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