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What Is A Real Estate Broker And How Are They Different From An Agent?

Reblogger
Real Estate Broker/Owner with ACTIONAGENTS.NET Oregon 780301468

Lisa Udy of Cache Valley, UT has posted the requirements for a becoming a (supervising) "broker" in her state. 

Those requirements include satisfying a point-system to ensure a minimum level of real estate experience before becoming a full-fledged "broker".

It looks like a great idea to me....though even the Utah requirements might be not be strenuous enough.


In Oregon, all agents are brokers.

(That's highly confusing, considering the licensing rules in many states.)

New brokers in Oregon must undergo a background check, pass a 150-hour course, and pass a federal and state exam.

To become a sole proprietor broker (with no agents working for you) you must be a broker and have 3 years experience.

To become a principal broker (with or without agents working for you) you must have 3 years experience and pass a 40-hour Brokerage Administration and Sales Supervision course.

All licensees must complete 30 hours of continuing education before each two-year license renewal.

 

All of these standards are way too easy.

I like the point system Lisa describes.  But even it means a "broker" in her state only has to have been involved in 24 transaction sides over the required 3-year period.  That's an average of 8 per year.

 

I'd certainly support a point system and a more strenuous exam for principal brokers here - as well as a tightening of all our other requirements.

 

 

Original content by Lisa Udy

Original Source: Real Estate Brokers And Agents

Many people believe that a real estate broker and a real estate agent are the same thing. This is just not true. So, what is the difference between a real estate broker and a real estate agent?

Similarities Between Real Estate Broker’s And Real Estate Agent’s

Businesswoman on phone.

 

Similarities: Both real estate broker’s and real estate agent’s are required to maintain an active real estate license.  They must pass the state real estate exams of their states. Here in Utah, if you want to be a Utah real estate agent, you have to have 120 hours of education completed and pass the state exam, and you have to pass a federal criminal background check.

 

Both broker and agent are held to high standards when it comes to representing their clients. According to the Utah real estate agency agreement contract, agents fiduciary duties include loyalty, obedience, full disclosure, confidentiality, reasonable care, and any other duties required by Utah law.

 

What does this mean? It means that both broker and agent are held to high standards when representing their clients. If they fail to perform the fiduciary duties required by Utah real estate law, they can lose their license, face excessive fines, and can even go to prison.


The Difference Between Real Estate Broker And Real Estate Agent

The difference between real estate broker and real estate agent, if you get technical, is the difference in licenses they hold. A real estate agent holds a real estate license while a broker holds a broker’s license. What’s the difference?

 

In Utah, in order to qualify for a Utah real estate broker’s license, an agent must perform more hours of education, have at least three years of real estate experience, and they must have at least 60 points worth of real estate transaction experience. The point system in Utah is like this:


Real Estate Transactions –  Residential Commercial
A. One Unit Dwelling 2.5 points
B. Two to Four Unit Dwelling 5 points
C. Apartments, 5 Units or More 10 points
D. Improved Lot 2 points
I. Retail Building 10 points
E. Vacant Land/Subdivision 10 points
F. Hotel or Motel 10 points
G. Industrial or Warehouse 10 points
H. Office Building 10 points
J. Commercial Leasing 5 points

Property Management - Residential Commercial
A. Each Unit Managed 0.25 pt/month
B. Each Contract or Property 1 pt/month
Info gathered from the Utah Division Of Real Estate.

As you can see, in order for a real estate agent to become a real estate broker, they have to actually sell real estate. They must be experienced in real estate transactions and have a license for at least three years. But there’s more.  In order to get a broker’s license, the applicant must complete another 120 hours of education and then pass the Broker’s exam, which is more difficult than an agent exam.

Who Should You Use To Help Buy And Sell Real Estate?

Real Estate Brokers And Agents TeamHonestly, you should pick an agent that you are comfortable with no matter if they are a broker or an agent. Just because an agent ins’t a broker, it doesn’t mean they are inadequate. In fact, that couldn’t be farther from the truth.  Many real estate agents are well qualified to obtain a broker’s license, but they choose not to for numerous reasons.  You see, being a real estate broker has two sides.

 

Real estate broker’s are more liable then a real estate agent. Every real estate agent has to work under a broker’s license. The reason being is, in a real estate transaction, there are certain liabilities that the real estate agents take on when helping people buy and sell real estate. By being a real estate broker, every agent that works under their brokerage adds more liability for the broker.

 

Because the broker takes on more liability, they can also make a little more money then agents. That’s where commission splits come into the picture. The reason real estate agents are willing to pay a commission split to a  broker is because of the limited liability the agent has in a transaction.

 

They pass on that liability to their broker and pay them a split to cover it. The broker is required to oversee their agents actions to ensure the agents are working within the laws and they deserve compensation for their efforts.

 

The reason agent’s have to work under a licensed broker or obtain their brokers license themselves is; to provide you with the comfort of knowing the people handling your real estate transaction are performing their duties lawfully and honestly.

 

It gives you, as the consumer, more experience behind the transaction, and it gives you a safety net. A real estate transaction can be as easy as signing a contract or it can be a very complicated legal process.  Having an experienced broker aiding in the transaction ensures that if their is a problem, the broker can step in and ensure you are being taken care of correctly. If they don’t, they could lose their license as well as the agent.

 

That’s why, when you buy or sell real estate, choosing an experienced agent with integrity and a solid reputation within the communities they serve is vital. I like to say every real estate transaction is different.

 

No matter how simple it looks on the outside, there is always something that comes up in a real estate transaction. From a little chipped paint, to funding being delayed, to major structural problems, getting real estate transactions to close on a consistent basis takes expertise, hard work, and some incredible problem solving.

 

Successful real estate agents and brokers aren’t just sales people, they are adept problem solvers, social workers, extremely knowledgeable, but above all, they are honest, caring people. Choose the right real estate agent in your real estate transaction and you will know first hand how much they can do to ensure your real estate dreams come true.

 

Lisa Udy

Platinum Real Estate Group

Please Help Carolyn Capalbo

Posted by

 ***********************

 

Jim Hale

Principal Broker / Owner

Graduate, REALTOR Institute             e-PRO

2015 Member, Million Dollar Club of Lane County

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Comments (4)

Ellie Shorb
Compass Real Estate - Chevy Chase, MD
Realtor DC, MD & VA Luxury Home Expert

I agree... the more experience required the better!!

Jun 09, 2010 01:05 AM
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Eighteen Years Experience in Brevard County

A broker who has the experience can lead better - and that is what you want in a managing broker or broker owner.

Jun 09, 2010 01:08 AM
Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

When I became a broker in Georgia they had just changed the test. It went from multiple choice to simulations. This was great because you got a real life narrative and had to answer questions. Based on your answers the story evolved. Testing like this with real situations was a lot better than know that the 1.98 in taxes on the day of the closing belonged to the seller not the buyer. Or was it the other way around?

Jun 09, 2010 01:08 AM
Jim Hale
ACTIONAGENTS.NET - Eugene, OR
Eugene Oregon's Best Home Search Website

Ellie, Gary, Charlie -

Sound like we all agree with Lisa:  the standards should be tougher.

Jun 09, 2010 05:20 AM