The term “real estate broker” can be confusing because it’s a bit of an oversimplification, but there are some differences between the two terms. Realtors are members of the National Association of Realtors (NAR), and have to abide by its code of ethics. While real estate agents can also be brokers, there are certain limitations on who can call themselves a broker.
A broker earns a commission on a sale, while a real estate agent gets paid a fee based on a percentage of the price of the house. The commission is typically 6% of the sale price. The brokerage that supervises the transaction keeps the other half. If the broker works directly for the seller, they can earn a commission without splitting it with the brokerage.
To become a broker, an agent has to attend a pre-license class. These classes cover the various aspects of running a real estate business. They cover topics such as investment, construction, and property management. However, the length of these classes will depend on the state in which the broker is licensed. The class will be a few weeks or months long depending on the state.
As a broker, it’s important to realize that they are responsible for the operations of their business. They may be required to set aside cash for unexpected events. Unlike individual agents, a real estate brokerage has a number of complexities, including seasonality and staff turnover. This makes it vitally important to have a comprehensive business plan. The best way to do this is by following the broker’s Twitter handle, @nytrealestate.