Are you getting ready to buy and/or sell a house this year?
With the price of homes steadily rising, it can be tricky to find a property that meets your needs and find a buyer who can afford what you’re asking for your home. This is why having a professional on your side is so helpful. It’s not always easy to tell, though, whether you should work with a broker or an agent when going through the home buying and selling process.
Read on to learn more about the difference between a broker vs real estate agent so you know who to hire.
What Is a Real Estate Broker?
Real estate brokers have a high level of training and education in real estate-related matters. When it comes to the hierarchy of real estate professionals, brokers sit above agents on the totem pole.
Real estate brokers can work as part of a brokerage, where they have agents who work under them. They may also work on an independent basis. They need to make efforts for higher sales.
In most states, if a real estate professional wants to work on their own, they must be a broker. Agents, alone, can’t work independently.
Brokers often have four-year degrees. They’ve also taken college-level real estate courses and have passed their state’s broker’s real estate exam (which is longer and more complex than the exam one must pass to become a real estate agent). Most of the time, they also have several years of experience working in real estate.
What Is a Real Estate Agent?
A real estate agent is a licensed salesperson who has the credentials needed to help consumers buy and sell their houses.
Like real estate brokers, they must complete a certain number of hours of real estate courses. The courses are not as comprehensive as those that a broker must complete, though.
Real estate agents also much pass a licensing exam before they can begin working as part of a brokerage.
Remember, real estate agents can’t work on their own unsupervised. They have to be part of a larger organization.
Pros and Cons of Hiring a Broker vs Agent
At first, one might assume that it’s always best to work with a broker instead of an agent since they have more experience and education. That’s not always the case, though.
There are benefits and drawbacks that come with hiring either a broker or an agent. Here are some key pros and cons to consider before making a decision.
On the plus side, brokers’ knowledge often works in their favor. They have a lot of inside information about the housing market in a particular area and may be aware of certain homes that other agents might not.
What’s often even more valuable than their knowledge, though, is their experience. The most successful brokers have often been working in real estate for a few years, and they’ve had chances to establish relationships with a lot of important people. For example, they might be able to connect buyers with great mortgage loan companies or help them save money on home repairs or inspections fees.
At the same time, it’s important to note that it’s often much more expensive to work with a broker than a real estate agent. The average real estate broker salary is quite a bit higher than that of an agent, and their clients have to pay more money in exchange for their services.
Sometimes, the extra money is worth it, especially if the broker does a good job helping you find the right house and sell your current one for the right price. In other cases, though, you might spend more money than is necessary and would have had just as much success working with an agent.
When you work with an agent, you can often spend less money than you would when working with a broker. That doesn’t always mean you’re getting less value, though.
There are plenty of experienced, knowledgeable real estate agents out there who, for whatever reason, aren’t interested in becoming brokers. If they’ve been working in the field for a long time, they likely know just as much as the broker (or brokers) under whom they work. They’ll still be able to connect you with the right people and make the process as simple as possible.
Agents may also have more time to dedicate to you than brokers. Because they aren’t in charge of running a business, they’re often less busy than brokers. As a result, they’ll be able to give you more attention and will be able to do more to help you find the right home that fits within your budget and meets your needs.
On the downside, not all real estate agents are created equal. Because the barrier to entry is lower for them than brokers, you need to be extra diligent in your search for the right agent. There are plenty of great ones in the industry, but there are also many who won’t be a good match for you.
As long as you do plenty of research before making a decision, though, you shouldn’t have too much trouble finding an agent who’s motivated and has the knowledge and skills needed to help you buy a new house.
Broker vs Real Estate Agent: Which Is Right for You?
As you can see, both real estate brokers and real estate agents have benefits they can offer you in your search for the perfect home.
Now that you know more about the difference between a broker vs real estate agent, do you know which one you want to hire? As you begin your search, be sure to keep the pros and cons listed above in mind so you ensure you find the best person for the job.
Don’t forget to check out some of the other real estate articles on our site. You’ll find more useful information there to answer all of your buying and selling-related questions.