Both real estate agents and brokers are licensed to help you in your home purchase. Real estate brokers have additional certification in some states, but in many states the word “broker” and “agent” are interchangeable.
For example, in some states, brokers must have a real estate license for a minimum of two years and then pass a more difficult exam.
In Illinois, however, a real estate broker is at the same level as a licensed real estate agent. Illinois uses the term “managing broker” to refer to the person who oversees agents at a firm.
What does a real estate broker do?
Brokers are licensed to do everything a real estate agent does, including negotiating and writing property transactions, but brokers can also assist agents if an issue occurs during any part of the home-buying or selling transaction.
Because brokers have a higher level of licensing, which requires more classwork hours and tougher exams, real estate brokers are in a position to supervise and guide agents and oversee transactions.
When shopping for a home, you’re more likely to work with an agent, as most brokers spend their days overseeing the real estate brokerage and supervising individual agents.
Brokers go by different names, depending on the size of their brokerage and their role and responsibilities:
- Principal broker
- Managing broker
- Broker associate
Real estate brokerage definition
A real estate brokerage is a firm where a broker, agents and assistants work. The supervising broker is responsible for all of the associate brokers and agents working at the firm, as well as any unlicensed personnel. Some groups of associate brokers and agents group together and form teams, but they are still under the supervision of the supervising broker.
At a small boutique real estate firm, the broker might be the owner of the company and may also take clients. At a larger real estate firm, the broker is the person who oversees one specific office that’s part of the larger organization.
Types of real estate agents
There are several types of real estate agents, based on the roles they take on for their clients. Many specialize in one type of real estate:
- Listing agent: represents the seller
- Buyer’s agent: represents the buyer
- Dual agent: represents both the seller and the buyer in a transaction
- Transaction agent: When dual agency is not legal, a transaction agent oversees the transaction timelines and paperwork for both parties, but they don’t give advice or represent either side.
What do real estate agents do?
When working with buyers, real estate agents oversee the home purchase process, from the initial home search all the way to the closing. Some real estate agents go above and beyond the following list, but these are the key responsibilities of a full-service, professional buyer’s agent:
Help you figure out your purchasing power: A good agent will guide you through the pre-approval process, suggest lenders and help you determine the right budget.
Home in on neighborhoods and school districts: Your agent can help you explore neighborhoods based on your budget, lifestyle and commute.
Curate listings based on your wants and needs: An agent will send you an initial set of listings to review, then new listings regularly so you can determine if a property is worth seeing in person. Agents sometimes have access to off-market or pre-market listings that you wouldn’t be able to find on your own.
According to the Zillow Group Consumer Housing Report 2019, 82% of buyers use an agent during some part of their home search. And when buyers are determining the right home to buy, 53% say their agent’s evaluation of the home is very or extremely important to them.
If you’re ready to start exploring listings now, consider reviewing move-in ready Zillow-owned homes.
Submit offers: Once you’ve found a house you love, your agent will help you settle on an offer price, suggest the terms of your offer and submit the offer to the listing agent or owner for review.
Negotiate on your behalf: Your agent will negotiate with the other party to come to an agreement on final price and terms, including an earnest money deposit. Your agent will continue to negotiate on your behalf as you move toward closing, especially on things like inspections and closing credits.
Make professional recommendations: Agents are also a great resource for referrals to trusted professionals, such as home inspectors and real estate attorneys.
Complete paperwork: There’s a lot of paperwork involved in buying a home. Your agent will draft the contract, send disclosures and work with your real estate attorney (where necessary) to review all documents. They’ll also help with any other required paperwork during the escrow period.
Facilitate inspections and repairs: Your agent will attend the home inspection with you, help schedule additional inspection needs (a sewer line inspection, for example), coordinate times with other parties and make sure deadlines are met.
Navigate you through closing: Your buyer’s agent should attend your closing to make sure there are no issues and handle any problems that arise.
How does a real estate agent get paid?
While the role of a buyer’s agent is to help a buyer find a home, they’re usually paid by the seller. Sellers typically pay 5-6% of the sale price in agent commission, with the total amount being split roughly 50-50 between the seller’s agent and the buyer’s agent. However, in FSBO instances or occasions where the seller isn’t paying a commission, the buyer’s agent agreement will usually detail that the buyer is responsible to cover agent commission.