Real Estate Agent vs. Real Estate Broker

Note:  This article was originally written before the formation of The Germantown Real Estate Exchange.

One of the main points of confusion for people buying and selling a home is the difference between a real estate agent and a real estate broker.

There’s a greater laundry list of designations, certifications, and groups of letters real estate professionals put by their names (some are meaningful while others are not).

For this article, let’s stay focused on the high-level distinction, which is what’s most important.

Specifically, what is the difference between a real estate agent and a real estate broker?

Real Estate Agents – The Basics

Real estate agents are licensed salespersons but they are not real estate brokers.

A real estate agent must work for a real estate broker and cannot work completely independently.

While real estate brokers are technically responsible for their real estate agents’ actions, many agents rarely, if ever, see their brokers.

Requirements for a real estate salesperson license vary from state to state.

Real Estate Brokers – The Basics

A real estate broker is a step above a real estate agent.

A real estate broker generally has more education than an agent, but not always.

While real estate agents have to work for real estate brokers, a broker can run her own business and answers to no one.

There is also the distinction of “associate broker.”

An associate broker is someone who has meet the educational and licensing requirements of a broker, but has chosen to work for a broker.

Real Estate Broker vs. Real Estate Agent – The Implications

What does this mean for you in real-life terms?

When you buy or sell a piece of real estate with a real estate agent, it is technically the real estate broker that is representing you, not the agent.

The agent is a “salesperson” for the brokerage, even if you never see the broker him or herself – and even if the agent is a 30-year veteran who knows everything in the book there is to know about real estate.

So….let’s use The Detweiler Group at RE/MAX Town Center to completely illustrate the point.

Here are the three elements…

RE/MAX

RE/MAX is the national brand of brokerages.

It sells franchising rights to local offices.

RE/MAX Town Center

RE/MAX Town Center is the local brokerage.

The Detweiler Group

The Detweiler Group is a team of agents that associates with RE/MAX Town Center.

If we help you buy, sell, or rent a property, it is technically RE/MAX Town Center that is representing you in the transaction.

Why important for you to know?

I’m not sure that it is for most people.

It is good to keep in mind, however, to better understand all of the stakeholders in an actual transaction (especially since they all get a cut of the commissions).

Keep in mind that each national and local brokerage brand also tends to have certain connotations and business models associated with it.