Real Estate Broker or Salesperson
When looking to buy or sell a house, clients often ask us: real estate broker or salesperson, which is better? Clients usually realize that they should consult with a real estate agent. They just don’t know if it is a broker or a salesperson. The term “real estate agent” is the generic term used to describe real estate brokers and real estate salespersons. Under New York State Law, both brokers and salespersons must be licensed. Indeed, both must keep abreast of changes in the real estate laws by completing continuing education courses. While both are involved in the buying and selling of homes, the broker and salesperson have distinct roles and responsibilities.
A real estate broker is licensed to act independently in the listing, negotiating, selling and/or buying of a home. The broker acts as a “middleman” and can represent the seller, buyer or even both parties where there is full disclosure. The broker’s job is to bring together those seeking to sell real estate with those seeking to buy. The broker’s negotiations typically result in a “meeting of the minds” between buyer and seller which can then be formalized in a contract to be drawn up by the attorneys for the parties. Most brokers are compensated for their work in the form of a commission based upon the sales price of the premises. A broker can be an individual person or a business firm owned and operated by an actual broker. To become a licensed broker, most States require that the individual have 1 to 3 years experience as a licensed Salesperson.
A real estate salesperson is also involved in the negotiations between buyers and sellers and the bringing together of a “meeting of the minds.” The main distinction between broker and salesperson is that the salesperson cannot act independently; he or she must be employed by a real estate broker. In addition, a salesperson has to be an actual person and cannot be a business entity such as a corporation. Salespersons perform their job under the supervision, guidance and responsibility of the employing broker. A salesperson cannot accept a listing for a property in his or her own name; the listing must be taken in the name of the broker. No previous experience is required to obtain a salesperson’s license.
The distinction between the licensing requirements between brokers and salespersons is by no means any indication of ability of that person to perform as a real estate agent. Generally speaking, the role of the broker is in running the business while the role of the salesperson is generating sales. A salesperson can receive a broker’s license but elect to work in another broker’s office under the title of salesperson or associate broker. Likewise, a broker can run the business and also be great at generating sales.
When considering whether you should hire a real estate broker or salesperson, we say that you should go with whom you are comfortable. Experience counts a lot as does the opinions of prior clients of the Broker or Salesperson. A Broker’s or Salesperson’s participation in State and local Real Estate Associations is also usually a good indication of the dedication your agent has to his or her profession.