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

When you’re starting a career in the real estate business, one of the first things you’ll hear is the terms broker, real estate agent, and realtor, which are often used interchangeably. If you’re like most people, you might wonder:  Are they the same thing? What’s the difference? 

While brokers and agents work closely together, they have different roles, responsibilities, and requirements, and both of those roles, among others, real estate professionals, can become realtors. Let’s break it down in plain, simple terms.

What is a real estate agent?

When you imagine someone helping you buy or sell a house, you probably think of these first. Real estate agents are licensed professionals who assist people with property transactions—whether it’s buying, selling, or leasing homes, condos, or commercial spaces.

To become a real estate agent, you’ll need to complete a pre-licensing course (it’s a bit of schoolwork but totally worth it) and pass your state’s licensing exam. Once you’re licensed, you’ll work under a real estate broker—think of them as your boss or supervisor. You’ll split your commission with the broker, who supports you in return with tools, guidance, and resources.

Agents help clients list homes for sale, show properties to buyers, negotiate deals, and ensure all the paperwork is in order for closing. It’s a busy job, but it can be incredibly rewarding.

The requirements for becoming a licensed real estate agent vary by state (there’s no federal license). Real estate agents generally must:

• Be at least 18 years old
• Be a legal resident of the U.S.
• Complete their state’s required pre-licensing class
• Take and pass the state real estate license exam
• Complete a background check
• Be sponsored by a licensed real estate broker
• Complete the continuing education classes required to maintain the license

Quick Recap about real estate agent:

• Training: You must complete pre-licensing education and pass an exam.
• What You Do: Help clients buy, sell, or lease properties.
• Where You Work: Always under a broker who helps you out with resources.
• How You Get Paid: Typically, you will earn a commission on transactions. (Some agents might work on a flat-fee model rather than a commission-based model)

What is a real estate broker?

Now, let’s talk about real estate brokers. They’ve gone through extra schooling, passed a tougher exam, and have more experience under their belts. One key thing to note is that you must first work as a licensed real estate agent for a few years to become a broker. The number of years required depends on the state where you practice, but this experience is crucial for stepping up to the broker level.

As a result, they have more flexibility in their work arrangements. Brokers don’t need to work under anyone else. They can start their own real estate firms, hire agents, and even manage the entire operation themselves. But not all brokers go independent. Some stick with a firm but take on more leadership roles, like managing teams of agents.

Here’s where it can get a bit confusing: there are actually different types of brokers:

1. Associate Brokers: These ones have a broker’s license but still work under another broker, doing a lot of the same tasks as agents.
2. Managing Brokers: They manage offices, keep things running smoothly, and ensure agents follow all the legal rules. They focus more on business operations rather than helping clients buy or sell homes.
3. Principal Brokers: These are the heads of the brokerage. They’re legally responsible for everything that happens within their firm, making sure everyone plays by the book.

Because real estate brokers have more responsibilities (and often manage other agents), they typically earn more money. Some brokers take a cut of their agents’ commissions, while others work independently and pocket the entire commission.

Quick Recap:

• Training: Requires more education and passing a stricter exam than agents, plus years of experience as an agent first.
• What You Do: You can work independently, manage agents, or run your own firm.
• Where You Work: Either run your own show or manage an office of agents.
• How You Get Paid: Earn commissions—either on your own or from agents you manage.

What is a realtor? Holding the highest standard

A realtor is a real estate professional who is a member of the National Association of Realtors (NAR). NAR is the largest trade group in the United States. While people often use the term “realtor” interchangeably with real estate agents, the designation isn’t limited to just agents—it includes a variety of roles within the real estate industry.

Here are some of the professions that can hold the title of realtor:

• Residential and commercial real estate brokers
• Salespeople
• Property managers
• Appraisers

What sets realtors apart is their commitment to the NAR’s strict Code of Ethics, which requires them to act with transparency, honesty, and integrity in every transaction, always putting their clients’ best interests first. Anyone who is part of NAR is licensed to use the Realtor trademark as part of their name. It cannot, however, be used as a designation of the professional’s license status.

Which real estate broker or agent is right for you?

So, which path should you choose: broker or agent? It depends on your goals. Both roles are crucial in the real estate industry, and both can be incredibly rewarding.

If you like working directly with clients, helping them buy or sell homes, and you’re happy working under a broker, then becoming an agent could be the perfect fit for you. It’s flexible, fast-paced, and rewarding, especially if you enjoy being on the front lines of real estate.

If you’re looking to take on more responsibility, maybe even start your own firm someday, and manage other agents, then going the broker route might be more up your alley. Yes, it requires more schooling and even experience as an agent, but the freedom and potential for higher earnings could make it worth it.

For those who want to advance their professionalism, becoming a realtor can provide additional resources, networking opportunities, and a higher standard of practice. 

Real Estate Broker vs Agent Salary: What’s the Pay Like?

Of course, one of the biggest questions when comparing real estate broker vs agent is how much you’re going to make. It’s no secret that real estate income varies—your location, experience, and how many deals you close, they all play a role in the final paycheck.

On average, real estate agents earn approximately $58,123 per year. But that can change a lot, depending on your hustle and where you work. Bigger cities with higher-priced homes mean bigger commissions.

Brokers tend to earn more because they can manage other agents and take a share of their commissions. On average, brokers earn around $77,156 annually, with the potential for much more if they own their firm or work in a high-end market.

Realtors, depending on whether they are agents or brokers, earn similar figures but benefit from additional networking opportunities, educational resources, and a reputation for higher ethical standards, which can help them attract more clients and close more deals.

Beyond real estate agent vs broker: Other real estate career options

While an agent or broker in real estate might be the most well-known path, the real estate world is vast, and there are many other career opportunities to explore. Here are a few:

• Property Manager: Keeps rental properties running smoothly for both landlords and tenants.
• Real Estate Appraiser: Helps determine property values, usually for mortgages.
• Title Agent: Manages the transfer of property ownership and ensures legal compliance.
• Real Estate Developer: Buys land and builds everything from homes to commercial spaces.
• Mortgage Broker: Helps buyers secure loans to purchase homes, working closely with real estate agents.

Summing-up

So, when it comes to broker vs real estate agent vs realtor, the choice is yours. Each role offers incredible opportunities in real estate, whether you’re helping clients close deals or running a successful firm. The path you take depends on your personal goals, whether you prefer to focus on client interactions or grow into a leadership role.

And if you’re getting ready to take the next step in your real estate career after completing your state’s mandatory course, remember that Lexawise is here to help. With top-notch exam prep tools, you can confidently tackle your real estate licensing exam and start your journey on the right foot. Whether you aim to be an agent or go the next level up as a broker, Lexawise has everything you need to succeed.

Ready to dive in? Sign up for Lexawise Real Estate Exam Prep today and set yourself up for success in real estate.