What is a real estate broker vs. an agent? We explain the key differences

Vetted by HousingWire  |  Our editors independently review the products we recommend. When you buy through our links, we may earn a commission.

Whether you’re looking to start a career in real estate, already have one or are involved in real estate transactions, you may find yourself wondering about industry terminology and job titles. The industry acronyms alone look like alphabet soup. So, let’s start with the basics: What is a real estate broker vs. an agent?

To answer that, we’ll take a deep dive into the differences between the many types of real estate professionals, including a real estate agent and a real estate broker. Real estate agents and real estate brokers are both licensed real estate professionals who can assist buyers and sellers, but you should be aware of some key differences and state-specific distinctions. Let’s dive in!

What is a real estate agent?

A real estate agent is a licensed professional who represents buyers or sellers in real estate transactions. Though most commonly thought of for residential deals, real estate agents can also help people buy, sell or rent commercial properties, land and more.

There are multiple types of agents — more on that below — but the common thread is that to become an agent, each professional must fulfill licensing requirements in accordance with their state. Much like lawyers needing to take a separate bar exam in each state they wish to practice in, real estate agents’ training and licensing requirements vary by state.

PRO TIP

You may see the terms “real estate agent” and “Realtor” used interchangeably. While a Realtor is indeed an agent, the term doesn’t work both ways. To be a Realtor, an agent must be a member of the National Association of Realtors® (NAR). To become a NAR member, licensed real estate agents must join a local NAR association and pay annual dues.

What does a real estate agent do?

A real estate agent’s tasks will vary depending on which side of the transaction they are on. This section gives you a broad overview of their most common roles.

Arguably, one of the most important functions of a real estate agent is to guide and be a subject matter expert to clients through the buying and selling processes. Put simply, a good agent is a sherpa who knows every step of the journey and expertly leads their client up the path. That can include being a housing market expert and advising clients on the best times to list or buy a home; having referrals handy for inspections, repairs, staging and photography; understanding the mortgage origination process; and more.

Real estate agents are also intermediaries between buyers and sellers, ensuring that their clients are well-represented in negotiations and that any concerns that arise during the transaction are addressed. Direct communication between buyer and seller is rare, and in many cases, can backfire. Agents serve as a safe middleman to keep things moving forward in a professional manner.

Also top of the list, agents are marketers. A top-notch real estate agent knows exactly how to market a home listing to get the right eyes on it. This includes — but is not limited to — posting to the MLS, hosting open houses and getting creative with social media.

Last but not least, real estate agents prepare documents such as closing documents, purchase agreements, and leases while ensuring that the transaction is in compliance with local laws and their client’s terms are met. An agent may also be present at closings to review closing documents and help guide their client through the final steps.

This is far from an exhaustive list of all that agents do, but the common thread is this: Agents serve as experts and guides in real estate transactions to get their clients the best possible outcomes.

How do real estate agents get paid?

The simple answer is that real estate agents are paid on commission, typically a percentage of the property’s sale price. In the average residential transaction, commissions are usually split between the buyer’s agent and the seller’s agent, with the seller typically paying both commissions.

However, if you’ve been paying attention to the news over the past few months, you know this question has been top of mind across the industry. The NAR Settlement, which resulted from a class action lawsuit, brought real estate commissions into the spotlight.

Unfortunately, it also resulted in the circulation of misinformation about commissions. While several changes went into effect in August following the settlement, commissions remained negotiable, as they always have been.

Types of real estate agents

As you’ve likely gathered, there are multiple types of real estate agents. An agent can play many roles but typically stick to one role in a single transaction to avoid conflict of interest. For example, it would be rare for an agent to be both the listing agent and buyer’s agent for the same transaction (what’s called dual agency). However, it does happen, and we cover that below, as well as the various types of brokers.

Here are brief descriptions of each type of real estate agent:

• Listing agent: The listing agent represents the seller. Their responsibilities include listing the property on the MLS, marketing the property and negotiating offers with potential buyers.
• Buyer’s agent: The buyer’s agent represents the buyer. They assist buyers throughout the home search, negotiate the purchase price and guide them through the closing process.
• Dual or transactional agent: As mentioned above, these situations are rare, but a dual or transactional agent represents both the buyer and the seller in the same transaction. This can create conflicts of interest, and real estate agents generally shy away from this.
• Referral agent: A referral agent is a real estate agent who refers clients to other agents in exchange for a referral fee. This is a common practice in the real estate industry, especially for agents who specialize in certain types of properties or markets.
• Commercial real estate agent: Commercial real estate agents specialize in transactions involving commercial properties, such as office buildings, retail stores, and industrial warehouses.

How to become a real estate agent

The path to becoming a real estate agent varies by state, so your natural first step is to research your state’s requirements. Factors like minimum age, education, and background checks differ by state. Generally, you need to be a U.S. citizen or legal resident and be 18 years of age or older. No matter where you’re looking to work, to become a real estate agent, you must complete a prelicensing course from an accredited real estate licensing school prior to sitting (and passing!) your state’s real estate license exam.

Enroll in and complete a prelicensing course approved by your state’s real estate commission. This course covers real estate law, contracts, finance and ethics. The required number of hours varies by state. Find our state-specific guides here to learn how many hours of education you need to complete to become licensed in your state.

We highly recommend The CE Shop. With training courses for all 50 states and easily accessible online courses, The CE Shop is a value-packed resource for agents nationwide. To learn more and find a list of other helpful accredited real estate schools, check out the links, below.

Check out The CE Shop