BEHIND THE SCENE
In real estate, you hear the words “broker” and “agent”, but do you really know what the differences are in terms of education, income, and responsibilities? For starters, a real estate broker is someone who is licensed to own their own real estate firm. They can manage other agents and collect fees, and service their own clients. A real estate agent is a person licensed to sell property in their state. Note an agent can’t work on their own, they must work under a licensed broker. There are benefits to being both.
Let’s start with brokers first. Brokers have more licensing requirements. They must pass classes and exams to not only acquire their state’s real estate license, but they must earn their state’s broker license as well. The actual class requirements vary from state to state, but generally a broker’s license requires many more hours of experience and schooling. However, in return the broker has more freedom, flexibility and possibilities to earn more money.
When you become a broker you don’t have to split your commission. Therefore you automatically earn more income than an agent.
In addition to collecting commissions from buyers and sellers they represent, broker’s also collect fees and commission splits from other agents in their brokerage. Plus brokers can earn secondary income from ownership in businesses like title companies and/or mortgage companies.
All this adds up to a significant amount. Possibly twice as much or more than agents who In comparison only earn commissions from representing buyers, sellers and representing rental clients. Then, of course, the agent must give their broker a split of these earnings.
Obviously being a broker has its advantages economically, but it also carries a lot of responsibility.
A broker must provide the agents in his brokerage with support, guidance, education, and the resources to their job. This adds up. Especially when you consider rent, utilities, and insurance for the brokerage.
An agent on the other hand needs to only pay a desk fee and reinvest back in their own lead generation.
So this is a very quick look at the differences between a real estate broker and an agent. At first glance it might seem like it would make sense for an agent to aspire to being a broker, but maybe not depending upon the individual’s career goals.
I hope I’ve given you something to think about whether you are thinking about a career in real estate or if you already have your real estate license.
There are so many possibilities for generating income in the real estate. For example, I didn’t even venture into these areas. Both brokers and agents can make income from Construction Development Consultation, Third-Party Price Analysis, Real Estate Investment, and Property Management.
If you’d like to know more, call me, Suzanne Athey at 469-916-1222, or email me at suzanne@teamathey.com. I’d love to visit with you and answer all your real estate questions.
