Real Estate Agent vs. Real Estate Brokerage
Real estate agents are quite essential pieces on the real estate chessboard. However, they are not alone. A real estate brokerage also plays a vital role in the real estate industry. The real estate industry in the GTA and everywhere else in a machine with core components of its own. You take out one of these components, and the machine will ultimately fail. Real estate agents in the GTA and brokerages are two of the vital components that make things work.
Other key players in the world of real estate include real estate lawyers, appraisers, inspectors, and salespeople. However, over the years, people have managed to blur the lines between these professions.
Sometimes real estate agents and a real estate brokerage are confused as the same thing. Other times, it is the appraisers and inspectors that experience the identity merge. However, the truth is that each of these key players has a distinct role they play in the buying and selling of property.
A real estate brokerage and a real estate agent in the GTA are not the same things. Admittedly, sometimes there is a little similarity in the duties, but the fact remains that they are not the same. We will be telling you all about the differences between the real estate brokers and real estate agents and, of course, their similarities. Keep reading to find the answers to your questions and the agents and brokers in real estate.
Related article: What To Look For When Hiring A Real Estate Agent To Represent You
Real Estate in Toronto: Terms You Need to Know
Before we clear the air on your real estate agent vs. real estate brokerage puzzle, there are some terms you should know. Knowing this will make your journey into real estate knowledge easier.
Real Estate Broker
A person who owns a real estate brokerage is called a broker. On the real estate ladder, a broker sits a step above the real estate agent.
Real estate brokers generally have had more education and have undergone more training than real estate agents. They are licenced to own their brokerage firms and can work alone, but usually, they employ the services of real estate agents.
This is a real estate broker who works for another brokerage firm other than his own. Most brokers do this to increase their real estate network. However, in most cases, a real estate broker associate has to pay a flat rate to a managing broker.
Real Estate Agent
As mentioned earlier, an agent is distinctly different from a broker. In the GTA, real estate agents can be described as licensed salespersons.
A real estate agent in the GTA can not work independently and must be in the employ of a real estate broker. Also, agents also have to undergo training and acquire licenses.
A realtor can be either the owner of a real estate brokerage or an agent. However, not all brokers or agents can be considered realtors. This is because realtors have to acquire membership of the national association, must subscribe to the ethics code and must pay annual dues.
Real Estate Agents vs Real Estate Brokers: The Similarities
Here a couple of ways through which you can distinguish brokers and agents in real estate.
Training and Licence
The level of education, training and certification is one of the major differentiating factors between a real estate agent and a broker. Generally, a broker is more learned and has gone through more training than an agent. More importantly, a real estate broker must have passed the state’s broker exam and received a broker’s licence.
Real estate agents, on the other hand, have lesser training and have only attained a real estate agent license. All brokers are initially real estate agents in the GTA. They climbed farther up the ladder after fulfilling state requirements, acquiring relevant knowledge and passing attached exams to obtain the state licence to be a broker.
A real estate broker is licensed to own a brokerage firm and can work independently to buy and sell a property for its clients. Real estate agents in the GTA cannot function independently and will have to be hired by a broker.
Agents can only buy and sell a house or property for clients that are associated with their employing firm. As such, agents are typically a step or two below the broker and cannot independently manage real estate deals. Real estate agents have to report to a managing or supervising broker who will monitor and take responsibility for the actions of the real estate agent.
Similarities Between a Real Estate Agent and a Real Estate Brokerage
There is a line where the job descriptions of both the real estate agent and the broker appear to blur. This is because both the agents and brokers are actively involved in helping clients buy or sell both residential and commercial property.
However, the vital point to remember is that a real estate agent is always attached and under the management of a real estate brokerage firm. A real estate broker, however, may be working independently.
Benefits of Being a Real Estate Agent
Both real estate agents and brokers have specific benefits and advantages that their career paths allow them to enjoy. Here are a couple of perks to being a real estate agent.
Fewer licensing requirements
Real estate agents have less educational and administrative hassles to deal with in acquiring their licences to practice in real estate.
Less financial obligations
Since real estate agents cannot own or run brokerage firms, it means they have a lot less to be worried about at work. A real estate agent is only responsible for his actions and does need to worry about the legal and financial implications of the actions of other agents.
Less administrative worries
Being responsible for the day-to-day operations of a brokerage firm is not among the obligations of real estate agents in the GTA. All they have to do is help a client buy a house or sell it as the case may be.
Benefits of Owning a Brokerage
Although being a broker generally means an increased workload, it also has a lot of significant advantages.
Brokers can own their brokerage firms
With a broker, there are no career or legal limitations. Unlike agents, real estate brokers can run a private firm and keep all the commissions. Alternatively, they can choose to hire real estate agents. A broker can also opt for a managing broker position. This means a real estate broker’s options are wide open.
Although there is more work to be done, on average real estate broker earns twice as much as real estate agents. This certainly makes all the extra hours spent gaining the required training and experience worth it.
Extensive marketing experience
Since a real estate broker has received more training and has typically worked longer than the average agent, they are more likely to possess a wealth of real estate knowledge. This knowledge will come in handy when dealing with clients. The broker can also leverage his knowledge and expertise in particular situations in ways an agent can not.
Brokers can own property management companies
This is another way to rake in the earnings. Real estate brokers can run companies that help clients property that is being rented. They can carry out leasing and management activities, which can be an added source of income.
Hopefully, we have been able to answer your questions about real estate agents in GTA vs a real estate brokerage.
It is safe to say that both professions have their perks and downsides. It is then left to real estate experts to decide which path to walk.