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What Is a Real Estate Broker?

by The CE Shop Team

Understanding the Duties & Responsibilities of a Real Estate Broker

When you decide to make real estate your career, getting to know the various roles you could hold is one of the most difficult tasks. It sounds silly, but it’s enough to make your head spin. Perhaps the most confusion comes from real estate “agent” and real estate “broker.” Yes, there is a difference between a real estate broker vs agent. We want to help alleviate some of that confusion and answer a few of the key questions: What is a real estate broker? Do brokers make more than real estate agents? What does a broker do?

In simple terms: A real estate broker has more experience, undergoes more training, and ultimately makes more money. Brokers are also allowed to open their own brokerage or property management firm. Here’s another way to look at it. Real estate agents are like professional athletes on their first contract. They learn the profession and how to do the job. They’re still considered professionals. Real estate brokers are the veterans who have been around. They’ve had more extensive training and went through the ups and downs of the real estate profession.

Differences Between a Broker, Agent, & Realtor

So what are the differences between a real estate “agent,” a real estate “broker,” and a “REALTOR®?” This is probably the easiest to understand, so we’ll get it out of the way. A “REALTOR®” can be either an agent or a broker, it just depends on the state. To become a REALTOR®, the agent or broker must join the National Association of REALTORS® (NAR).

As for the differences between a broker and an agent, they are significant although the terms do vary by state. Typically, when people use the terms interchangeably, they’re referring to an “agent” or a “salesperson.” They’re not referring to a real estate broker vs. an agent. The agent is the person who is actually out showing homes, marketing their brand, and connecting people with the property they’re seeking. When that agent makes a sale, their commission is split with their broker. That’s who the agent works for.

In terms of a broker, there are typically three categories they fall under.


In a given brokerage firm, there are generally three types of brokers:

  • Associate broker
  • Managing broker
  • Principal broker

The biggest difference between real estate agents and brokers is that a broker is free to work independently. Brokers can also hire real estate agents to work for them. All real estate commissions must be paid directly to a broker, then the broker splits that commission with any other agents involved in the transaction.

Each brokerage firm is required to have at least one principal broker. That’s the person who is responsible for the actions of the affiliated agents. As for what each type of broker does ...

Pro Tip:

All real estate commissions must be paid directly to a broker, then the broker splits that commission with any other agents involved in the transaction.

What Does a Real Estate Broker Do?

The obvious next question is: What does a real estate broker do? It all depends on the type of broker you are. An associate broker has different duties and responsibilities than a managing or principal broker. An associate broker is similar to a real estate agent, the broker just has more freedom to have more primary tasks.

Here’s a general idea of the primary tasks for an associate real estate broker:

  • Manage transactions
  • Market homes for sale
  • Negotiate pricing
  • Hold open houses
  • Show homes
  • Prospect buyer and seller leads
  • Represent buyers and sellers in transactions

When you become a managing or principal real estate broker, that’s when the primary tasks carry more weight. As industry experts have indicated, the duties and responsibilities are more high-level management and supervisory. That doesn’t preclude managing or principal brokers from actively helping people sell or buy homes.

As mentioned earlier and for the most part, real estate brokers are the veterans of the business. They have been an “agent” before so they have the experience and took the required classes and passed the necessary tests to become a broker. With that comes the flexibility to do what they want. If a broker wants to continue to help people achieve the dream of buying a home, they can. If a broker wants to open a real estate brokerage in the town in which they reside, they can do that as well. If a broker wants to dabble in a little bit of everything, they can do that as well.

Here’s a general idea of the primary tasks for a managing or principal broker:

  • Manage agents
  • Recruit agents
  • Train agents
  • Distribute leads among team members
  • Market the brokerage
  • Establish escrow accounts
  • Work with government and professional associations
  • Handle compliance issues
  • Recordkeeping
  • Review contracts

As is the case with real estate agents, brokers make their money through commission. Those are payments made directly to real estate brokers for services rendered in the sale or purchase of a home, for example. How much commission a broker takes home depends on several factors, including how much commission the broker splits with an agent and their brokerage. The most important factor, as it is with agents, is the number of transactions the broker is involved in. The more houses the broker sells, the more commission they make, thus the cash they bring in.

A broker’s compensation is typically specified in the listing agreement. That is also known as a contract between a seller and the listing broker detailing the conditions of the listing. As noted earlier, the commission is negotiable in every case. In fact, it is a violation of federal antitrust laws for members of the profession to attempt, however subtly, to impose uniform commission rates.

What is a Brokerage & What Services do They Provide?

Now that you have a general sense of what real estate brokers do, what is a brokerage and what services they provide will make more sense.

Look at a brokerage like a team. Everyone who works for the brokerage is part of that team, whether they’re a real estate agent or associate broker. The ultimate goal remains the same: sell and buy as many houses as humanly possible. Obviously the bigger the brokerage firm, the larger that pie is. The smaller brokerages may just want to offer the best and most seamless process possible without the “big name.”

Some of the bigger brokerages you have heard of: Coldwell Banker and RE/MAX. To get an idea of the brokerages in your area, it may serve as a good research product to know what’s out there and who you may want to connect with.

The brokerage allows the different types of brokers to focus on helping customers buy and sell homes. The larger the brokerage, the more flexibility there is in that regard. The duties and responsibilities of getting exposure for the brokerage, preparing contracts and leases, personnel development and mentoring falls to the managing and principal brokers.

The associate broker thus is allowed to focus on the tasks of buying and selling homes, customer prospect, hold open houses and show homes.

How to Become a Broker

Whether you’re just getting started or are currently a real estate agent who craves more freedom and money, how to become a broker is based on where you live. To find out all you need to become a real estate broker, get started today.