by Paul Lines

Created on: December 27, 2010

Although it is not the case in all countries, in the US there is a distinct difference between a real estate broker and a real estate agent. This difference relates to both the level of responsibility and the expertise each have within their respective roles. One commonality that does exist however is that, in both cases the broker and agent need to be licensed by the state before they can operate, which requires passing examinations set by the state regulator.

A real estate broker is the person who owns and is licensed to operate a real estate business and is therefore one who would be committed to a strategy of success for the enterprise. In addition to the state requirements to enable operation in the real estate market, the broker would be expected to have the necessary experience to be able to manage a business of this nature in a competent and professional manner. Therefore, a real estate broker would be expected to know the real estate movement and prospects within their local area and have a reasonable idea of current market trends. Furthermore, the real estate broker is responsible for the selection of, and the activities and conduct of the real estate agents who work for them. To maintain their license real estate brokers have to ensure that, in all dealings with their clients, the business is trustworthy and honest, providing a quality service for a reasonable return. To this end, it is in the broker's interests to ensure that he or she employs the highest calibre of personnel and real estate agents and that these employees are supervised appropriately.

A real estate agent is an individual person employed as an integral part of a broker's sales force. As with a broker, an agent has to undergo formal training and be state licensed. A real estate agent has to work for a broker and therefore cannot set himself or herself up as independent worker within the real estate business. In effect, the agent acts as a negotiator between the seller and the buyer. What has to be remembered however is that normally the agent will be an independent contractor who is working under contract to the broker on a commission basis. As a result, he or she will be keen to complete a sale so that they can make their income targets. This can lead to an element of pressure selling which both buyers and sellers should be aware of and resist.

In effect, the real estate business structure in the US offers the house buyer/seller a double layer of protection. The agent's license protects the consumer from adverse actions being undertaken by the agent and the brokers' license means that there is a monitoring of the agents work and an added protection for the consumer against detrimental acts performed by the business. Thus, it is essential for your own piece of mind that, when buying or selling a property, you engage the services of a suitably qualified real estate broker and agent.

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