What’s The Difference Between A Broker and an Agent?
A lot of home buyers and sellers don’t know the differences between a real estate broker and a real estate agent and the differences are pretty significant and can have a pretty big impact on how that agent or broker represents you during the transaction so I wanted to take a few minutes today to explain to you what those differences are.
Brokers have additional educational requirements and testing.
The first reason is that there are a lot of experience and educational requirements that brokers must have that real estate agents do not have to have. For instance, a real estate broker has to have at least 3 years of experience as a real estate agent before they can qualify and become a real estate broker. They also have to take hundreds of hours of more education and seminars and they have to go through a lot more testing than a regular real estate agent does. So because of that, there aren’t as many agents that can qualify to even earn their broker’s designation let alone as many agents actually go through the process of taking those educational requirements or document their experience.
Whenever you are working with an agent, you are actually being represented by that agent’s broker, even if you don’t realize it.
The most important difference between a real estate broker and a real estate agent is that you’re always actually being represented by the real estate broker whether you realize it or not. In Maryland, the real estate broker is basically the administrator or supervisor of the real estate agents that work under him. There is no such thing as an independent real estate agent in Maryland. All agents have to be licensed underneath the real estate broker. The broker’s basically that agent’s manager, who will make sure that they’re doing all their paperwork properly, make sure their transactions are being handled smoothly and that kind of thing. But that real estate agent is always working under the real estate broker. So when you’re working with one of those larger brokerages, there maybe a 150 or 200 agents in that office but you may never even meet your actual real estate broker because there are so many agents in that office that the broker doesn’t have time to meet with each client individually. It may not seem like a big deal unless something goes wrong with your transaction. If there becomes another issue with the other brokerage, it’s your broker that’s going to be negotiating any kind of resolution with the other brokerage. So if you’ve never even met your broker and your broker has 200 agents working underneath of him, he may not be that familiar with your specific situation and may not be able to represent your best interest as fully as if you were working with a smaller brokerage.
Brokers are less likely to be part-time real estate professionals than real estate agents are
When you’re working with a real estate broker, it’s a lot less likely that you’re going to be working with a part-time broker as opposed to a lot of part-time real estate agents. Because of all the differences in the educational requirements, additional insurances required, additional seminars that you have to go to, testing, all these different things that brokers have to go through to get their broker’s designation. There just aren’t as many real estate brokers that are part-time as there are real estate agents that are part-time and the problem with the part-time real estate agent is they typically will have a full time job that they’re doing during the week and they’re only dedicating partial hours to the real estate part of their career. And so, the issue with that is they typically aren’t taking as many educational hours without having constant experience going on. They aren’t learning as much about the industry. They aren’t able to adapt or handle issues that come up as frequently because they just don’t have the experience that full-time agent would have. And the other thing, just from a practical standpoint, is they may not be available for you if you need to see a specific home before it goes off the market or if you need to meet for home inspections or you want to sit down with your lender and that kind of thing. An agent that’s a part-time agent may not have those hours available because they’re working their full time job during the day.
If you decide to use a real estate agent, make sure to meet that agent’s broker.
So now that you know the differences between a real estate agent and a real estate broker, hopefully, you’re able to better determine which one would be the best bet for you. One thing that I always highly recommend is that even if you decide to go with a traditional real estate agent, make sure that you ask to meet their broker and have a sit down, take a couple of minutes, meet with the broker to decide if the broker is somebody that you also want representing you because again, if a situation comes up during a transaction and no matter how much you like your agent, it ‘s actually the broker that will be handling any issues that come up. So, you want to make sure that you’re familiar with the broker and that you’re confident that they’re going to be able to negotiate or fix any kind of problems that might come up during the transaction.