The terms real estate “agent” and real estate “broker” are frequently used as though they mean the same thing. But, in fact, they do not. Brush up on the key differences between real estate agent vs. broker.
Real Estate Agent
A real estate agent is a person who is licensed by a state to represent buyers, sellers, and renters of real estate in that state. The requirements of each state differ as to what is required for a person to become a licensed real estate agent. For example, most states require aspiring agents to undergo a minimum of training in real estate transactions. The minimum number of training hours varies significantly from state to state. In Virginia, a person must have a high school degree, or equivalent, and 60 hours of pre-licensing training. But to become a real estate agent in California, a person needs 135 hours of license coursework. In Texas, you need 180 hours.
After meeting the basic qualifications and successfully completing the required pre-licensing training, the next step is to pass a written licensing exam administered by the state’s real estate board. The exam covers state and federal real estate laws and general real estate principles. Upon passing the exam, the person becomes a licensed real estate agent. Once licensed, the agent can join a real estate brokerage and begin working with home buyers, sellers, and renters. Agents are paid on a commission based on a percentage of a property’s contract sales price.
To maintain their license, real estate agents must pay an annual licensing fee and renew their licenses every one or two years, depending on the state. Other differences between real estate agent vs. broker involves continuing education. Some states require annual continuing education courses as a condition of renewing a license.
Real Estate Broker
To become a real estate broker, a person must first be a licensed real estate agent and meet the qualifications for a broker’s license that are set by the state’s real estate board. In most states, a real estate agent must have been working as a real estate agent for a period of time specified by the state’s real estate board, usually two or three years. In Virginia, an agent is eligible after being actively engaged as a salesperson for 36 out of the 48 months preceding the application for licensure. Additionally, the agent may need to have recommendations from other brokers to support the agent’s application for the broker’s license.
Becoming a broker requires the agent to successfully complete the state’s broker education requirements. The education consists of coursework on advanced real estate topics involving contracts, taxes, real estate legal issues, and insurance. Aspiring brokers also learn about the complex issues they may face in operating a brokerage firm, handling real estate investments, construction, and property management. The aspiring broker must have successfully completed 180 classroom hours of approved real estate broker pre-licensing courses.
Once the agent satisfies those requirements, the agent must pass the state’s examination for a broker’s license. In Virginia, the exam can be taken in two parts. If the agent passes the first part of the exam, the agent has twelve months to take the other part.
As a licensed real estate broker, a person may choose to specialize as one of three types of brokers, depending on the role they prefer to perform:
Principal/designated broker: Each real estate office has a principal/designated broker who operates in compliance with state and federal laws and supervises licensed real estate agents. They must review all real estate contracts handled by their agents and resolve disputes with other agents. Principal brokers may receive a base salary and/or get paid on a percentage of the commissions of the sales agents they supervise. They do not usually work with clients like sales agents and managing brokers.
Managing broker: In a large brokerage firm, the managing broker oversees the day-to-day operation and transactions of the office. They hire agents, handle their training, and manage administrative staff. In smaller firms, the principal/designated broker may also serve as the managing broker.
Associate broker: An associate broker is a licensed broker but is working under the supervision of a managing broker. An associate broker usually has no responsibility to supervise other agents.
Training is also a factor when considering a real estate agent vs. broker. Becoming a broker carries important responsibilities in connection with managing and training the agents under their supervision. In Virginia, real estate brokers are responsible for overseeing their agents. If an agent violates the law and the broker takes no action on it, the broker can be disciplined by the state’s real estate board.
Contact the Katie Zarpas Group for More Information
The professionals at the Katie Zarpas Group are available to answer any of your questions about real estate or the real estate business. Katie Zarpas has many years of experience specializing in Virginia properties. Consult with the team for more information about buying, selling or renting a Virginia property. Reach out today by phone at 757-685-4400, or schedule an appointment online