Plan on buying or selling a house? You will probably work with a licensed real estate agent, broker, or realtor. These real estate professionals can help you buy, sell, or rent a home. People often use the terms interchangeably, but they are not the same. They are all different, especially in their qualifications and where they stand on the career ladder.
Simply Said
A licensed real estate agent helps people buy and sell homes. They get paid a commission on every deal. Either the buyer or the seller can have the agent work for them.
A real estate broker does the same work as an agent. However, he has the right to work on his own and can hire agents. Brokers are paid on commission, but they also get a cut of the commissions of the agents who work for them.
A realtor is a National Association of Realtors (NAR) member and may, among other things, be an agent or a broker.
Key Takeaways
Licensed real estate agents help people buy, sell, and rent homes. They must work for a broker or firm that sponsors them such as Kainaat Realtors.
Brokers are real estate agents who have taken more classes and gotten more licenses. They can work themselves or hire other real estate agents for help.
A Realtor is a Real Estate Professional Association member. He is a licensed real estate agent, broker, or another real estate professional. The association has a strict code of ethics that members must follow.
Licensed Real Estate Agents
Licensed real estate agents can help people buy, sell, or rent a property. They get a commission. It is usually a certain amount of the property’s sale price for bringing buyers and sellers together. You can also call them real estate associates or real estate salespeople.
Each state sets its rules for how to become a real estate agent. Most of the time, though, real estate agents must:
- At least 18 years old
- Finish the pre-licensing class that their state requires.
- Take the state real estate license test and pass it.
- Be backed by a licensed real estate broker.
What does a Licensed Real Estate Agent Do?
Real estate agents set up deals between buyers, sellers, landlords, and renters. Agents are responsible for getting offers, counteroffers, and any questions between the parties. When an offer is accepted, an agent will work with another agent to walk clients through the paperwork process. They also ensure that their clients know everything needed to finish the sale, such as home inspections, moving, and important dates like the closing.
Types of Licensed Real Estate Agents
Listing Agents
Listing agents are the ones who work for sellers. These agents help set listing prices and suggest improvements to increase home values (and chances of selling). Moreover, they help stage the home to market it through the local listing service and other channels. They also negotiate sales prices, closing costs, and fees. Moreover, they help prepare, send, and file documents.
Buyer’s Agent
Buyer’s agents are the people who help people buy things. These agents help buyers find homes that meet their needs and fit within their budget. They also help set up home appraisals and inspections. Like listing agents, buyer’s agents negotiate terms and help prepare, submit, and file the necessary paperwork.
Dual Agency
A dual agency is when an agent works for the seller and the buyer. It usually does not happen for the same transaction because it can lead to a conflict of interest.
How do Licensed Real Estate Agents Get Paid?
Licensed real estate agents usually work for brokers or agencies and get paid by commission. It means they get a commission based on the price of the property. The higher the price, the higher the commission.
Sometimes, we can negotiate the commission. However, it is usually between 5% and 6% of the purchase price. The real estate agent does not get the whole commission, though. Instead, the agent for the buyer, the agent for the seller, and the firms where they work split the commission. So, a house sells for $200,000. The commission is 6%. It is an example of a typical split:
- Listing agent: 1.5% ($3,000)
- Listing agent’s broker: 1.5% ($3,000)
- Buyer’s agent’s broker: 1.5% ($3,000)
Real Estate Brokers
Brokers are different from real estate agents because they can work themselves, start their own businesses, and hire other real estate agents.
What do Real Estate Brokers do?
Brokers also do most of the things that agents do. When working with buyers, brokers usually look for properties that meet the criteria set by their clients. They also negotiate, write up offers, and help buyers with any other problems before the closing date. On the other hand, seller’s brokers find their clients’ homes worth on the market, list and show them, talk to the sellers about offers, and help with the offer process.
Types of Real Estate Brokers
There are three main types of real estate brokers, each with a different level of responsibility:
Associate Brokers
Associate brokers have licenses to be brokers. However, they choose to work for someone else. Most of the time, associate brokers do not have control over other agents.
Managing Brokers
Managing brokers are in charge of transactions and running the day-to-day business of the office. They also hire agents, train new hires, and manage the administrative staff.
Designated Brokers
Principal/designated brokers focus on real estate agents to ensure they follow state and federal laws. One broker is in charge of each real estate office.
How do Real Estate Brokers Get Paid?
Brokers make money by taking a cut of the commissions that the licensed real estate agents who work for them earn. They also get commissions from their own deals, but unlike real estate agents, they don’t have to split those commissions with “the office.”
Realtors
Realtors are real estate agents who belong to the Association of Realtors. People often confuse the term “Realtor” with “real estate agent,” but the title can be used for a wide range of jobs in the real estate industry, such as:
- Brokers of both residential and commercial real estate
- Salespeople
- Managers of properties
- Appraisers
How to Get into Real Estate?
Four things are essential for a person to become a Realtor:
- Have a real estate license that is valid and in use
- Be active in the business of real estate
- Not having a record of official punishments for actions that are not professional.
- Not be going through or have recently gone through bankruptcy.
Realtors promise to be open and honest and to look out for their client’s best interests in all transactions. Kainaat Realtors is the best example. It is part of our code of ethics at Kainaat Realtors.
Is it better to work with a licensed real estate agent or broker?
The difference won’t mean much to the person buying or selling a home. A broker who works independently can access more properties listed by different agencies. Kainaat Realtors offers a bit more flexibility with their fees because they do not have to give an agency a cut.
How are a buyer’s agent and a seller’s agent different?
Simply put, a buyer’s agent helps to buy a home. A buyer’s agent can find homes for sale through other agencies or their own. A seller’s agent, also called a listing agent, puts a property on the market and tries to sell it. The seller’s agent works for the seller and may stage the home, hold open houses, or put information about the home on the Internet. When a house sells, the seller usually pays a commission to both the buyer’s and seller’s agents (with their cuts potentially split with their respective agencies).
Can a licensed real estate agent help you find a place to rent?
Yes. Licensed real estate agents and brokers at Kainaat Realtors do more than help people buy and sell homes. They also help list rental properties and find good tenants. The fee is equal to one or two months’ rent.
Final Thoughts
By now, you know the difference between a licensed real estate agent, a realtor, and a broker. The real estate business is strong. Whether you decide to work with a licensed real estate agent or broker or buy a house on your own, Kainaat Realtors can help.
Licensed real estate agents at Kainaat Realtors can help you get started with real estate investing in today’s market. Whether you are a new investor or have done a few deals before, we can help you make the most of the opportunities in real estate right now.
