budge - a salesman may throw up his hands and walk away in frustration, but a broker may say "No problem , I'll chip in a few commission dollars to make this deal work". Agents who obtain a broker's license usually have more experience and make less mistakes with their clients than agents holding salesman licenses. You can go to Ohio.gov under the professional licensing section and see who has what, and see if there are any license violations on record. Only persons having real estate licenses may sell real estate for others; unlicensed persons attempting to sell real estate they do not own themselves can face criminal charges; one person last year was cited for 39 violations and fined by the state $39,000 for his misconduct; his story is on the web. We have a couple guys in the Akron area who went to the federal prison a few years ago for their continued misconduct. And most recently, the owner of Akron-based Evergreen Homes / Evergreen Investments (now bankrupt) who ran newspaper ads for "no money down, bad credit okay" is currently on trial for federal securities fraud and other license law violations that defrauded customers/banks and allegedly put people into foreclosure, so it is always prudent to check Ohio.gov to see if you are working with an actively licensed agent with a clean record.
1 vote Thank Flag Link Fri Jan 23, 2009
you are welcome. your answers are excellent and you explain in detail, and luckily i have the intelligence to follow you. your answer was the best by far i have received on any questions i have ever asked.
thanks so much.
0 votes Thank Flag Link Fri Jan 23, 2009
PS. Tks for the Best Answer vote.
0 votes Thank Flag Link Fri Jan 23, 2009
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
Disclosure of ownership of a brokerage firm may vary state by state. In many states, the broker‘s name must be prominently displayed on the doorway. Call any office and ask who is the managing broker, and you will usually be told instantly who is local managing broker for that office. Ownership, however, is generally not a required disclosure.

If you phone an office and simply ask for ownership disclosure, many will tell you. If you phoned my office and asked the name of the broker, you would promptly be given my name. If you asked for the owner, one might question you about the purpose of your call. When someone calls and asks for the owner, our front desk will generally assume it is a solicitor who is unfamiliar with real estate. Most vendors selling to real estate offices, or callers seeking the management of a real estate company will ask for the broker. A real estate license is not required to own a company in most states, but the owner must employ a licensed broker to manage the brokerage activity.

If you seek to find the owner of a firm, ask…they will likely just tell you. Alternatively, many public records provide ownership information. These public records can be found at local, county and state levels, depending upon the type of entity.

Do I sell and list the same property? I believe that you are asking if I am the listing agent, will I represent a buyer also in the same transaction? Agency laws vary state to state. In New Jersey, dual agency is legal. In New Jersey, agency relationships are at the brokerage level with no legal differentiation at the agent level. In some states, there is an agency relationship of designated agency which provides for individual agents working with buyer and seller to have a different agency relationship. In New Jersey, we have buyer agency, seller agency, dual agency, and transaction broker (no agency.) Since dual agency is determined at the company level (not branch, company), any time that any agent in the company sells another agent’s listing, we are in dual agency. So, the proper answer to you, based upon the laws of agency in the State of NJ, is that yes, we do represent both buyer and seller on the same transaction.

In day-to-day practice, I do not personally represent both the buyer and seller in the same transaction. I did make one exception last year, at the request and permission of both the buyer and the seller. The transaction went smoothly, and there were specific reasons for the exception. As a general policy, I prefer to not maintain direct contact and direct relationships with both a buyer and seller on the same transaction. I will show buyers my listings, and ask that they not share any details with me that they do not want me to share with the seller. If they have any interest in pursuing the property further, I will ask that buyer to work with another agent in our company. (In NJ, both agent remain dual agents, though.)

I believe that in most cases, buyers and sellers are best serviced by separate representation. While I do know of many successful transactions completed in dual agency, I am not a fan. I believe there is inherently too much risk for all parties.
0 votes Thank Flag Link Fri Jan 23, 2009
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
how do you find out who the broker is that owns a company?
thanks for the great explanation deborah.

do you sell and list on the same property or do you feel you can only represent one person? just curious.
t
hanks
0 votes Thank Flag Link Fri Jan 23, 2009
Cindy,

Brokers and realtors have different licenses. A realtor's license allows him/her to practice real estate for a broker.

A broker's license allows the individual to open a real estate business and have other reators work through their office selling real estate. It is common for people with a broker's license to work as agents or managers for other brokers.
0 votes Thank Flag Link Thu Jan 22, 2009
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