What’s the difference between a real estate broker and a sales person?
There are two practical differences.
First, the relationship between a broker and salesperson is much the same as that of an employer and employee. A broker operating his or her own office under state law must supervise and oversee all licensees working from that office or on the broker’s behalf.
Second, a broker is the only individual empowered by state law to conduct a real estate transaction. Sales persons have no legal authority to participate in a transaction without their broker’s involvement.
Individuals who hold a Pennsylvania broker’s license but work in the office of, and on behalf of, another broker are known by the state as “associate brokers.” They too are subject to supervision.
Under state law, sales persons and associate brokers are deemed to be independent contractors of the supervising broker.
It’s more difficult and takes longer to get a broker’s license.
You need to take significantly more education. You need to pass another licensing exam. Unless you intend to work with another broker as an associate broker, you’ll need to start up your own office and meet the state’s requirements for it.
Why would anyone want to become an associate broker?
Importantly, plenty of people become associate brokers. They never intend to open their own offices. They pursue a broker’s license for its educational value, and the reason is simple: the more you know, the more you can sell.
Broker licensees learn the basics of real estate investment, real estate finance and real estate law, for example. Because they’re knowledgeable about these subjects and others, buyers and sellers alike rely on their expertise. Associate brokers often work with higher-end clients, deal in more valuable properties, and attract more repeat business. For them, obtaining a broker’s license is just the path to earning more revenue.
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