Whats the difference between real estate broker and agent

In California, a real estate agent and a real estate broker are two different things. Yes, they both facilitate the purchase and sale of real estate. But there are a few key distinctions between the two titles.

If you’re considering getting your California real estate license or your California broker’s license, you’re probably wondering what is the difference between a real estate agent and a real estate broker in California?

Key differences between a Real Estate Agent and a Real Estate Broker in California

Basic Differences

Perhaps the biggest difference between a real estate agent and a real estate broker is that a broker can legally own a real estate firm and hire real estate agents to work under him or her. Real estate agents do not have this opportunity. 

Real estate agents are required to work under a supervising real estate broker in California. Brokers, on the other hand, have the freedom to work under another broker, work completely independently, or build their own real estate companies full of real estate agents working under them. 

Differences in Education Requirements

California real estate brokers are required to take more real estate education courses than real estate agents. While agents need only three college-level courses to qualify to take the state exam, brokers need eight.

Neither designation requires a college degree, but brokers in California can meet their education requirement by completing a 4-year degree with either a minor or major in real estate.  

Differences in Experience Requirements

Real estate agents in California do not need any experience in the real estate field to become licensed. They learn real estate principles and practices through their education requirements and can rely on their brokers to oversee their work as they learn on-the-job. 

Brokers in California, however, must prove that they have experience in the industry. This additional requirement can be met in one of two ways:  

1. Earn a Bachelor’s Degree from an accredited college or university with a major or minor in real estate.

2. Gain two years’ real estate sales experience or equivalent. Equivalent experience includes careers in fields like property management, real estate development, escrow processing, and mortgage lending.

Having real estate experience is an important qualification for any broker since they are able to work without supervision by another broker.

Differences in Exam Requirements

The exam requirements for agents and brokers in California is similar. But brokers are held to a higher standard.

California real estate agents need to complete a 150-question exam over three hours and score at least a 70% to pass. California real estate brokers need to complete a 200-question exam over five hours and score at least a 75% to pass. 

Differences in Fees

Both agents and brokers in California pay exam fees and licensing fees. Both groups also pay renewal fees when the time comes to renew their licenses. But the fee amounts are a bit higher for brokers since their qualification process is a bit more complex. 

For California real estate agents:

• Real estate salesperson exam fee - $60 

• Real estate salesperson license fee - $245

• License renewal fee - $245

For California brokers:

• Broker exam fee - $95

• Broker license fee - $300

• License renewal fee - $300

Should You Be a Real Estate Agent or a Real Estate Broker?

You don’t need to choose between being a real estate agent and a real estate broker right away. Most California real estate professionals start as real estate agents to gain some real-world experience and make sure the career path is a good fit for them. Then they promote themselves to real estate brokers when they feel ready to grow their careers.

Now that you understand the difference between a real estate agent and a real estate broker in California, you can start planning your real estate career path. Take the first step today by enrolling in your pre-license real estate education courses. Your new career is waiting!

There are several types of real estate professionals, and understanding the role of each can spare you some confusion when buying or selling a home. Real estate agents and brokers are titles that are commonly heard. Brokers can work as agents, but agents can't work as brokers, at least not unless and until they have a broker's license.

Key Takeaways

• There are many types of real estate professionals, and their roles vary.
• Real estate brokers are licensed to own their own firms, and real estate agents are the people who work under them as licensed representatives.
• Brokers and agents can represent specific parties in a purchase contract, such as the seller, the buyer, or both in a dual capacity.

What's the Difference Between a Broker and an Agent?

A real estate broker is a step above a real estate agent and often has more training and education than an agent. They can work independently or hire real estate agents to work under them. The exact rules can vary from state to state, but most have similar requirements. 

Agents are licensed salespersons, but they aren't brokers. A real estate agent can't work independently; they must work for an employing broker. Brokers are responsible for their real estate agents' actions.

Note

Requirements for acquiring a real estate salesperson's license vary from state to state.

Becoming a Broker

A broker's license is required to work by yourself as an agent. Using California as an example, you can obtain a broker's license in any of three ways:

• You can qualify to take the broker's real estate exam if you have a four-year college degree with a major or minor in real estate and if you've also completed eight college-level real estate courses.
• The California Bureau of Real Estate requires that you have at least two years of real estate sales experience and that you have completed eight college-level real estate courses if you don't have a four-year degree.
• Lawyers who have been admitted to the bar are exempt from the college-level course requirements, but they must still pass the exam. 

The broker's exam is generally longer and more difficult than an agent's or salesperson's exam. Brokers are held to a higher standard of knowledge.

Becoming an Agent

Using California as an example again, applicants must be at least 18 years old and must have successfully completed three college-level courses in real estate. State residency is not a requirement.

Other Real Estate Professionals

Agents can specialize in a variety of areas, and both brokers and agents can take the extra step to become Realtors.

What Is a Realtor?

The title means that the individual belongs to the National Association of Realtors (NAR) and that they subscribe to its extensive code of ethics and pay annual dues.

Note

All Realtors are agents or brokers, but not all agents or brokers are Realtors.

NAR members also belong to state and local trade associations. A complaint against a Realtor can be filed with the local board.

What Is a Listing Agent?

Listing agents are also known as "seller's agents," because they represent sellers. A listing agent can be a real estate broker or a real estate agent. They owe a fiduciary responsibility to the seller under a listing agreement and must protect that interest above their own.

What Is a Buyer's Agent?

A buyer's agent is known as a "selling agent" (not to be confused with a seller's agent), a "buying agent," or, in some states, an "exclusive buyer's agent."

Exclusive buyer's agents never work for sellers. Many agents work with both sellers and buyers, although not usually in the same transaction. Buyer's agents may or may not require a buyer to sign a buyer's broker agreement, depending on local custom and law.

What Is a Dual Agent?

Agents enter dual agency when they represent both the seller and the buyer in the same transaction. Dual agency can happen even if two agents are involved—a listing agent and a buyer's agent—if both agents work for the same broker. The real estate broker becomes the dual agent in that case. Dual agency is not legal in all states.

What Is a Transaction Agent?

Listing agents might find themselves in the position of writing an offer for the buyer in states where dual agency isn't permitted. These agents can elect to use a transaction agent who doesn't represent either party. Instead, they simply facilitate the transaction.

What Is a Broker Associate?

A broker associate is a real estate broker who works for another real estate broker or for a brokerage firm. Although brokers can work for themselves, many choose to join with larger real estate networks. Some pay a flat fee to the employing broker, and some earn a percentage of each transaction.

The Bottom Line

Knowing the types of real estate professionals can help you make informed decisions when you're buying or selling a home. You may want to look into the real estate broker's reputation when you're hiring an agent, because that's whom the agent works for and who is responsible for the actions the agent takes.

Most states maintain a website where consumers can look up an agent's name, get a license number, and check on any violations filed against them.

Frequently Asked Questions (FAQs)

How much do real estate brokers and agents make?

Wages for real estate brokers vary greatly, depending on factors such as geographical location, but according to the Bureau of Labor Statistics they earn an average wage of $86,490 nationally, while agents earn an average of $61,480.

How long does it take to become a real estate agent?

The amount of time to become a real estate agent varies by state, but in Louisiana, for example, a person must complete 90 hours of classes, be sponsored by a broker, and pass a real estate licensing exam. In most cases, this process takes between four and six months.

How do real estate brokers and agents make money?

Real estate agents earn money when they successfully sell a home by representing a buyer or seller. Brokers may also earn money in this way, and they also may receive a portion of an agent's commissions. In some agencies, brokers may be salaried employees.