Real Estate Agent vs. Broker (What Is the Difference?)
By Indeed Editorial Team
Updated November 5, 2022
Published November 15, 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Real estate agencies and real estate brokerages are popular paths for those interested in a career in real estate. While many people and professionals use these words interchangeably, they are two very different career paths. Understanding the distinctions between a real estate agent and a broker can help you decide on your preferred job field. In this article, we answer "real estate agent vs. broker, what is the difference?", explore the types of real estate agents and brokers, outline the benefits of being a real estate agent, and highlight the benefits of being a broker.
Real estate agent vs. broker, what is the difference?
You may be wondering, "real estate agent vs. broker what is the difference?" Here are some attributes that differentiate both roles:
The major difference between brokers and agents is work independence. A broker has the qualifications to own or manage a brokerage. They have the license to manage real estate and employ real estate agents to sell houses. In contrast, real estate agents can't operate independently. For them to sell houses, they must work under a broker.
Training and experience
Brokers complete more rigorous training because they have more responsibilities than agents. The requirements vary according to the province, but all provinces require brokers to take additional training. Some provinces also require brokers to have certain years of experience or a relevant degree. In contrast, agents only require a licensing course and some insurance to start their careers.
As brokers can work for themselves, they usually experience greater work freedom than agents. For example, a broker can structure their schedule to their preference and determine their work hours. They can also choose to start their brokerage and employ agents to work for them. Similarly, they can work in real estate management. In contrast, an agent has limited work options, and can't work independently or start their real estate firm.
Brokers typically earn more than real estate agents, as they own real estate firms. They often collect a percentage of each agent's commission, in addition to other fees. When brokers arrange their deals, they don't remit the amount to the firm. Agents also earn good pay but less than brokers. Usually, they split their commission with their broker and other agents that participated in the deal.
Types of real estate agents
Here are some of the types of real estate agents:
Listing or selling agent
A selling real estate agent represents people who want to sell their real estate. This can be the owner of the property or a current occupant planning to move to another building. The selling agent handles all processes on behalf of the property seller and interacts with potential buyers and their agents. Some other responsibilities of the selling agent include:
Research various market prices to determine a reasonable asking price for the property.
Put the home up for sale on available listing services and other advertisement channels.
Meet with potential buyers and their agents to give them the seller's offer and negotiate a deal.
Schedule periods to show the property to potential buyers and convince them to make a purchase.
Assist the property seller with preparing, sorting, and processing all relevant documents relating to the property.
Buying or buyer's agent
As the name implies, the buyer's agent assists people who want to purchase real estate. For example, they may act on behalf of an investor who wants to add to their portfolio or an individual looking for where to live. The buyer's agent assists the property buyer with all processes involved in locating, assessing, and purchasing a new property. They're primarily responsible for interacting with potential sellers and their agents. Here are some of the responsibilities of a buying agent:
Hold consultation sessions with investors or buyers to understand what they're looking for in a property.
Review listing services and contact selling agents to get information on the best deals relevant to their clients.
Provide professional advice on different methods of financing the purchase, including loans from local financial institutions.
Prepare all relevant paperwork relating to the property's purchase, including the sales agreement and the purchase offer.
Assessing disclosure statements to help buyers understand potential risks that come with the property.
Dealing with other miscellaneous events that may arise in the course of purchasing the property.
Dual agents represent both the buyer and seller of a property, as their name implies. Dual agency is legal in most Canadian provinces, except for British Columbia, where it's only permissible for underserved areas. A dual agency can also occur when two agents from the same firm represent the buyer and seller of the property. Dual agents may perform both the responsibilities of the buying and selling agent, depending on their arrangement. In other provinces where dual agency is legal, provincial authorities often implement various rules to regulate it.
Transaction agents help facilitate real estate deals between a buyer and seller while maintaining a neutral position. These agents don't represent either party's interest but conduct the deal following all relevant laws and career ethics. Transaction agents are generally preferable to dual agents, as they don't have any conflict of interest. Some provinces don't recognize the operation of transaction agents, so check with the relevant authorities to know their position. A transaction agent can perform any of the roles of a selling or buying agent, depending on the parties needs.
Types of brokers
Here's a brief overview of the different types of brokers:
Associate brokers are professionals who have obtained their broker licences but choose to work under another broker. Usually, associate brokers work as agents themselves, so they don't supervise others. These brokers can work independently if they choose, and they can decide to establish their brokerage.
A managing broker is the manager of a brokerage. They're responsible for coordinating and supervising the daily activities of the real estate firm. Like actual managers, they're responsible for recruitment, internal policies, schedules, and employee coordination. A large real estate firm with multiple branches may have a managing broker in each branch.
Designated or principal broker
A designated broker ensures all the activities of a real estate firm comply with relevant federal and provincial laws. Also known as broker-owners, the designated broker bears all legal responsibility for the actions of their agents. Each real estate firm usually has one designated broker. The designated broker is the highest-ranking officer in a real estate firm, and they often collect a percentage of each agent's commission.
Benefits of being a real estate agent vs. broker
Here are some of the reasons to opt for being a real estate agent:
Real estate agents generally require less coursework, training, and experience to start their careers. Most provinces require agents to complete a licensing exam and an articling period and pay for insurance. This makes this path preferable for those who want to start quickly.
Limited financial liability
Agents can't work independently or run their real estate firms. As a result, they don't incur any liability for the actions of other agents. This means agents hardly worry about the actions of other agents.
The role of an agent is to represent their client's interests in a real estate transaction. Their duties typically involve market research, consultation, and negotiations. They rarely interfere in administrative or managerial tasks at their firm, allowing them to enjoy fewer responsibilities.
Benefits of being a broker vs a real estate agent
Here are some reasons you can opt for a career as a real estate broker over one as an agent:
A broker who has the relevant licenses can open a brokerage or real estate firm. With that, the broker can choose to work independently or employ other agents and brokers to work under them in return for a fee or a commission split. Brokers generally have more control over their work schedules. This can help maintain a healthy work-life balance.
As brokers can establish their firms, they can employ multiple agents and charge a commission percentage. Alternatively, the broker can charge desk fees instead of taking a percentage of the agent's commission. Either way, the multiple streams of income mean brokers can earn much more than agents.
Earn better commissions
As a broker, you possess more industry experience than a real estate agent. You can maximize this and seek employment in a real estate firm as an associate broker. You can then leverage your license and exposure to demand a better commission split, even while performing the same duties as an agent.
Related: How Do Commissions Work?
More career options
As a licensed broker, you can easily transition into a career in property management. This involves acting as a liaison between a landlord and their tenants. Your duties may involve collecting rent, maintaining the property, and issuing tenancy agreements. This can be a great way to diversify your resume and earn more money.
More industry authority
As brokers undergo more rigorous training and licensing requirements, customers tend to trust them more. Also, brokers tend to have more industry experience, which can give them valuable real estate insights. As a result, they often possess more industry authority when relating with clients.
Now that you understand the distinctions between a real estate agent vs a broker and what the difference is, you can decide on your preferred job field.
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