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Author: Justin Nabity

Last updated: January 21, 2025

Real Estate

Real Estate Broker vs Agent: What’s the Difference?

A real estate broker and an agent are two terms people often use interchangeably. Despite this, they are not the same.

So, what’s the real difference between a real estate broker vs agent?

The short answer is that every real estate broker is also a real estate agent, but not the other way around.

The long answer? We have a full guide to break it down for you.

Key Takeaways

  • Real estate brokers are agents with advanced training and independent work abilities.
  • Agents must work under brokers, who may own firms or supervise agents.
  • Brokers handle complex transactions, while agents suit standard property deals.
  • Higher broker fees reflect their expertise and broader income streams.

What’s a Real Estate Agent?

A real estate agent, or a real estate salesperson, is a licensed professional who acts as a liaison between buyers and sellers in the real estate business. They often work for brokerage firms under the supervision of brokers.

Real estate agents must be supervised by real estate brokers. There’s no legal way for them to work independently.

Requirements of Becoming a Real Estate Agent

Most states require the completion of specific coursework related to real estate principles. Some states require special courses, while others operate on a credit-hour basis.

For example, candidates in California must complete three college-level courses:

  • Real estate principles.
  • Real estate practice.
  • An additional course from a specified list (e.g., Real estate finance, property management).

On the other hand, Texan candidates must complete 180 hours of qualifying education, which includes courses like:

  • Principles of real estate I & II.
  • Real estate finance.
  • Law of agency.

Once the education is sorted out, it becomes a matter of passing the state-administered exam to obtain the real estate license, applying for the role, and submitting a background check.

What’s a Real Estate Broker?

A real estate broker is an agent who has completed additional training and passed a broker’s licensing exam. Unlike agents, brokers can work independently or even start their own brokerage firms.

Requirements of Becoming a Real Estate Broker

Since the broker is essentially an agent too, they are subject to all the basic requirements of becoming an agent that we mentioned earlier. However, they must also have several years of experience as agents before they can obtain their broker’s license.

Additionally, they must complete advanced coursework that covers topics beyond what’s required for agents, including but not limited to:

  • Real estate law: This involves understanding legal principles, contracts, and regulations governing real estate transactions.
  • Brokerage management: Management involves learning about managing a brokerage, including hiring agents, overseeing operations, and ensuring compliance with laws.
  • Finance and investment: This boils down to gaining knowledge about real estate financing options, investment strategies, and market analysis.
  • Ethics and professional conduct: This is to emphasize ethical practices and professional standards within the industry.

Becoming a broker often requires finishing credit hours as well. Let’s use the same examples of California and Texas, as before.

  • In California, candidates must complete eight college-level courses totaling 45 hours each.
  • In Texas, candidates must complete an additional 270 hours of qualifying education.

Once all of that is finished, the process is more or less the same: applying and passing the examination.

The table below sums up the whole thing:

FeatureReal Estate AgentReal Estate Broker
DefinitionLicensed professional who acts as an intermediary between buyers and sellersExperienced agent who has completed further training and passed a broker’s exam
SupervisionMust be supervised by a brokerCan work independently or start their own brokerage
Education RequirementsState-specific coursework (e.g., real estate principles, practice)Meets all agent requirements + advanced coursework (e.g., real estate law, brokerage management, finance)
ExperienceNo specific experience requiredTypically requires several years of experience as an agent
Licensing ExamMust pass state-administered licensing examMust pass both agent and broker licensing exams

Do You Need a Real Estate Agent or a Broker?

A real estate agent is typically your best choice when you’re looking to buy or sell residential property in straightforward transactions. They’re ideal for:

  • First-time homebuyers who need guidance through the basic process of purchasing property.
  • Sellers looking to list their primary residence in the local market.
  • Individuals who want to rent real estate in their area.
  • People seeking assistance with standard residential property transactions.

Why hire an agent at all then, when all these services can be provided by the broker, who has more experience? The answer is the cost. Brokers typically require considerably higher fees compared to agents.

However, a higher investment can be worthwhile in complex situations where brokers’ expertise in the real estate industry can prevent costly mistakes or identify better opportunities. They’re often a better choice when:

  • You’re involved in commercial real estate transactions that require extensive market analysis and legal understanding.
  • You’re managing multiple properties or need simultaneous oversight of several real estate transactions.
  • You’re looking to invest in properties that require sophisticated financial strategies.
  • You need someone who can coordinate with other real estate agents and manage complex negotiations.

How Much Do Real Estate Agents and Brokers Charge?

We need to break the costs down to make them clear. Let’s begin with agents.

Real Estate Agents Payments

Real estate agents operate on a commission-based revenue structure, typically earning 5–6% of the property’s sale price. However, this commission goes through several splits before the agent receives their final share.

Let’s look at how this works in practice. When a $300,000 home sells with a 6% commission, the total commission is $18,000. This amount is first split between two sides of the transaction:

  • The listing side receives $9,000.
  • The buyer’s side receives $9,000.

Since agents must work under brokers, they have to split their portion with their brokerage. In a typical 60–40% arrangement:

  • The agent keeps $5,400.
  • The brokerage receives $3,600.

More experienced agents often negotiate better splits, sometimes reaching 70–30% or higher in their favor. The exact split depends on factors like the agent’s track record, sales volume, and their brokerage’s business model.

Real Estate Brokers Payments

Brokers have multiple income streams that reflect their advanced position in the industry. They earn money in three primary ways:

Personal Sales

Much like agents, real estate brokers can make their own sales. However, unlike agents, brokers keep a much larger portion of their commissions when they sell properties directly.

Instead of giving up at least 40% to another broker, they might keep 80–100% of their commission share.

Agent Supervision

When overseeing agents, brokers receive:

  • The brokerage’s portions of each agent’s commissions.
  • Additional percentage overrides on their agents’ sales.
  • Monthly desk fees or administrative fees from agents.

Brokerage Ownership

This source of income is only applicable if the broker has their own agency, which isn’t always the case. That being said, if they do own one, they profit from:

  • A portion of all transactions conducted through their firm.
  • Income from additional services like property management.
  • Fees from training programs and administrative services.

As you can see, brokers are often much more financially successful, which is why many successful agents are inspired to eventually become brokers.

For more details, check our guide: How Much Is Real Estate Commission: Negotiations, Seller & Buyer Fees

Frequently Asked Questions

Can a Real Estate Broker Work as an Agent Under Another Broker?

Yes, brokers can choose to work under other brokers while maintaining their broker’s license. This is common, especially when brokers want to focus on sales without managing a brokerage, or when transitioning between roles.

How Often Do Real Estate Agents and Brokers Need to Renew Their Licenses?

Most states require a license renewal every 2–4 years, with mandatory continuing education hours in the process. The renewal requirements are typically more extensive for brokers than agents, reflecting their higher level of responsibility.

What Happens to an Agent’s Active Listings if They Switch Brokerages?

When an agent changes brokerages, their listings legally belong to their original broker. The transition process typically involves negotiation between brokers and may require client approval for transferring listings to the new brokerage.

Are There Any Restrictions on How Many Agents a Broker Can Supervise?

While there’s typically no legal limit, brokers must ensure they can effectively supervise all their agents. Some states require brokers to maintain certain systems and procedures as their agent count grows to ensure proper oversight.

Closing Words

Real estate is a difficult industry to get into, but succeeding in it often means a significant jump in income.

The good news is that, regardless of your profession, you can switch to the real estate market if you can spare the time to secure qualifications and have a good idea of what you’re doing.

This is why Physicians Thrive is here. We’re a team of professional doctors with decades of experience in financial consulting.

We have everything you need for you to thrive as a doctor and can even help you transition to become a real estate professional.

Contact us today, fill us in, and let us do our magic.

Also Read:Transitioning from Medical Practice to Real Estate: Real Estate Professional Requirements

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