Home Buying in 33330>Question Details

Ambachal, Home Buyer in 33332

what's the difference between a Broker or an Agent?

Asked by Ambachal, 33332 Mon Oct 3, 2011

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Broadly speaking, an agent is anyone hired by a principal (client) to act on his behalf. In regulated industries like real estate or financial securities, there's a further distinction made between a broker and a sales agent. Within the real estate industry, convention has shortened the term "sales agent" to just "agent", perpetuating confusion amongst consumers. By contrast, the recently chastised finance industry has led its self-governing body, FINRA, to stick very strictly to "broker" and "sales representative" as its standard industry terms.

For both industries, a broker is one who is licensed to execute transactions while a sales agent is only permitted to assist the broker in bringing together a transaction. Hence, this leads to the more pragmatic definitions of brokers and sales agents offered by others: Brokers 1) must stand to a high level of industry knowledge and competence as verified by examination, 2) are able to legally open a brokerage, 3) take on nearly all liability for issues with transactions, and 4) bear additional operating expenses like insurance. Sales agents/"Agents" 1) meet minimal standards of industry knowledge by examination, 2) must work for a licensed broker, 3) have fewer responsibilities and accept fewer liabilities, and 4) receive after-expense commission splits from brokers.

As mentioned, a broker can choose to work under another broker's brokerage and be positioned somewhere between a broker-owner and a sales agent in terms of responsibility.

The relationship between broker and sales agent is very similar to that between a doctor and nurse or a lawyer and paralegal. So, just like an experienced nurse may have far more practical knowledge than a fresh doctor, the ultimate responsibility still lies with the doctor and his judgment.

While it would be most ideal for clients to work directly with brokers, the reality is that they've often got limited available time as they're overseeing their brokerage, managing their sales agents, and reviewing contracts. So, if you have an opportunity to work with a broker, that's a great luck of the draw. Otherwise, experienced sales agents are more than sufficiently helpful for most clients' needs.
Web Reference: http://www.archershomes.com
3 votes Thank Flag Link Tue Oct 4, 2011
Kevin,

I don't know if agency relationships are interpreted differently in Florida, but what you wrote is misleading. A real estate agent or salesperson does not have a principal. Only the real estate broker may have a principal and is an agent of the principal. A real estate salesperson is an agent of the real estate broker and has a fiduciary responsibility in servicing the principal of the real estate broker.

The old practice of interchangeably using the terms "real estate agent" and "agent" makes this very confusing. In California, the DRE is moving towards using the terms "broker" and "salesperson" for the sake of consumers.
Web Reference: http://www.archershomes.com
1 vote Thank Flag Link Wed Oct 5, 2011
Ambachal,
The term varies some in certain states, but generally a person becomes an agent first, and if they choose to after some level of experience required by law, can later become a broker.
A Broker can be an associate broker or a managing broker. An associate broker may or may not manage other agents. A managing Broker is responsible for the actions of the agents they supervise. All agents must be associated with a broker to conduct business.
There are good agents, with many years of experience who never decide to become Brokers. To become a broker the education requirements are greater, another more substantial test must be taken and typically the licensing fees are greater. I hope this helps.
1 vote Thank Flag Link Mon Oct 3, 2011
Both of them real estate experts
1 vote Thank Flag Link Mon Oct 3, 2011
A broker can open his/her own office and can have an escrow account, an agent cannot. Agents usually specialize in helping home buyers and sellers. Brokers are usually pretty busy running their offices and managing the brokerage.

I'd be happy to help if you need real estate assistance.

Richard Ferris
Coldwell Banker
*54-914-9466
0 votes Thank Flag Link Thu Mar 12, 2015
Brokers can hold escrow, agents can't.
0 votes Thank Flag Link Thu Oct 3, 2013
In Florida, in most cases, the Buyer representation agreement and the Seller Listing agreement are a contract between the BROKER and the Seller or/and the buyer, NOT between the agent and the client/costumer....
0 votes Thank Flag Link Mon Sep 17, 2012
Simply put.

An Agent has a principal, you for instance. A broker can too if he or she lists or sells property. An agent must take additional classes and pass additional tests to obtain a broker's license.

A Broker can open an office or run an office and have control over other agents and brokers. Agents can not.
0 votes Thank Flag Link Tue Oct 4, 2011
I vote for Dan Tabit's and Anna Brocco's as best answers.
0 votes Thank Flag Link Mon Oct 3, 2011
Ambachal,
Aidet answered perfectly! In Florida an Agent has to have their Real Estate license with a Broker, but either can sell Real Estate.

Please let me know if I can help you with your home search. I specialize in Cooper City and the surrounding areas.

Best regards,
Stefanie Cohen, PA, ABR, SFR
Prudential Florida Realty
954-547-9203
Scohen77@aol.com
0 votes Thank Flag Link Mon Oct 3, 2011
They hold different types of licences. Brokers may or may not have agents under them; an agent has to have his license under a broker. Both agent and a broker can list and show property for sale.
0 votes Thank Flag Link Mon Oct 3, 2011
Generally they are 2 different licenses, both licensed by the State; a broker must be an agent first; after completion of required experience time and transactions, extra educational classes, and the passing of a State test, he/she can apply for a broker's license. An agent must work for a broker, who can legally open a real estate company; all listings are under the broker name not the agent. Regardless agent or broker, one should be able to expect the same level of service.
0 votes Thank Flag Link Mon Oct 3, 2011
Agents are generally managed by a broker, however in some states once you have your license you are immediately a broker.
0 votes Thank Flag Link Mon Oct 3, 2011
An agent is responsible for assisting buyers and sellers with the sale or purchase of thier home. Brokers have more experience and training and are usually responsible for agents. Many times managing the office. Brokers will often incur a greater amount of legal liability for the transactions through the office.
0 votes Thank Flag Link Mon Oct 3, 2011
An agent is a preson who performs real estate services under the direction, control or management of another person. The broker is the individual who would provide the management of the salesperson. The licensure requirements of the two individuals is a little different, with the broker requiring additional training.

Hope this helps
0 votes Thank Flag Link Mon Oct 3, 2011
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