Perhaps one of the biggest misconceptions in the property buying and selling business is that a real estate agent is the same as a real estate broker. Nowadays the majority of brokers seem to get classed as ‘real estate agents’ when they aren’t.
I’ll describe later in this article how you can save time and money by working directly with a real estate broker. However, first let’s describe some key differences between the two:
A real estate broker may work for themselves or for another broker. A real estate agent must work under the guidance of a broker. You will never see a real estate agent operating on their own because they simply aren’t allowed to. Part of the reason for this is that real estate brokers are a great deal more ‘qualified’ for the position than real estate agents. While a real estate agent’s training is pretty intense it is nowhere near the intensity of a real estate broker. A real estate agent will only need to pass a couple of short courses. The course material will depend on the state that they operating in, but it at the most it is going to be about 100 hours total. On the other hand, a real estate broker will need to go through much more training.
Below are some basic differences:
Broker:
- High level of real estate knowledge and exam completion
- Legally qualified to open and operate a brokerage firm
- Liable for Transaction Issues
- Works above a licensed real estate agent
Agent:
- Knowledge of the industry and lesser examination
- Must be employed under the guidance of a licensed real estate broker
- Less responsibilities and liabilities
Brokers “normally” only directly get involved with real estate transactions in a managerial way, but real estate agents are more involved in all aspects of real estate transactions. However, both are qualified to assist clients with:
- Making offers on potential purchases
- Financing applications
- Inspection arrangements
- Property locating
- Writing legal purchasing agreements
Although both real estate brokers and real estate agents can handle these tasks, only brokers can handle earnest money that is deposited in advance of a sale. By choosing a qualified real estate broker, you will most likely have access to a real estate agent that will guide you through the real estate process and the broker will oversee your transactions. Both roles are essential to the real estate business and work in combination to provide impeccable service to clients. However, it is the broker that accepts the risk for most transactions and has the greatest amount of liability. If you are dealing directly with a real estate agent they will need to go to their broker in order to get approval for anything.
If you deal with a smaller company there is a good chance that you will deal directly with the broker. In fact, in smaller companies brokers tend to work on their own with no real estate agents underneath them. This can bring you two main benefits:
If you are working directly with the broker they will not have to split commissions with an agent who works for them. Because of this you can usually negotiate lower commissions if you are as seller, or get more cash back if you are a buyer.
Secondly, transactions tend to go through quicker. This is because there is no middleman (or middle-woman :)). In large companies it can take extra time for a real estate agent to get a response from a broker:
When you buy a home complicated issues, mostly legal, tend to come up. If you work with a real estate agent they will need to go directly to their broker to have these issues resolved. This can take A LOT of time. By working directly with a broker directly you can get issues cleared up quickly, and can continue with the sale or purchase. Also, often you will be able to secure a better price on a property with a broker since good brokers can be fantastic at negotiations. In short, you are going to get a considerable amount of better customer service by working with the right broker directly.
If you are a home buyer or seller you can save thousands in fees by visiting www.BargainAgents.com
Cheers,
By Tony Dosanjh
Founder/CEO Bargain Agents Inc.
