The difference between a real estate agent and a real estate broker

Many people know what a real estate agent is and what a real estate broker is but many do not know what differentiates the two.  To put it simply, the difference between the two comes down to the services that each are legally able to provide to his or her clients.  A real estate agent is an agent of the broker and in most cases, depending on the type of broker’s license the brokers holds, he or she is the owner of the company.  Just to mention a couple of types of Brokers licenses you have a Qualifying Brokers license and an Associate Brokers license. Qualifying Brokers are generally owners of the company or the Broker that runs the show and an Associate Broker is a Broker that works for or with the Qualifying Broker.  The Broker is responsible for the actions of the agents that work under his or her Brokers license and it is important to understand the liability.  Educational requirements are also different for a Broker than they are for an agent.  For example and agent may only be required to have 20 CE credits and a Broker or may be required to have 60 CE credits.  These requirements may vary based on your specific State of residence.  The classes are different because the knowledge a Broker must have differs from the knowledge an agent may have to have.  An agent can further his or her education and apply to take classes and test to become a licensed Broker but he or she should ensure that he or she meets all of the requirements before signing up for classes and tests.  In fact an agent may not be able to apply for the test, or the class, until all requirements are satisfied. A real estate agent can’t conduct real estate business without working for a Broker and all real estate transactions are written or drawn up in the Brokers name.  Of course the exception is that anyone can sell his or her own residence for sale by owner without the assistance of an agent or Broker.  Brokers are responsible for opening, maintaining and monitoring trust accounts, which are accounts that earnest money or rental deposits if you are a property manager, are held in until such time as disbursal is authorized.  All earnest money collected by an agent is to be turned over to his or her broker immediately.  The brunt of all responsibility and actions of all agents falls in the lap of the Broker.  Though most all agents are independent contractors, they owe loyalty and due diligence to the Broker who holds their license and should always keep the reputation of their Broker clean and respected.  So remember, agents work under the Broker and the Broker is the principal of the agent.  Brokers have more responsibility and liability than the agent.