If you’re thinking of moving, then hiring a realtor is high on your priority list. But which kind should you look for?
When you search for realtors, you’ll find real estate agents–and more. You’ll also find associates, salespeople, brokers, and other titles that only confuse you as you muddle through. But it doesn’t have to be that hard.
Here’s a breakdown of what a real estate broker vs agent can do and how they can help you in your search.
Real Estate Broker vs Agent: What’s the Difference?
Part of the reason the rules and titles are so confusing is that some of the requirements are different from state to state. But the basics are easy to explain and easy to understand.
To become a real estate agent, a person must pass the licensing exam. These are conducted by the state where the agent wants to sell real estate. Agents can have a license for more than one state.
That’s helpful if a real estate agent lives and works close to a state border and can work both markets. It’s also a great way to carry your job with you when you move, even if it’s across the country. The only thing an agent has to do to sell real estate in the new state is pass that state’s exam.
Real estate agents who belong to the National Association of Realtors can also claim the title “realtor.” To belong to the NAR, real estate agents have to pay the fees and agree to the code of ethics, among other things.
Any agent who wants to own a real estate firm also has to become a broker. This means passing more tests and obtaining licensure as a broker. Real estate agents have to work underneath a licensed real estate broker.
Real estate brokers can have their own business and work for themselves. They’re also licensed to employ other agents and realtors.
Other Real Estate Titles
Those are the main nuances between the different titles. You may hear other terms, too:
- Associate Broker, someone who’s studying for their broker’s license, working underneath a licensed broker, and who can make more money than ordinary agent commissions.
- Listing Agent, a real estate agent who’s representing the person selling the property.
- Rental Agent, a real estate agent who’s representing either a landlord looking to rent their property or a person looking to rent a property.
- Buyer’s Agent, a real estate agent who’s representing a person who wants to buy property.
By the way, associate brokers might be called affiliate brokers instead. Or you could see them titled salesperson brokers.
Let’s dive in more to how real estate brokers can help with specialized real estate investments.
Real Estate Brokers
Real estate brokers have more education and expertise than real estate agents. Most broker exams require that an agent who takes the test have a certain number of years of experience before they’re allowed to take it. A lot of states require at least three years, although again this varies.
Brokers can work as agents. Remember, though, that real estate agents can’t work as brokers.
Real estate brokers are also more specialized, something that changes between states because each one has its own requirements. Yet you can expect that they’ve probably learned more about ethics surrounding real estate, as well as in-depth studies about contracts and terms.
More subjects that have to do with business real estate come up during the broker exam, too. For instance, brokers learn more about construction, laws surrounding real estate investment, and property management.
Types of Real Estate Brokers
You’ll find different types of real estate brokers if you keep digging. Someone called a managing broker deals with the agents in the firm in a hands-on way. They interact with them every day and offer advice.
As the term suggests, they manage the brokers in the firm. They might also recruit new agents and do the human resources type tasks that involve training, etc.
A designated broker handles more of the legal issues that go along with running a real estate business. They make sure that all the agents are complying with laws and that everyone is up to speed. You might hear this person called a principal broker instead of a designated broker.
Real Estate Exchanges
If a person wants to avoid tax liability, one of the ways they can do that is in a real estate exchange. A licensed investment corporation can help you get this done fast, within the 45-day requirement.
These exchanges are called 1031 exchanges because the section of the IRS’s code that discusses them is Section 1031. The simplest way to understand it is that you can trade properties if they are the same kind, even if one is in better shape than the other.
With Turner 1031 exchanges, you can be sure you won’t have trouble finding an exchange with prearranged financing that’s assured to close. Sometimes you have to look outside of local properties to find the right exchange, and a large network of relationships helps make these deals happen.
Understanding Important Terms
When you’re buying, selling, moving, or investing, the last thing you need is to get bogged down by the complicated particulars. Knowing what a real estate broker vs agent means is the first step to getting through the process without a big hassle.
Based on the types of real estate agents, you can choose whether you’d benefit most from working with an agent, a realtor, a broker, or a specific type of any of those professionals.
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