Every industry has its own titles and jargon, and real estate is no different. And while many people tend to use terms like real estate agent, real estate broker, and Realtor® interchangeably, there are big differences. So which one’s best for you? And in San Francisco real estate, do you need an agent or a broker?
Agent vs Broker
An agent is licensed to help people buy, sell, or rent different kinds of real estate. In California, they earned that license with at least 135 hours of coursework and after passing a written exam. Think of the agent as rung one on the real estate career ladder.
Incidentally, Realtors® — proper noun, with the registered symbol — are licensed agents who is also a member of the National Association of Realtors®, an organization with its own standards and code of ethics.
Rung two is the broker, who has completed all the steps necessary to become an agent, worked in the industry for a predetermined amount of time, and continued their education. To become a broker, an agent has to pass a broker’s license exam. Individual states set their own requirements for broker education and exams. In general, the additional coursework includes a deep dive into topics like ethics, contracts, taxes, and insurance. Prospective brokers also learn more about legal issues pertaining to real estate, including law applications to real estate investments, construction, and property management.
There are three types of brokers:
- Principle/designated broker: There’s a principle or designated broker at every real estate office. Duties include overseeing the firm’s other real estate agents to ensure they’re following state and national real estate law.
- Managing broker: The managing broker oversees day-to-day operations and transactions, typically using a hands-on approach. Sometimes, particularly in smaller firms, the principle broker also serves as the managing broker.
- Associate broker: The associate broker has a broker’s license, but still works under the managing broker. Usually, there’s no supervisory role for an associate broker.
No matter the type of broker, their advanced level of training and education gives brokers an equally advanced knowledge of the real estate business. And that’s really the key. In a market like San Francisco, buyers and sellers are best served by someone who knows the industry in and out. Someone with deep, personal experience buying and selling in the city. Someone who isn’t learning on your sale or purchase.