Coming across real estate agents and brokers is very common while buying, renting or selling real estate properties. A common person is likely to us the terms real estate agent and broker interchangeably because both are involved in similar activities i.e., buying, selling and renting out properties. In fact, the two terms are used to denote professionals with significantly different capabilities and a person dealing in real estate must understand the difference between them.

A real estate agent is an individual who acts as a facilitator in a real estate transaction. His function is to bring seller and buyer together in real estate transactions and receive commission for his services, usually at a certain preagreed percentage of transaction value. A broker, on the other hand, is a broader term that refers to a person who owns a brokerage and hires real estate agents. Compared to an agent, a broker typically has more training and, therefore, deals with more technical aspects of real estate transaction. Keller Williams, Re/Max, Weichert and Century21 are some of the largest US based real estate brokerage firms. More examples of such firms/companies can be found in Amir Seligar’s article “The Largest Real Estate Brokerage Firms in USA” at

The article real estate agent vs broker looks into the meanings of two terms in more detail and explain the main points of difference between them.

Definitions and meanings

Real estate agent

When we talk about professionals related to real estate industry, an agent is probably the first title that comes to mind. It can be considered as the starting point for individuals seeking to enter the real estate industry. To become a real estate agent, a person needs to take different real estate classes and pass a licensing exam that is different for every state/country. Since the agents cannot work independently, they should be working under a licensed broker in order to sell the property legally.

Agents carry out meetings with clients, organize open houses and perform all other activities that are needed to sell the property. They can represent buyers as well as sellers involved in a real estate transaction.

Agents mainly earn through commission, which is typically a percentage of the selling price of the property. There can be different types of payment structures, depending on the brokerage for which the agent is working. Becoming an agent is a good starting point as it offers various opportunities to individuals to acquire experience after they commence their career in this field.


The term broker refers to a person who has gone further than the level of an agent in his real estate career. A person needs to acquire further education to become a broker and should go for a separate licensing exam. After fulfilling all the essential licensing requirements, a broker can independently buy or sell properties or start a brokerage firm where he can hire agents and deal with different clients.

A broker has a significant degree of freedom to establish his career in real estate industry. He may decide to function as an independent agent, which will give him greater flexibility in his work life as he works for himself or his own business and for anyone else. In addition, he may choose to set up his own brokerage firm and recruit real estate agents to work for him. A broker also has the option of entering the field of property management. Because of the availability of different choices, the brokers can determine a commission structure that is going to be most beneficial for them. Though becoming a broker is more difficult than becoming an agent, the payoff is much better and worth the effort.

Difference between real estate agent and broker

The six points of difference between real estate agent and broker are listed below:

1. Meaning

A real estate agent is a person responsible for facilitating real estate transactions by bringing together buyers and sellers. It is basically the starting point for all those seeking to start their careers in the real estate industry. On the other hand, a real estate broker is a person who possesses an extensive knowledge of the real estate industry, relevant laws, has acquired further education and obtained a real estate broker license.

2. Training and education

A real estate agent is someone who has managed to pass all real estate classes and has acquired the real estate agent license for the state/country in which he is going to work. A broker generally continues his education further than the level of the agent and obtains a real estate broker license.

3. Scope of work

It is the responsibility of the agent to negotiate offers between buyers and sellers and give them answers for any questions they have. After closing an offer, agents usually work with clients and guide them in completing the paperwork process.

Brokers working with buyers help them in finding the property that best suits their needs or criteria, carry out negotiations, develop offers and act for solving any issues they may face till the successful completion of the deal.

On sellers’ part, brokers offer their research and analysis in determining the fair market value of properties and their listings on appropriate forums and places. Brokers disclose available offers to sellers, facilitate them in creating a healthy negotiation environment and play their role in realizing the best possible prices of properties available for sale.

4. Independent operations

Legal restrictions don’t allow an agent to operate independently. He should be working under a licensed broker to be able to legally buy or sell property. However, after obtaining the real estate broker license, a broker can work as independent agent or he may decide to hire one or agents to work for him.

5. Career options

A real estate agent only has the option of working under a broker or brokerage firm as they cannot operate independently. However, a broker has various career options to choose from. He may work independently as an agent, open a brokerage firm and recruit other agents as his employees or carry out property management.

6. Source of income

Agents usually receive a commission for the transactions they carry out, i.e. they are paid a predetermined percentage of the sale price of the property. A broker also receives payment on a commission basis. However, because of the different options available to a broker regarding his real estate career path, he is able to choose from a number of commission structures.

Real estate agent vs broker – tabular comparison

A comparison of real estate agent and broker in tabular form is given below:

Real estate agent vs Broker
A person who facilitates transactions between buyers and sellers A person with more extensive knowledge than the agent and one who is involved in more technical aspects of a transaction
Training and education
Basic education for obtaining a real estate license More extensive education required to obtain a broker license
Scope of work
Facilitates offers between buyers and sellers; helps them close the deal and completes the mandatory paperwork. Helps buyers find the best property; tries to create an effective atmosphere for negotiations and solves any issues faced in closing the deal.

Helps sellers in determining market value of the property and achieves the best selling price.

Independent operations
Cannot work independently Can operate independently
Career options
Works for and under a broker or a brokerage firm Works as an independent agent; sets up a brokerage; carries out property management
Source of income
Commission-based Commission-based but with greater options

Conclusion – real estate agent vs broker

Undoubtedly, the terms real estate agent and broker can be confusing. The main difference between the two terms is in their licensing requirements, legal freedom of work and scope of operations. Agents have fewer licensing requirements compared to brokers. In addition, a broker is able to operate independently, whereas an agent works under a licensed broker. Hence, when dealing with an agent, one needs to understand that he is actually dealing with someone who is an employee of a real estate broker or a brokerage firm. The agent is basically facilitating you as the representative of the whole real estate firm.