Real Estate Broker vs Realtor: What's the Difference?

By 

Jamie Ayers

Updated 

June 28th, 2019

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If you’re like many people, you think little about the difference between a broker and a realtor. You may assume they are different words for the same thing. However, that’s not the case. We’ll help you understand what a broker does, what an agent does, and who is best for your transaction.

Updated June 28th, 2019

As a buyer or seller, you may not have thought much about the difference between a real estate broker versus a realtor. After all, all the people who help you buy or sell a home are basically the same, right?

Not quite. In the United States, a broker and a realtor are different real estate professionals, and each has different levels of experience. Understanding the difference will help you decide who to work with. If there are concerns with your transaction, you’ll also understand how your issue moves “up the chain of command.”

No matter which professional is best to sell your home, you’ll want to work with someone in the Clever Partner Network to save money and ensure you’re in the hands of the best in your market.

Here’s what you need to know about the difference between a broker and a realtor.

What Does a Broker Do?

A broker is a realtor who has additional experience and education. They generally have years of experience as an agent. Brokers have taken coursework, a broker exam, and received a broker’s license, which is a higher level of licensure.

They understand the real estate business and industry at a higher level than most agents. Sometimes a broker manages other realtors and doesn’t work directly with clients.

Other times, someone with a broker license works with clients, and may or may not be a better choice than regular sales agents. Here are the broker types you might encounter:

Principal Broker

If you’ve ever wondered how you can have confidence that your real estate salesperson or buyer’s agent is handling everything correctly and according to the variety of laws involved, you can thank the principal broker.

Each real estate brokerage has a principal broker that oversees all licensed agents in the firm and reviews all real estate contracts. They are also the person who helps resolve transaction disputes between home buyers and sellers, like disagreements about closing dates or inspections.

A principal broker may own that branch of the brand’s office, making both a salary and a cut of the commission of each agent they supervise. However, principal brokers rarely work with individual clients.

Managing Broker

The managing broker oversees the daily operations of the real estate firm and hires real estate agents. They are also in charge of training new realtors and overseeing administrative staff.

In some smaller offices, the principal broker may fill this role, but in a larger office, the managing broker is often a separate person. Managing brokers sometimes work with individual clients on transactions.

Associate Broker

Most new brokers start out as an associate broker once they receive a broker’s license, so they can learn the ropes from more experienced staff. A broker associate works under the managing broker and rarely supervises other agents.

An associate broker is also called a broker-salesperson, because they work as a broker and as a realtor. As a result, they may work with real estate sales or help buyers with their real estate transactions.

What is a Realtor?

A real estate agent or realtor is a professional who specializes in working with individuals buying or selling a home. They’ve taken training classes and passed a licensing exam to receive a real estate license. Agents work on commission with no other salary, in most cases.

Not all realtors ever become a broker. Many of them spend many years serving buyers and being listing agents in their area without wanting to manage their own firm. So working with a realtor doesn’t mean you’re getting less expertise.

In fact, working with an experienced realtor may be better than working with a broker because the realtor has been in the market every day, working with clients, and a broker spends more time in the office.

If you notice someone using the title REALTOR®, it means they are a member of the National Association of REALTORS® (NAR), the largest trade association for real estate agents. A member of NAR has to follow a specific code of ethics. Most real estate agents are NAR members, and the group promotes a higher standard in the way agents work. A REALTOR® can be an agent or a broker.

Who Should You Work With?

Now that you understand the difference between a licensed real estate agent and a broker, who should you look for to be your buyer’s agent or listing agent?

An experienced realtor with local experience is the best decision in most cases. A broker could be an option if you have a more complex transaction, including land or commercial plats.

If you need help finding the right professional, contact Clever for more help. A Clever Partner Agent can help you save money on your sale or get cash back on closing on a purchase.

Our Partner Agents are full-service buyer’s agents and seller’s agents with years of experience that serve your local area. They understand the market, have done many comparative analyses, and know how to market homes. They have a long track record of helping buyers and sellers get the real estate results they’re looking for.

Whether you’re looking to buy your dream home or it’s time to sell your property, you can’t go wrong with an experienced Clever Partner Agent. Fill out the online form for more information. A Clever representative will contact you and answer all your questions. From there, we’ll set up a no-obligation consultation with an agent who fits your needs.

FAQs for Real Estate Broker vs Realtor

Do Brokers Make More Than Real Estate Agents?

Most brokers make more money than a typical buyer’s or seller’s agent. This is because they run the real estate office and many times get a cut of the commission the realtors make. They may also get a salary for their work.

Why Does a Realtor Need a Broker?

A realtor legally may not work independently. A broker oversees a realtor’s actions and is responsible for the agent’s activities. If a realtor wants to work on their own, they can spend a few years as an agent and then study to get their own broker license. As a broker, they can work for themselves.

Do You Have to Be a Real Estate Agent Before You Can Be a Broker?

Most states require someone to be a real estate agent for one to three years before they can study for and apply for a broker license. They also continue to work as an agent during the weeks or months it takes to complete the licensing classes and take the broker exam.

Can I Be My Own Realtor?

Some people buy or sell a home on their own. However, without the professional help of an agent, they rarely get the deal they are looking for. A For Sale By Owner (FSBO) will attract buyers who will low-ball, and you aren’t likely to have the negotiation skills to get the deal you deserve. If you buy on your own, a listing agent can take advantage of you and you may pay far more than you needed to.

Does a Home Buyer Pay Realtor Fees?

Realtor commissions for both the buyer and the seller come out of the proceeds of the sale, so they are paid by the seller. However, some sellers build the extra commission into the price of the home, so in a way, the buyer takes part in paying the realtor fees.

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