Real Estate Agent vs. Broker: Key Differences
The main difference: agents must work under a broker, while brokers can work independently and own their own brokerage. Brokers need 1-3 years of agent experience plus additional education (60-360 hours), according to state licensing board requirements. Brokers typically earn higher commissions by keeping the full commission or earning splits from agents they supervise.
What is a real estate agent?
A real estate agent (also called a salesperson) is licensed to help clients buy, sell, or rent properties. However, agents cannot work independently—they must operate under a licensed broker.
Requirements:
- Complete state-required pre-licensing education (40-180 hours)
- Pass the state licensing exam
- Work under a sponsoring broker
Typical responsibilities:
- Show properties to buyers
- Help sellers list and market homes
- Negotiate offers and counteroffers
- Guide clients through the transaction process
What is a real estate broker?
A broker has completed additional education and experience requirements, allowing them to work independently or manage their own brokerage.
Requirements:
- Hold an active agent license for 1-3 years (varies by state)
- Complete additional broker education (60-360 hours)
- Pass the broker licensing exam
Broker types:
- Principal/Designated Broker: Owns or manages a brokerage
- Managing Broker: Supervises agents at a brokerage
- Associate Broker: Holds a broker license but works under another broker
What are the key differences between agents and brokers?
| Aspect | Agent | Broker |
|---|---|---|
| Independence | Must work under broker | Can work independently |
| Experience | Entry level | 1-3 years minimum |
| Education | 40-180 hours | Additional 60-360 hours |
| Commission | Split with broker | Keep full commission or earn from agents |
| Liability | Broker assumes responsibility | Personally liable |
How much do agents vs. brokers earn?
Agents: Typically split commissions 50/50 to 70/30 with their broker. On a $400,000 sale with 3% commission, an agent might earn $6,000-$8,400.
Brokers: Keep their full commission when working independently. As managing brokers, they also earn a percentage of their agents’ commissions.
Should I become a broker?
Consider upgrading to broker if you:
- Want to run your own business
- Have 2-3+ years of successful sales experience
- Want higher earning potential
- Enjoy mentoring and training others
Many successful agents never become brokers—and that’s fine. The right choice depends on your career goals.
How do I upgrade to broker?
Ready to make the leap? Here’s the general process:
- Meet experience requirements (1-3 years as active agent)
- Complete broker pre-licensing education
- Pass the broker exam
- Apply for your broker license
Check our broker license guides for state-specific requirements.