Broker Terminology
Broker Terminology
Image via Wikipedia
As you begin your house hunting, it helps to keep straight the various terms for real estate licensees.
Agent is a general term for anyone empowered to act for another. Many agents you meet have been hired by the seller and have special fiduciary duties to the seller (more on that important point later.)
Broker is a legal term for someone licensed by the state to negotiate real estate transactions and to charge for services.
Salesperson is the term for the holder of an entry-level license; a salesperson is allowed to assist a broker who is legally responsible for a salesperson’s activities. In some areas the word agent may be used for a salesperson, as opposed to a broker. A salesperson may not operate without supervision and may collect fees only from the sponsoring broker as a share of commissions earned by the salesperson’s efforts. In a new home purchase, the salesperson or builder sales consultant is generally employed by the builder to sell new home neighborhoods, with a license usually overseen by a “broker of record” within the building organization.
REALTOR® is a trademark designation (properly capitalized, like Xerox, Kleenex or Coke) for a broker (in some areas a salesperson) who belongs to a private organization called the local Association, or Board, of REALTORS®, a state board of REALTORS®, and the National Association of REALTORS®. REALTORS® subscribe to a code of ethics that goes beyond state license law, and usually sponsor a local Multiple Listing System, which offers access to houses listed for sale by many different firms.
REALTOR-ASSOCIATE® is the term used by some boards of REALTORS® for salespersons associated with member brokers.
So as you start your search for the best agent, should you prefer a salesperson or a broker? There’s something to be said for each. In general, you can expect a broker to have more education and experience. On the other hand, some long-time salespersons remain at that status simply because they prefer not to go into business for themselves. And you could run into a well-trained, highly motivated newcomer with the time and enthusiasm to do a first-class job for you.
