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

Andrew Whytock

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Andrew Whytock

August 17th, 2021
Updated August 17th, 2021

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Broker vs. agent | What is a broker? | What is an agent? | FAQs

🔑 Key takeaways:

  • Real estate agents and brokers can each represent home buyers and sellers, but brokers are licensed to operate independently.
  • A broker might have agents who work for them, or they may operate on their own.
  • Agents can't work independently — they need a licensed broker's sponsorship.
  • It's more difficult to become a broker. Broker licensing requirements vary by state, but applicants usually need several years of experience as an agent, plus more real estate education, before they can take their licensing exam.

When you hire someone to represent you during a real estate transaction, you might be working with a real estate agent, a broker, or both.

Agents are only licensed to work directly with clients as they assist in the purchase and sale of real estate. By comparison, brokers can do everything an agent does, but they can also manage agents, prepare contracts, and operate their own real estate brokerage.

In other words, all licensed brokers can act as real estate agents, but not all agents are brokers.

You shouldn't be concerned if your real estate agent doesn't have a broker's license — it's not a requirement. Real estate agents are only required to have a salesperson's license, which entitles them to work directly with clients under the supervision of a broker.

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Real estate agent
Broker
Education
Completion of state-mandated real estate salesperson courses
Completion of state-mandated real estate broker courses
License
Salesperson's license
Broker's license
Experience required
None
About two years as an agent (varies by state)
How they get paid
Commission on each sale (split with broker)
Commission split from agents' sales, or kept for themselves if they also act as an agent. Total annual sales may also determine pay.
Responsibilities
Represent home buyers and sellers, negotiate, and market houses.
Represent home buyers and sellers, manage other agents, conduct real estate transactions, train agents, and prepare contracts.

What is a real estate broker?

📖 Quick definition of a real estate broker

An individual licensed by their state to operate a real estate brokerage and manage the activity of real estate agents.

Real estate brokers can work directly with home buyers and sellers, but their expertise and responsibilities go beyond that.

Day to day, brokers are usually involved in managing a real estate brokerage, so their responsibilities include:

  • Managing the firm's finances
  • Mediating conflicts with other brokerages
  • Preparing contracts
  • Recruiting and training agents

Some responsibilities a broker takes on depend on what type of broker they are and the structure of their brokerage.

» MORE: What is a real estate broker?

✍️ Editor's note

In some states, even real estate agents are called "brokers."

This terminology is used in "broker states": Colorado, Illinois, Indiana, New Mexico, North Carolina, Oregon, South Dakota, Tennessee, and Washington.

Types of brokers

  • An associate broker is a newly licensed broker who fills the role of a typical real estate agent, but with additional management responsibilities in the brokerage.
  • The designated broker usually owns the brokerage, and acts as the lead administrator. Other names for the designated broker include the principal broker, the broker in charge, or the qualifying broker.
  • A managing broker runs day-to-day operations of the brokerage and may work with other managing brokers.

Requirements to become a real estate broker

The requirements to become a licensed real estate broker vary by state, but in general they include:

  • 2+ years of experience as a real estate agent
  • Completion of advanced real estate courses
  • A passing mark on the state's broker licensing exam

What is a real estate agent?

📖 Quick definition of a real estate agent

An individual licensed by their state to represent buyers and sellers in real estate transactions, provided they're sponsored by a real estate broker.

Real estate agents, sometimes called realtors, represent home buyers and home sellers. Agents lead customers through real estate transactions by doing things like:

  • Negotiating
  • Listing homes on the MLS
  • Showing properties
  • Pricing houses

Real estate agents must be licensed by their state's real estate commission, which usually involves taking some courses and passing a salesperson's licensing exam.

What's the difference between a real estate agent and a realtor?

"Real estate agent" and "realtor" are often used interchangeably, but a REALTOR is an agent who is a member of the National Association of Realtors (NAR). Agents aren't required to become NAR members.

Unlike brokers, agents don't need any experience before they take their licensing exam.

Every real estate agent must be "sponsored" by a real estate broker; they aren't allowed to operate independently.

» MORE: What is a real estate agent?

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Types of agents

Many of the several different types of real estate agents don't fit into a single category. For example, an agent might represent home buyers and sellers, not just one or the other.

  • Listing agent: Represents home sellers.
  • Buyer's agent: Represents home buyers.
  • Dual agent: Represents the buyer and the seller in the same transaction. Many states outlaw dual agents, as the practice creates a potential conflict of interest.
  • Designated agent: Represents either the seller or buyer while another agent in the same brokerage represents the other party.
  • Transaction agent: Mediates a transaction between a buyer and a seller but doesn't represent either of them.

Requirements to become a real estate agent

State requirements for a real estate salesperson's license vary, but in general they include:

  • Being at least 18 years of age
  • Legal U.S. residency
  • Completing basic real estate courses
  • A passing mark on state real estate licensing exam
  • Sponsorship of a licensed broker

FAQs

What is a real estate brokerage?

A real estate brokerage is a firm operated by one or more licensed real estate brokers. Brokerages hire, train, and manage real estate agents, who split their commission with the brokerage.

Is a REALTOR a broker?

A REALTOR is a real estate agent who is a member of the National Association of Realtors. Some REALTORS might also be licensed real estate brokers, but it's not a requirement.

What is a real estate associate?

Real estate associate and real estate sales associate are just different names for a real estate agent. Real estate associates are licensed by their state's real estate association to assist customers with real estate sales.

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