Brokers vs. Agents
They are not the same thing. When someone e-mailed a question along those lines, I looked it up. According to Home Buying for Dummies, by Eric Tyson and Ray Brown:
Every state issues two kinds of real estate licenses: a salesperson's license and a broker's license. People with broker's licenses must satisfy much tougher educational and experience standards. If your real estate agent is not an independent broker or the broker for a real estate office, he (or she) must be supervised by a broker who is responsible for everything that your agent does or fails to do. In a crisis, your transaction's success may depend on backup support from your agent's broker.You know what that makes me think about? This recent post about real estate fraud. If you read the post and the comments, you'll see there is interesting discussion about the merits of strict barriers to entry as a way of weeding out potential fraudsters out of the real estate profession. Would tougher certification requirements for agents improve the industry's performance and reputation?
Seems like an imperfect, but handy "back of the cocktail napkin" way to guage that would be to examine the records of brokers vs. agents. With all that education and experience, do brokers tend to be roped into shady business practices at a similar rate as agents? Are they better? Worse? Anybody know?
Fraudsters come in all shapes, sizes and license levels - broker and salesperson. There is no way to do away with fraudsters - they are here to stay. The bigger issue is unsupervised agents, not agents committing fraud - but basic incompetence. Overall, the consumer is much better served if all agents were required to be brokers - forget agents totally, or cut back what agents can do to that of an assistant. The agent concept was designed by brokers who didn't want to work very hard. I don’t know this to be true, but maybe in the early days it went something like “I'll do the 'hard work' here at the office, generate leads from this new phone from Mr. Bell, manage the operations while you - the agent - go out and open doors and fill out forms. I'll be here if you get in trouble and we'll split the commission - deal?” More and more the agent starting getting all the authority of the broker except signing on new agents and handling trust funds and commissions. Today’s broker is simply a recruiting, paperwork and accounting machine with one broker "managing" hundreds of agents. Insane.
Is there a difference if we will deal with a broker or agent in buying a home? Since we are 1st time home buyers, my husband and i are thinking that we could get a better deal if we work with the broker than an agent.
Patricia,
You can work with an agent or a broker to procure your home. My advice is to get a referral from someone you know and trust. Perhaps get a few from several people you know and trust. Then interview them and make sure you feel comfortable with them. Their agent or broker status will be insignificant if you trust them to do right by you.
Good luck!
I agree with Doug above, people's past experiences help you learn more about the process of buying or selling. It also prepares yourself with activities such as budgeting and improving your financial flow and record-keeping, so that the process can be a smooth one. As for the ol' argument regarding license status among brokers verses agents, please DO interview at least one whom that has invested additional time and money into their careers by receiving and keeping up-to date their designations. This is a real estate consultant who keeps up-to-date on real estate law practice and that's the agent, either broker or salesperson you'd want on your side.
PS Love your site.