Real estate brokers vs. agents: What’s the difference?

If you’ve ever considered buying a home, you know the real estate industry comes with a full set of unique terminology, from contingencies and escrow to amortization and appreciation. But one of the most important distinctions to wrap your head around is the difference between a real estate broker versus an agent. The rest comes with time.

In this guide, you’ll find out what each role does and which is right for your needs. You’ll also learn how Better can save you time and money by referring you to a reputable agent in your area.

Real estate agents vs. brokers: What sets them apart?

Real estate agents and brokers have a lot in common. Both are salespeople licensed to help clients buy and sell real estate, and both get a commission for closing a deal.

But real estate brokers have more strict licensing requirements than real estate agents. That’s because brokers have the additional legal right to work independently of an agency and hire other agents as well. With this benefit comes extra responsibility: Brokers have to personally verify that all the real estate transactions made by them or their agents are lawful, all the paperwork is filled out correctly, and everything is above-board financially.

Here are the key differences between real estate agents and real estate brokers, summarized:

	Real Estate Agent	Real Estate Broker
Experience	No minimum requirement	2–5 years as a real estate agent
Qualifications	Varies by state. In most areas, licensed agents must be at least 18 years old and be a U.S. resident.	Varies by state
Responsibilities	Helping clients buy and sell homes by navigating the housing market, advertising and marketing properties, and negotiating deals	Everything a real estate agent does, plus ensuring legal compliance for transactions and potentially managing other agents

What’s a real estate agent? Responsibilities, types, and qualifications

Real estate agents work with clients to buy and sell homes. 

For buyers, their key responsibilities include:

— Helping clients decide what their perfect home looks like: This means giving information about property features, local school districts, neighborhoods, and anything else a homebuyer needs to know to make the right choice.

— Finding listings that match the buyer’s preferences: Real estate agents share properties from multiple listing services that fall within the buyer’s target budget.

— Arranging property tours: After settling on a list of candidates, agents guide buyers through the homes. They answer questions and point out key features of each home and area so buyers can get a feel for the space.

— Coordinating next steps: Real estate agents often connect buyers with trusted lenders (like Better), inspectors, appraisers, and other resources needed to finalize the deal.

For sellers, their duties are:

— Setting prices: Real estate agents use data like “comps” (comparable property sales in the area) and their knowledge of the local industry to set a competitive price point.

— Marketing the property: Agents also arrange staging and photography to present the home in the best possible light and run ads to attract potential buyers.

— Hosting open houses: An agent may also personally hold open houses to show off the property to potential buyers and answer any questions they might have.

On both the buy side and the sell side, real estate agents write and accept offers, negotiate pricing, and help with paperwork and the closing process. After closing a deal, real estate agents get a commission as a percentage of the sale price.

Types of real estate agents

Most real estate agents fall into these primary categories:

— A buyer’s agent focuses on helping buyers find homes they’ll love.

— A listing agent works with sellers to get a good price for the property and close the deal within a reasonable timeframe.

— A rental agent does much of the same work as buyer’s agents and listing agents, but the outcome is a rented house or apartment rather than a sold property.

Real estate agent licensing requirements

Most real estate professionals need a license, and agents are no exception. While specific requirements vary by state, becoming a licensed real estate agent may involve:

— Taking a pre-licensing course

— Passing state licensing exams

— Undergoing a background check

— Filling out an application and paying a fee

Licensed real estate agents need to be at least 18 years old and a legal resident of the United States. They’re usually part of a licensed real estate broker agency and may have to take continuing education courses to keep their license current.

What’s a real estate broker, and what do they do?

So, is a broker a real estate agent? Not quite — real estate brokers can do everything a real estate agent does, including buying and selling houses, but they have a few extra privileges and responsibilities. They can work independently of an agency and hire other agents, and they’re obligated to take care of legal aspects of the work that real estate agents delegate to a brokerage.

Types of real estate brokers

Different types of estate brokers handle different parts of what a brokerage does, from selling houses to navigating legal red tape. There are several types, including:

— Broker associates: Much of the work of a broker is the same as a traditional real estate agent. They price and market homes, help buyers find what they’re looking for, and negotiate deals. The difference is that broker associates also take care of legal tasks usually handled by an agency, like reviewing contracts, resolving transaction issues, coordinating disclosures, and making sure everything happens in compliance with real estate laws and regulations.

— Brokers of record: Brokers of record focus on the legal side of things for the entire brokerage rather than day-to-day sales.

— Principal/designated brokers: These brokers own and run real estate agencies. They play the leadership and management role, hiring real estate agents and other types of brokers, overseeing operations, and making sure everything runs smoothly.

— Managing brokers: Managing brokers help train new agents, refine brokerage marketing strategies, and review transactions for legal compliance.

Real estate broker licensing requirements

The requirements for a real estate broker license versus a real estate license are similar but a little more involved. They depend on the state but usually include:

— Gaining experience as a real estate agent: Getting licensed as a broker typically requires two to five years of experience as a licensed real estate agent first.

— Getting additional certifications: Brokers often need certifications beyond just a real estate license due to their wider range of activities and responsibilities. For example, in California, aspiring brokers have to take eight college-level courses on subjects like business law and real estate appraisal.

— Applying for a license and paying the required fee: The final step to becoming a certified broker is applying for the license and paying a small fee.

What’s a realtor?

People often use the term “realtor” interchangeably with “real estate agent,” but there’s a more precise definition. A realtor is a real estate agent who’s a member of the National Association of Realtors (NAR). NAR lays down a code of ethics pledging members to be honest and transparent in all their business interactions and to always act with their clients’ best interests in mind.

Agents vs. brokers: Which one should you choose?

Since real estate agents are backed by brokers in the form of an agency, they often come as a package deal. That means if you’re working with an agent, there’s already a brokerage firm behind-the-scenes looking after the legal side of your transaction. That said, if you’re working with a more complex type of transaction, like a short sale or buying a foreclosure, working with a more experienced broker associate might pay off. 

Better hand-picks the most reputable agents to help with your homebuying process. Plus, if you use a real estate agent referred to you by Better Real Estate and choose to use Better as your mortgage lender, you may be eligible for $2,000 off your closing costs. 

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Broker a great mortgage deal with Better

Real estate agents and brokers work together to help you find the house of your dreams or sell your home for a bundle. Since they usually come as a package, going with an agent is a simple and effective choice for most homebuyers.

Choosing a lender takes a little more thought. With Better, you get competitive interest rates, access to the most experienced agents, and the potential to save money with Better’s discounts and no-commission listings — all with no hidden fees.

Apply in as little as three minutes to see how Better can keep more money in your pocket.

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Frequently asked questions

What responsibilities do real estate agents have?

Real estate agents help clients negotiate deals for buying and selling property.

For buyers, they find homes that match what they’re looking for, arrange tours, and help with finding resources like lenders and appraisers.

For sellers, they set competitive prices, market the property, and run open houses.

What responsibilities do real estate brokers have?

Like agents, real estate brokers also help people buy or sell homes, but they have the additional responsibility of ensuring legal compliance for every transaction.

What’s the primary difference between a real estate broker and a real estate agent?

Real estate brokers can work independently and manage a team of hired agents. They also have a minimum of two years of experience as a licensed real estate agent.