A real estate broker is a licensed professional who can represent buyers and sellers, manage transactions, supervise agents, and—depending on state rules—operate a brokerage and hold transaction funds. Brokers have more education and legal responsibility than a typical sales agent.
Agent: a licensed sales agent works under a broker; Realtor: a real estate professional who is also a member of the National Association of REALTORS®; Mortgage broker: a loan intermediary who shops lenders for borrowers—very different from a real estate broker.
Brokers list properties, represent buyers or sellers in negotiations, prepare and review contracts, coordinate inspections and appraisals, and help complete closings. They must follow state licensing rules when drafting documents and providing advice.
Many brokers supervise licensed agents, set office policies, provide training, and ensure legal and ethical compliance. The broker or designated broker typically maintains transaction files and supervises advertising and disclosures.
State law controls who can accept and hold earnest money or client funds. Brokers commonly maintain trust/escrow accounts or arrange for title/escrow companies to hold funds. Proper deposit handling, record‑keeping, and reconciliations are a broker responsibility.
A broker acts as a principal when they buy or sell for their own account (or their company does). They act as a representative when they represent a buyer or seller under an agency agreement. Conflict rules and disclosure requirements change depending on that status.
Becoming a broker requires additional courses, experience as a licensed sales agent in most states, and passing a broker exam. Sales agents must operate under a broker’s supervision; brokers can work independently and supervise agents.
“Realtor” is a trade‑association title indicating membership in the National Association of REALTORS® (NAR). It’s not a separate license—both Realtors and non‑Realtor brokers hold the same state license, but Realtors agree to follow NAR’s Code of Ethics.
Suggested table columns: Role | Licensing level | Typical duties | Who to contact for problems. Rows: Sales Agent | Brokered license | Showings, offers | Broker-of-record; Broker | Broker license | Supervision, escrow authority, sign contracts | Broker-of-record; Realtor | License + NAR member | Same duties + Code of Ethics | NAR complaint for ethics issues.
Mortgage brokers connect borrowers with lenders, gather loan documents, and package applications—focused on financing. Real estate brokers handle marketing, negotiation, contracts, and property transfer—focused on the real property transaction.
When you need help getting a loan, ask for a “mortgage broker” or loan officer. When you need help buying, selling, pricing, or negotiating a property, ask for a “real estate broker” or “real estate agent.” If unsure, state your need—financing vs. buying/selling—and the office will route you correctly.
Commonly, total commission (e.g., 5–6% of sale price) is split between listing and buyer’s brokers, then each broker splits with their agent per their agreement (typical splits vary, e.g., 50/50, 60/40). The broker-of-record often receives the brokerage portion and pays agents according to contract.
Some brokerages offer flat‑fee listings, hourly or a la carte services, or reduced‑commission packages. Discount and rebate models vary by state—confirm what services are included and how disclosure and fiduciary duties are handled.
Commissions are negotiable between seller and listing broker. Market norms often guide rates, but any fee can be negotiated. Buyers typically don’t pay the buyer agent directly unless it’s a fee‑for‑service arrangement.
Independent brokerages are locally owned and flexible; franchises use a national brand with consistent systems; boutique brokerages focus on niche markets or high‑touch service. Each has different marketing reach and cost structures.
Titles vary by state: the broker‑of‑record or designated broker is legally responsible for a brokerage’s compliance; managing brokers run daily operations; associate brokers hold broker licenses but work under another broker and typically don’t carry final legal responsibility.
Virtual brokerages reduce overhead and may offer lower fees, but local market knowledge and hands‑on service can be limited. Discount models save money but may provide fewer services—matching needs to service level is key.
Brokers owe clients duties such as loyalty, full disclosure of material facts, confidentiality of sensitive information, and reasonable care and skill. These duties are enforced by state law and can create legal liability if breached.
Brokers must supervise agents to ensure lawful conduct; failure to supervise can lead to vicarious liability for agent misconduct. Brokerage policies, training, and documentation are important risk controls.
States differ on required agency disclosures, whether dual agency is allowed, and what forms must be signed. Always check local rules and require written agency agreements to clarify relationships and duties.
Dual agency occurs when one brokerage (or one agent) represents both buyer and seller in the same transaction. Some states permit it with informed consent; others limit or ban it due to inherent conflicts of interest.
In dual agency, brokers may be limited in advocating fully for either party—e.g., they may not be able to share confidential negotiating positions. Written disclosure and informed consent are required where allowed; consider separate representation if possible.
Designated agency assigns different licensees in the same brokerage to each client. Transaction brokers provide limited representation to both parties without fiduciary duties. These alternatives can reduce conflicts while keeping the deal in one brokerage.
Hire a broker when deals are complex (commercial purchases, multi‑party transactions, 1031 exchanges), when you need escrow authority, or when local market experience and negotiation skill materially affect value.
For straightforward residential purchases or sales, a licensed sales agent working under a reputable broker typically provides all needed services. The broker still oversees the transaction per law.
FSBO can save commission but increases legal, marketing, and negotiation risk. Consider limited‑service broker options (flat fee for MLS listing, contract review) or at least consult a broker for pricing and disclosure guidance.
Use your state real estate commission’s online license lookup to confirm license status, expiration, endorsements, and disciplinary actions. Verify the broker-of-record and whether the license is active and in good standing.
Check MLS sales history, NAR/Realtor membership, online reviews, and ask for recent transaction references. Review marketing materials and request case studies for similar properties.
Watch for vague fee terms, pressure to sign before reviewing, inconsistent advertising, missing disclosures, or evasive answers about experience—these are red flags to investigate before hiring.
Ask: How long have you worked in this market? Can you share recent comparable sales? How is your team structured? Who will handle showings, negotiations, and paperwork? What marketing will you use and what are your fees?
Choose a broker with demonstrable experience in your property type—commercial leases, multifamily investment, luxury residential, or short‑term rentals each require different skills and networks.
Get fees and service scope in writing, review the marketing plan (photos, MLS, staging, advertising), and agree on communication frequency and preferred channels before signing.
States differ on broker titles, supervision rules, trust account handling, and agency law. Always consult the state real estate commission for local requirements and forms.
Outside the U.S. the title “broker” can mean different things (sales agent, property manager, or financial broker). International clients should ask about local licensing, regulatory oversight, and whether the professional can hold client funds or represent parties in court.
“Listed by broker” usually means contact the listing brokerage’s office; the listing agent or the broker-of-record can answer questions about showings, offers, and disclosures.
The supervising broker may be vicariously liable for agent mistakes, depending on supervision and state law. Errors & omissions insurance, corrective disclosures, and broker oversight affect outcomes.
Example: 6% total commission on a $400,000 sale = $24,000. If split 50/50 between listing and buyer broker, each side gets $12,000. Each broker then pays its agent per their internal split agreement.
Sarah hires Tom (a licensed sales agent) to find a home. Tom works under Rivera Realty, the broker-of-record. Sarah signs a buyer representation agreement with Rivera Realty (usually signed by the broker or agent). Tom shows homes and submits offers on Rivera Realty letterhead; Rivera Realty holds contractual responsibility and may hold earnest money in its trust account or instruct title/escrow to hold it. If a paperwork or disclosure issue arises, contact Rivera Realty’s designated broker; they are legally responsible to correct errors and supervise resolution.
An investor calls a real estate broker asking about financing; a well‑run brokerage will either refer to an in‑house loan officer or recommend a vetted mortgage broker/loan officer. The real estate broker should clarify they do not arrange loans unless licensed to do so and provide a referral to avoid confusion.
Yes in some states with written consent (dual agency), but rules vary and it limits advocacy for each party.
No—buyers and sellers can transact without a broker, but brokers simplify legal, marketing, and negotiation steps and reduce risk.
Typical full‑service commissions range 4–6% of sale price, but flat fees and discount models exist; fees are negotiable.
Depends on the state and experience requirement—often 2–5 years of licensed sales experience plus broker coursework and an exam.
Potentially yes—brokers can face vicarious liability if inadequate supervision or policies contributed to the mistake; E&O insurance and good supervision mitigate risk.
Suggested Q/A pairs for schema: Q: “What is a real estate broker?” A: “A licensed professional who supervises agents, represents buyers/sellers, and can operate a brokerage.” Q: “How does a broker differ from an agent?” A: “Brokers have more licensing, can supervise agents, and may hold escrow or run the brokerage.” Q: “When should I hire a broker?” A: “For complex, commercial, or high‑value deals, or when you want someone who can manage an entire transaction end‑to‑end.”
Long‑tail keywords: “what does broker mean in real estate,” “difference between broker and agent,” “should I hire a real estate broker,” “broker vs mortgage broker explanation.” Meta description idea: “Learn what a real estate broker does, how they differ from agents and mortgage brokers, commission structures, legal duties, and how to verify a broker’s license.”
A broker is a higher‑level licensed real estate professional who can supervise agents, manage transactions, and assume legal responsibility for a brokerage—critical for complex, high‑value, or commercial deals. For routine residential transactions, a sales agent under a reputable broker is often sufficient. Always verify license status and disciplinary history with your state real estate commission, check recent transaction history, and get fee and service scope in writing before you sign.
