Difference Between Realtors, Agents, and Brokers
When you decide to invest in a property, you require professional assistance. Real estate investment is complex, and you need a commercial real estate broker to guide you through the process. But should you hire a realtor, agent, or broker who can help you with your investment?
Most people get confused between realtors, agents, and brokers. You may hear people using them interchangeably. Well – all of them are involved in property analysis and transactions, right? Yes, but there are stark differences in each and the roles they perform when it comes to real estate.
What Differentiates Between Realtors, Agents, and Brokers?
What follows is a comprehensive distinction between realtors, agents, and brokers. Once you clearly understand the difference, you’ll know whom to hire for meeting your real estate requirements. Let’s have a look at the difference between realtors, agents, and brokers. You will also understand their job functions and how they can help you with your investment.
Real Estate Agents
Real estate agents, often referred to as realtors or real estate salespeople act as the intermediary between the buyer and the seller. Mostly, they act as a buyer or seller in a transaction and provide market insight and transactional expertise to help facilitate the transfer of property from one party to another. They act as representatives for property owners selling their property, buyers purchasing property and also work as agents to help tenants find rental properties within their budget.
Real estate agents have to pass licensing exams and pay errors and omission insurance before they can trade in real estate. Generally, they represent both the buyers and sellers and conduct a property analysis to find the perfect match for each other. They work on a commission basis and get a certain percentage of the deal amount from one or both the parties. However, there’s no fixed percentage. It depends upon the value of the real estate deal, which varies every time.
The agents register with a brokerage firm. They work on behalf of this firm, and all the deals are processed through the brokerage.
Job description of real estate agents
Real estate agents represent buyers, sellers, tenants and landlords. For example, real estate agents will provide tenant representation in Burlington for tenants who are looking for a space to rent. They will have a list of properties in Burlington which they think would match the tenant’s budget. Once the deal is done, they get a commission, typically from the landlord.
- Get the best possible price for both buyers and sellers
- Conduct property analysis before listing a property or showing a property
- Promote property listings from the buyers end through online & offline methods
- Draft legal documents to facilitate the real estate deal
- Communicate with buyers and sellers for transactions & deal issues
Real Estate Brokers
Real estate brokers are one step ahead of the agents and complete additional education courses and the professional brokerage exam on top of the regular agent/realtor exam. They receive a real estate brokers license and can start a brokerage firm by hiring real estate agents who act on its behalf.
The major difference between real estate brokers and agents is that brokers can work independently or hire agents to work for them. Tenant brokers often have a brokerage firm with 2-3 agents who assist tenants looking for property and owners who have space for lease.
All the deals pass through the brokerage, and the brokers take a share from the deal amount which may or may not be included in the agent’s commission. The amount is previously mentioned in the contract. The agents agree to share that part of the commission. One thing to note is that before an agent can become a broker, he or she must first complete at least 2 years as a real estate agent for another brokerage firm.
Job description of real estate brokers
Commercial real estate brokers perform a variety of functions in the real estate industry.
- They manage and supervise all the real estate agents that work for them
- Conduct negotiations, prepare offers with agents and help in closing the deal
- Provide tenant and landlord brokerage services for commercial and residential leasing
- Hold buyer’s money deposit in escrow to properly account for the transaction
- Fulfil the legal formalities and documents for every real estate deal
Hiring a qualified real estate professional is extremely important when dealing with commercial real estate. Properly qualified Realtors and Brokers can assist all parties with an abundance of real estate issues and likely have extensive experience in whatever challenges you and your team are facing. They are obliged to serve their client’s best interests and do so with pride, integrity and desire for the best deal possible.