Real estate agent
A real estate agent is someone who has a professional license to help people buy, sell, or rent all sorts of housing and real estate.
To get that license, states require individuals to have prelicensing training. The required number of training hours can vary significantly by jurisdiction. In Virginia, for example, real estate agents must take 60 hours of prelicensing training, while in California they need 135 hours of license coursework.
Once that training is done, aspiring agents take a written licensing exam. This exam is typically divided into two portions: one on federal real estate laws and general real estate principles, the second on state-specific laws.
Once they pass their exam, they’ve earned a license, the title of a “real estate agent,” and they might join a brokerage where they can begin working with home buyers, sellers, and renters.
Real estate broker
A real estate broker is someone who has taken education beyond the agent level as required by state laws and passed a broker’s license exam.
Similar to real estate agent exams, each state sets its own broker education and exam requirements. The extra coursework covers topics such as ethics, contracts, taxes, and insurance—at a more in-depth level than what’s taught in a real estate agent prelicensing course.
Prospective brokers also learn about real estate legal issues and how the law applies to operating a brokerage, real estate investments, construction, and property management.
To sit for the broker’s exam and obtain licensure, real estate agents must already have a certain level of experience under their belt—typically, three years as a licensed real estate agent.
There are three types of real estate brokers, each with subtle differences in the role they perform:
- Principal/designated broker: Each real estate office has a principal/designated broker. This person oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. Like real estate agents, principal brokers get paid on commission—taking a cut of the commissions of the sales agents they supervise (although many principal brokers receive an annual base salary).
- Managing broker: This person oversees the day-to-day operation and transactions of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff. (Some principal/designated brokers also serve as managing brokers.)
- Associate broker: This real estate professional—sometimes called a broker associate, broker-salesperson, or affiliate broker—has a broker’s license but is working under a managing broker. This person typically is not responsible for supervising other agents.
In order to become a Realtor—a licensed agent with the ability to use that widely respected title—an agent needs to be a member of the National Association of Realtors®.
As a member, a person subscribes to the standards of the association and its code of ethics.
“Essentially, the NAR holds us to a higher standard,” says Peggy Yee, a Realtor in Falls Church, VA. Membership in the NAR also comes with access to real estate market data and transaction management services, among other benefits.
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