A real estate broker is a person who has obtained a professional license to directly act as an intermediary in the business of selling, buying, and renting real estate such as houses, buildings, and offices. The main difference between a real estate agent and a real estate broker is that brokers have obtained a higher-level license. This license enables brokers to either practice independently or have real estate brokerage firms that hire other real estate agents to work under the supervision of the brokers.
Each state has its regulations regarding the issuance of professional licenses for real estate brokers. In general, to obtain a professional license as a broker, the interested real estate agent must have practiced for an established number of years. Furthermore, the real estate agent must take a set number of additional training hours and a written exam. If the real estate agent passes the written exam, the state will issue the corresponding professional license that enables the real estate agent to act as a real estate broker.
Like real estate agents, real estate brokers are paid through the commissions obtained when closing a real estate transaction. However, brokers commonly earn higher commissions than real estate agents.
While real estate agents are focused on the sales part of real estate transactions, real estate brokers handle the technical aspects. For example, brokers prepare the required contracts or establish escrow accounts, among others.
[Last updated in August of 2021 by the Wex Definitions Team]