| A real estate broker is a party who acts | | | | agency relationship with fiduciary |
| as an intermediary between sellers and | | | | obligations. |
| buyers of real estate and attempts to | | | | However, in some states, a non-agency |
| find sellers who wish to sell and buyers | | | | relationship may be established by |
| who wish to buy. In the United States, | | | | virtue of transactional brokerage. |
| the relationship was originally | | | | Transaction brokers |
| established by reference to the English | | | | Some state Real Estate Commissions, |
| common law of agency with the broker | | | | notably Florida's after 1992 (and |
| having a fiduciary relationship with his | | | | extended in 2003) and the Colorado's [2] |
| clients. Estate agent is the term used | | | | after 1994 (with changes in 2003), |
| in the United Kingdom to describe a | | | | created the option of having no agency |
| person or organization whose business is | | | | nor fiduciary relationship between |
| to market real estate on behalf of | | | | brokers and sellers or buyers. The |
| clients. | | | | transaction broker assists buyers, |
| In the US, real estate brokers and their | | | | sellers, or both during the transaction |
| salespersons (commonly called "real | | | | without representing the interests of |
| estate agents") assist sellers in | | | | either party. |
| marketing their property and selling it | | | | As noted by the South Broward Board of |
| for the highest possible price under the | | | | Realtors, Inc. in a letter to State of |
| best terms. When acting as a Buyer's | | | | Florida legislative committees [3]: |
| agent with a signed agreement, they | | | | "The Transaction Broker crafts a |
| assist buyers by helping them purchase | | | | transaction by bringing a willing buyer |
| property for the best possible price | | | | and a willing seller together and |
| under the best terms. Due to the | | | | assists with the closing of details. The |
| importance of this role, most brokers | | | | Transaction Broker is not a fiduciary of |
| that seek to play the role of client | | | | any party, but must abide by law as well |
| advocate are now seeking out the | | | | as professional and ethical standards." |
| services of Certified Mortgage Planners, | | | | (such as NAR Code of Ethics) |
| industry experts that work in concert | | | | The result was that in 2003, Florida |
| with Certified Financial Planners to | | | | created a system where the default |
| align consumers' home finance positions | | | | brokerage relationship was where "all |
| with their larger financial | | | | licensees are operating as transaction |
| portfolio(s). Without an agreement, | | | | brokers unless a single agent or no |
| brokers may assist buyers in the | | | | brokerage relationship is established, |
| acquisition of property but still | | | | in writing, with the customer" [4] and |
| represent the seller and the seller's | | | | the statute required written disclosure |
| interests. | | | | of the transaction brokerage |
| In most jurisdictions in the United | | | | relationship to the buyer or seller |
| States, a person is required to have a | | | | customer only through July 1, 2008. |
| license in order to receive remuneration | | | | In both Florida and Colorado's case, |
| for services rendered as a real estate | | | | dual agency and sub-agency (where both |
| broker. Unlicenced activity is illegal, | | | | listing and selling agents represented |
| but buyers and sellers acting as | | | | the seller) no longer exist. |
| principals in the sale or purchase of | | | | Dual Agency |
| real estate are not required to be | | | | Dual agency occurs when the same |
| licenced. In some states, lawyers are | | | | brokerage represents both the seller and |
| allowed to handle real estate sales for | | | | the buyer under written agreements. |
| compensation without being licenced as | | | | Individual state laws vary on this |
| brokers or agents. | | | | subject. |
| The difference between salespersons and | | | | Many states no longer allow dual agency. |
| brokers | | | | Instead, Transaction Brokerage (see |
| While some people may refer to any | | | | above) provides the Buyer and Seller |
| licensed real estate agent as a real | | | | with a limited form of representation, |
| estate broker, a licensed real estate | | | | but without any fiduciary obligations |
| agent is a professional who has obtained | | | | (see Florida law). Buyers and sellers |
| either a real estate salesperson's | | | | are generally advised to consult a |
| license or a real estate broker's | | | | licensed real estate professional for a |
| license. | | | | written definition of an individual |
| In the United States, there are commonly | | | | state's laws of agency. |
| two levels of real estate professionals | | | | If state law allows for the same agent |
| licensed by the individual states, not | | | | to represents both the buyer and the |
| by the federal government: | | | | seller in a single transaction, the |
| Real estate salesperson: When a person | | | | brokerage/agent is typically considered |
| first becomes licensed to become a real | | | | to be a Dual Agent. Special laws/rules |
| estate agent, he/she obtains a real | | | | often apply to dual agents, especially |
| estate salesperson's license from the | | | | in negotiating price. |
| state in which he/she will practice. To | | | | In some states (notably Maryland[5]), |
| obtain a real estate license, the | | | | Dual Agency can be practiced in |
| candidate must take specific coursework | | | | situations where the same brokerage (but |
| (of between 40 and 90 hours) and then | | | | not agent) represent both the buyer and |
| pass a state exam on real estate law and | | | | the seller. If one agent from the |
| practice. In order to work, salespersons | | | | brokerage has a home listed and another |
| must then be associated with (and act | | | | agent from that brokerage has a |
| under the authority of) a real estate | | | | buyer-brokerage agreement with a buyer |
| broker. | | | | who wishes to buy the listed property, |
| Many states also have reciprocal | | | | Dual Agency occurs by allowing each |
| agreements with other states, allowing a | | | | agent to be designated as |
| licensed individual from a qualified | | | | “intra-company” agent. Only the |
| state to take the second state's exam | | | | broker himself is the Dual Agent. |
| without completing the course | | | | Types of services that a broker can |
| requirements, or, in some cases, take | | | | provide |
| only a state law exam. | | | | Since each state's laws may differ from |
| Real estate broker: After gaining some | | | | others, it is generally advised that |
| years of experience in real estate | | | | prospective sellers or buyers consult a |
| sales, a salesperson may decide to | | | | licensed real estate professional. |
| become licensed as a real estate broker. | | | | Somes Examples: |
| Commonly more course work and a broker's | | | | Comparative Market Analysis - an |
| state exam on real estate law must be | | | | estimate of the home's value compared |
| passed. Upon obtaining a broker's | | | | with others. This differs from an |
| license, a real estate agent may | | | | appraisal in that property currently for |
| continue to work for another broker in a | | | | sale may be taken into consideration |
| similar capacity as before (often | | | | (competition for the subject property). |
| referred to as a broker associate or | | | | Exposure - Marketing the real property |
| associate broker) or take charge of his | | | | to prospective buyers. |
| her own brokerage and hire other | | | | Facilitating a Purchase - guiding a |
| salespersons (or broker) licensees. | | | | buyer through the process. |
| Becomming a branch office manager may or | | | | Facilitating a Sale - guiding a seller |
| may not require a broker's licence. Some | | | | through the selling process. |
| states such as New York allow licensed | | | | FSBO document preparation - preparing |
| attorneys to become real estate brokers | | | | necessary paperwork for "Sale By Owner" |
| without taking any exam. | | | | sellers. |
| A Realtor is a real estate salesperson | | | | Full Residential Appraisal - but only, |
| or broker who is a member of the | | | | in most states, if the broker is also |
| National Association of Realtors (NAR). | | | | licensed as an appraiser. |
| All Realtors are brokers/salespersons, | | | | Home Selling Kits - guides to how to |
| but not all brokers/salespersons are | | | | market and sell a property. |
| Realtors. | | | | Hourly Consulting for a fee, based on |
| Agency relationships with clients versus | | | | the client's needs. |
| Non-Agency relationships | | | | Leasing for a fee or percentage of the |
| Traditionally, the broker provides a | | | | gross lease value. |
| conventional full-service, | | | | Property Management. |
| commission-based brokerage relationship | | | | Exchanging property. |
| under a signed listing agreement with a | | | | Auctioning property. |
| seller or "buyer representation" | | | | Preparing contracts and leases. (Not in |
| agreement with a buyer, thus creating an | | | | all states.) |