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Is it Better to be a Real Estate Agent or Broker?

A real estate agent refers to a licensed professional tasked with arranging real estate transactions.

Such transactions may include connecting buyers and sellers or representing either party in negotiations concerning the selling and purchasing of houses.

On the other hand, a broker has an additional license to operate independently without getting attached to any agency.

Brokers can contract agents to work with them. Realty brokerage firms such as Keller Williams Realty have a team of real estate agents that connect buyers and sellers, facilitating buying or selling their properties.

Many other differences set brokers and real estate agents apart. So, which one is better, a broker or a real estate agent? Keep reading to learn more.

image - Is it Better to be a Real Estate Agent or Broker?
Is it Better to be a Real Estate Agent or Broker?

The Benefits of Being a Broker Over a Real Estate Agent

Being a broker comes with a plethora of benefits. You’ll need to put in more hard work and meet more education requirements to become a broker.

However, the effort comes with significant rewards as brokerage opens higher career opportunities than real estate agents. Here are the main benefits of becoming a broker.

1. You Can Run Own Brokerage

Licensed brokers have limitless opportunities, including starting their own brokerage firm and representing clients independently.

Being a broker allows an individual to work alone and keep 100% of the earned commissions or hire real estate agents to work with them.

You can also create your firm in a location where you earn 100% commissions and pay desk and other designated fees.

For instance, you can start a brokerage firm to mentor and manage agents by serving as a managing broker.

The managing broker position will empower you to oversee agents and brokers in a given brokerage setting, especially if you have vast experience in the industry.


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2. Brokers Earn Higher Income Than Real Estate Agents

Most agents go for further training in the pathway to becoming real estate brokers for money.

A broker has more opportunities to earn a higher income than a real estate agent.

NAR 2020-member profile statistics reveal that a real estate agent takes home as low as $40k annually.

A broker takes home between $93,800 and $121,400 during the same period.

Real Estate Brokers Enjoy High Commission Splits

You can opt to work as an associate broker if;

  • You’re a new broker in the industry
  • You want to gain an entrepreneurial streak
  • You like the safety that comes with working under an established broker.

The license and expertise may allow you to bargain for higher commission splits.

Remember, this benefit comes with lesser responsibilities than if you were running your brokerage.

It’s crucial to understand where you stand and the options that you have. The commissions and salary that you command shape your advancement in the career path.

Ensure that you have sufficient insights into the commission split as you plunge into the market.

3. You Can Run a Property Management Company as a Broker

Another critical reason for training as a broker is to run a property management company.

Property management companies serve as intermediaries between rental property owners and their tenants.

Collection of rent, leasing, and related activities require a broker’s license. The law stipulates that every property management company must include a real estate broker in its list of staff members.

What Benefits Do Real Estate Agents Have Over Brokers?

The activities of real estate agents are more limited than brokers. One stand-out point about agents is the fewer administrative responsibilities that they have. Some of the benefits of being a real estate agent include;

1. Fewer Licensing Requirements

For one to become a real estate agent, they will have to;

  • Comply with administrative requirements
  • Pursue state-specific course to get a license
  • Pass a licensing exam

Brokers will spend several hours on coursework and sit for more challenging exams to qualify for licensing.

Many real estate professionals remain agents to avoid the hassle of pursuing the steps towards becoming a broker.

2. Limited Financial Liability

Real estate agents have limited financial liabilities because they can’t start or manage their brokerage firms.

They are working under a brokerage firm most of the time, and they are free from any financial liabilities that the firm incurs. Agents have reduced duties and responsibilities.

It’s pretty easy to become a real estate agent than a broker. However, brokers make more money because of their training and experience.

It’s also worth knowing that brokers are the only professionals in the real estate industry mandated to open and manage independent brokerage firms.

Agents must upgrade their licenses to brokers before thinking of starting a brokerage company.

Real estate brokers earn more than an agent, although their positions come with more responsibilities.


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