A real estate broker is technically the Broker of Record or Principal Broker of a real estate brokerage. Some companies, including those organized as corporations and Limited Liability Companies (LLCs), can have multiple Brokers of Record, which you can look up in eAccessNY (NYS DOS license database).
Real Estate Agent vs Broker in New York: The Real Difference
Go Back To Previous PageHitting the real estate world means you’ll hear a lot of talk about agents, brokers, lawyers, and other job titles. The agent and broker are the two
most significant roles you’ll have to play in a real estate transaction. Both agents and brokers are there to act on a party’s behalf, but what do they do? How are they different: Real Estate broker vs. agent vs. realtor?
Real estate agents have a license and work for a brokerage firm. Also, a broker has a real estate license and may take other qualifications. Both meet the licensing requirements and respect a real estate code of ethics.
Nevertheless, brokers can work independently, own a real estate brokerage, or be contracted freelancers.
There are many subtle differences between brokers and agents. Knowing which and why you need to work with the right one.
1) What Does A Real Estate Agent Do?
A real estate agent is someone who passed the real estate test, got certified, and is looking to start working on selling homes. Agents help put together offers and show houses, help you negotiate, and facilitate contract negotiations. They’re the ones who drop off offers and also hand you the keys.
The best way to describe them is as people who do “on-the-ground” work. They advertise and network, are active on social media, and hustle all day. There are many types of real estate agents.
A real estate agent is anyone who acts on behalf of a principal in buying, selling, or renting real estate.
This term is broad. It can include Principal Brokers, Licensed Associate Real Estate Brokers, and Licensed Real Estate Salespersons. This means anyone licensed by New York State to work in real estate brokerage.
Licensed Real Estate Salespersons and sometimes Licensed Associate Real Estate Brokers often call themselves this unofficial term.
Who Does A Real Estate Agent Work For?
A real estate firm usually hires a real estate agent. In most cases, agents cannot work alone due to legal rules.
Besides, many agents prefer to work for someone else while studying the real estate market.
2) What Does A Real Estate Broker Do?
Real estate brokers are licensed to perform real estate actions and sometimes even freelance as agents. They can buy or sell a house, pitch to potential buyers or sellers, host an open house, or collect a commission.
However, the term “broker” tends to mean several things. It primarily means that you’re doing the office work. There are three main types of brokers:
- managing brokers
- designated brokers
- and associate brokers
The official NYS DOS titles for Brokers of Record are Corporate Broker, Limited Liability Company Broker, or Individual Broker in eAccessNY, depending on whether the operation is structured as a corporation, an LLC, or a sole proprietorship.
a) Managing Brokers
Managing brokers are the people who manage a real estate brokerage’s daily operations. They also manage compliance, talk to vendors, and work with agency personnel.
If you are looking for a job in a real estate agency, then talking to a managing broker will be the right move. These are the individuals who work on hiring, training, and firing people, and they are also the people who manage recordkeeping and compliance.
b) Designated Brokers
Designated brokers oversee all legal paperwork and compliance issues. They manage all the real estate agents under their wing and ensure that everything complies with state, local, and federal real estate laws.
They are also the people who hold the brokerage license for their firm.
Since so much weighs on the shoulders of designated brokers, they are often paid salaries rather than commissions.
c) Associate Brokers
Associate brokers can act as real estate agents and do their work. However, they do not require the same oversight as a regular agent. This broker category makes their living freelancing or just working for themselves.
2) Should You Hire a Real Estate Agent vs. a Broker?
Don’t decide whether to work with a broker vs. an agent based on the title alone. They both take a license exam and access the same listing services.
Many highly experienced licensed real estate agents do not become Licensed Associated Real Estate Brokers or Principal Brokers of their firms because of their cost and marginal benefit. Many real estate agents are content to focus on doing deals and minimizing costs and have enough reputation and reviews where they do not care about a bump in the title.
Honestly, it won’t make much of a difference in many ways. You’ll still need an agent’s services when selling or buying a home.
If you hire a broker who acts as an agent, then you’re still getting agent services. If you employ an agent, you’re getting those services with the oversight of a broker.
Who Makes More, Agents Or Brokers? Real Estate Agent vs. Broker
Generally speaking, brokers tend to make more. They work with way more agents, all of whom give them a good cut of their commission for the work they do.
Agents will make between $40,000 and $100,000 in their first few years in New York.
Meanwhile, brokers can usually clear between $80,000 and $200,000.
Should You Be An Agent Or A Broker?
It all depends on what you want to do. If you are considering a new career, there are a couple of things you need to know:
- The best brokers spent several years working as agents. This gives them a good handle on the local market and helps them understand their workers’ needs.
- People who want to do a lot of networking and marketing tend to do best as agents. Some people do their best to go out there and sell. When that happens, it’s best to roll with it. Great listing agents can love their jobs and make significant banks.
- Brokers tend to make more money regardless of experience, and it’s just how broker fees are set up.
- However, the stakes are often higher with brokerage work. This is a serious matter. If a broker overlooks something, it can lead to license revocation, lawsuits, or even arrest.
Real Estate Agent vs. Broker: They’re Still There For You
You don’t have to worry too much about the specifics as a buyer or seller. If you hire the right people to help with a home sale or get your next property, you should be OK with how things work.
After all, they’re called professionals for a reason!
Written By: Ossiana Tepfenhart
