A real estate broker or real estate agent is a person who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy. In the United States, the relationship was originally established by reference to the English common law of agency, with the broker having a fiduciary relationship with his clients. A real estate broker typically receives a payment called a commission for successfully matching a seller’s real estate with a buyer such that a sale can be made. This commission can be divided up with other participating real estate brokers or agents when applicable.
An estate agent being used as a term in the United Kingdom means a person or organization whose business is to market real estate on behalf of clients, but there are significant differences between the actions and liabilities of brokers and estate agents in each country. Beyond the United States, other countries take markedly different approaches to the marketing and selling of real property.
In the United States, however, real estate brokers and their salespersons (commonly called “real estate agents” or, in some states, “brokers”) assist sellers in marketing their property and selling it for the highest possible price under the best terms. Crucially, in the U.S. each state has their own laws defining the types of relationships that can exist between clients and real estate professionals and those relationships, such as brokerage and agency, can vary markedly.
To become licensed, most states require that an applicant take a minimum number of classroom hours before taking the state licensing exam. Such education is often provided by real estate firms or by education companies, either of which are typically licensed to teach such courses within their respective states. The courses are designed to prepare the new licensee primarily for the legal aspects of the practice of real estate and to pass the state licensing exam.
Once licensed, the licensee in most states is initially designated a salesperson and must work under a broker’s license. Some other states have recently eliminated the salesperson’s license and instead all licensees in those states automatically earn their broker’s license.
A salesperson must place their license under a managing broker. Typically there may be multiple licensees holding broker’s licenses within a firm but only one broker or the firm itself, it the managing or principal broker and that individual or firm is then legally responsible for all licenses held under their license.
The term agent is not to be confused with salesperson or broker. An agent is simply a licensee that has entered into an agent relationship with a client. A broker can also be an agent for a client. It is commonly the firm that has the actual legal relationship with the client through one of their sales staff, be they salespersons or brokers.
In the United States, there are commonly two levels of real estate professionals licensed by the individual states but not by the federal government: real estate agents and real estate brokers.