by Dell Claiborne
What is the difference between a Real Estate Agent and a Real Estate Broker?
That’s a great question. Put simply, a Real Estate Broker has the ability and authority to supervise Real Estate Agents. If a person wants to become a Real Estate Agent, he must obtain a real estate salespersons license from the state in which he practices. In order to receive the license, the person must complete sixty course hours in the Principles of Real Estate, and then pass the National and State Board Exams. To practice real estate, he must affiliate himself with a broker, who has the authority to supervise licensed salespersons.
To receive a Broker’s License, someone must be a licensed, active salesperson for three of the last four years, as well as complete 180 course hours in subjects such as Real Estate Law, Brokerage, Finance, and Appraisal. Brokers must also pass State and National Board Exams.
There are two different types of Real Estate Brokers; Principal or Supervising, and Associate Brokers. Principal or Supervising Brokers are responsible for supervising Associate Brokers and salespersons. Associate Brokers are agents that have completed the requirements to be licensed brokers, but have chosen not to move into more supervisory roles. A major difference between brokers and agents is that brokers can be paid a commission directly for practicing real estate and an agent can only be paid by a broker. When you sell your house, the commission is paid to the brokerage, or Real Estate Company. The brokerage then pays the individual agent that handled the transaction. I’ll tackle the question of how Realtors get paid in another column.
A friend of mine is a Realtor. She surprised me by stating a price for my home that seems low. Another agent suggested a price that was higher and closer to what I expected. Which one should I work with?
There are a lot of variables that are involved in answering your question. First of all, choosing a Realtor to sell your home should be based on more than just suggested sale price. The marketing plan that your agent will implement may be even more important than the suggested price. Your home could be priced perfectly, but if that “perfectly priced” home isn’t marketed correctly, your odds of selling are decreased considerably. You should ask your friend and the other Realtor to each present you with a marketing plan that details what they will do to get your home sold for the best possible price in the least amount of time.
The next step is to have each of them put together a Comparative Market Analysis (CMA) for your property. This will help you compare which of them is actually closest on the price. A CMA will put together a list of homes that are active (currently for sale), pending (under contract) and sold homes within the last three to six months. This CMA will compare your home to the others based on the following criteria: Location, Square Footage, number of bedrooms and bathrooms, list price, days on market and sold price. There are other factors, but these basic ones should give you a clear picture of a range of where your home should be priced. The CMAs will explain how the two agents were so far apart on their initial assessments of your suggested price. Now after seeing both marketing plans and CMAs, choose the Realtor that best supports his or her opinion with the facts.
Dell Claiborne is Associate Broker with LET Properties, LLC. A native of the Richmond area, he says his interest in Real Estate began the first time he and his sister played Monopoly. He specializes in assisting first time homebuyers and training new agents. Dell lives in Richmond’s North Side with his wife Robin and daughter Lillian.