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