What's the Difference Between a Real Estate Agent and a Broker?

You can think of a real estate agent as an entry-level position, whereas a real estate broker is someone further along in their career. Real estate agents need to join a brokerage to sell property, whereas real estate brokers can work independently or supervise real estate agents.

The main differences between a real estate agent and a real estate broker can be broken down into a few categories:

• Educational requirements
• Career opportunities
• Job duties

In this article, we will break down these differences and similarities to help you understand what each role entails and how to become one.

• Agent vs. Broker Breakdown
  
• How to Become a Broker
  
• How to Become an Agent
  
• How Brokers and Agents Work Together

Real Estate Agent vs. Real Estate Broker

A real estate agent is an individual who has fulfilled all of their state’s salesperson licensing requirements and has earned their real estate license. States have different requirements, but all require completing a certain amount of prelicensing education and passing an exam. After earning licensure, a real estate agent must be hired by a brokerage to perform real estate work.

Similarities Between Real Estate Brokers and Agents 

Both brokers and agents can work on each side of the real estate transaction (buying and selling). They will help buyers find a property or help sellers find buyers. They can also manage the closing process which includes preparing and submitting offers on behalf of their clients. 

Differences Between Real Estate Agents and Brokers

Again, think of a real estate agent as an entry-level position and a broker as a higher-up position within the brokerage firm. Real estate agents will often work for a brokerage firm, whereas real estate brokers can start up a brokerage and hire real estate agents.

The brokerage provides the agent with the support, guidance, and sometimes the resources necessary to do their work. In return, the brokerage takes a split from the real estate agent’s sales commission.

Brokers are allowed to work more independently and manage a team of real estate agents because they will have more in-depth training. 

Licensing Similarities and Differences

Real estate brokers start as real estate agents. After some experience, real estate agents can decide to pursue their broker’s license, which requires additional training and education.

The additional licensure allows brokers more freedom and possibilities than real estate agents. Brokers can work under a brokerage while supervising other agents (usually called a Broker Associate) or work independently while owning their own business (Broker Owner).

While operating independently, brokers might hire real estate agents to work under them to become more profitable. Ultimately, brokers can shape their career path, with or without oversight from a brokerage.

This freedom is ideal for many prospective real estate agents. The career path of a real estate broker offers control, flexibility, and the potential to earn much more money. If you’ve decided to pursue your broker’s license one day, take a look at what you’ll need to do to accomplish this goal.

Thinking about starting a real estate career? Download the Launching Your Real Estate Career eBook.

Pay Differences Between Agents and Brokers

Real estate brokers typically earn more money than agents. Often, brokers will make more money because they receive commissions on their deals and the deals made by the agents that work for them.

 For example, a broker who owns their brokerage firm can make double the commission when their company sells a property because the broker and the real estate agent will receive a percentage of the commissions from a sale.

Both real estate agents and brokers are primarily paid through commissions of a sale, and that commission comes from the seller. According to the Bureau of Labor Statistics, a real estate agent’s median national annual salary is about $10,000 less than a broker’s median annual salary.  

Differences Depending On Your State

Similar to other industries and job roles, where you live can dictate how much money you can potentially earn as a real estate agent or broker. Some factors that contribute to the earning potential of a real estate agent or broker can be the cost of living, population density, local industries, and market conditions.

For example, according to the Bureau of Labor Statistics, a real estate agent’s annual mean wage is almost $20,000 less for agents in Colorado than in the District of Columbia.  

How to Become a Real Estate Broker

All states have different requirements for broker licensure, but in general, you will need to complete the following:

1. Learn your state’s requirements for broker licensure.

Just like with real estate licensure, the requirements to earn your broker license vary by state. Finding out what your state requires can save you a lot of time in the long run, and can give you a solid roadmap for your initial years as a real estate agent. You can find the requirements you will need to fulfill on your state’s real estate commission website.

For example, in California, prospective brokers will need a minimum of two years of full-time experience as an agent in addition to 8 college-level real estate courses. Knowing what you will need to accomplish in order to get your broker license can help you map out your schedule as early as possible.

2. Complete the required years of experience as an agent.

On average, most states require 2-3 years of experience working full-time as a real estate agent. You could potentially take your broker exam 2-3 years after joining your first real estate brokerage. This may seem like a long time, but it will go fast. You will be busy learning on the job and from your fellow real estate agents, in addition to taking the required coursework to qualify for the broker exam.

3. Take the coursework that your state requires.

In addition to experience, you will need to complete further coursework that elaborates and expands based on the knowledge you built during your prelicensing education. Real estate brokers are expected to be experts in their field, so becoming fluent in the necessary subject areas is essential. Many states offer the option of taking real estate courses online so that you can balance your work life with studying.

4. Pass your state’s broker licensing exam.

The broker licensing exam is different in every state. Check with your state’s real estate commission website to determine what you should be prepared to be tested on and what to expect in terms of the number of questions and exam duration. You may find it helpful to take an exam prep course so you’re fully prepared.

How to Become a Real Estate Agent

To become a real estate agent, you’ll need to follow the steps given to you by the state(s) you wish to work in, but in general, they are very similar to becoming a broker.

To become a real estate agent, you will need to:

• Be at least 18 or 19 years old (depending on the state)
  
• Be a legal US resident
  
• Complete your required pre-license education
  
• Pass your state real estate license examination

These are the four broad steps needed to become a real estate agent. Depending on your state, how much education you’ll need to complete varies, but you will need at least some education and you must pass an examination.

How Agents and Brokers Work Together

Both agents and brokers work together all the time because real estate agents are hired through a brokerage firm. Sometimes, a broker will be the initial contact person for a developer who is planning a large commercial development and then that broker will ask one of their agents to actually find the buyers.

Brokers can also serve as mentors for real estate agents, helping them navigate complex financial situations or work through legal details during negotiations.  

Can a Real Estate Agent Work Independently?

Yes, a real estate agent can technically work independently in their day-to-day tasks, but real estate agents must still work under a licensed broker. Real estate agents are hired by a brokerage firm to sell and buy real estate. An agent may not see their managing broker for a few days, but brokers are still responsible for some aspects of the real estate transaction.

Deciding Which Role Is Right For You?

Regardless of which path you choose, as a broker, earning your broker license puts you at the top of your game. If you dream of owning your real estate business, becoming a broker opens that door for you. If you want to move up the ladder at an existing brokerage, you now have the qualifications to do so. Ready to start planning your future as a real estate broker? Choose your state from this list to see how to get started.