Real Estate Broker vs Agent in NYC: A Comparison
You’ve heard both terms used before, sometimes interchangeably. So what’s the difference between a real estate broker vs agent? Is it better to work with a real estate broker vs agent in NYC?
What Is a Real Estate Broker?
A real estate broker is technically the Broker of Record or Principal Broker of a real estate brokerage. Some companies, including those organized as corporations and Limited Liability Companies (LLCs), can have multiple Brokers of Record which you can look up in eAccessNY (NYS DOS license database). The official NYS DOS titles for Brokers of Record are Corporate Broker, Limited Liability Company Broker, or Individual Broker in eAccessNY depending on whether the operation is structured as a corporation, a LLC or a sole proprietorship.
Who’s a Real Estate Broker?
A real estate broker can also mean a company itself, especially when organized as a corporation. For example, you might see a sign outside a real estate office that says “Dumbo Realty LLC, Licensed Real Estate Broker.” For real estate brokers operating as a sole proprietorship, you might simply see a sign that says “John Doe, Licensed Real Estate Broker.”
What Is a Real Estate Agent?
A real estate agent is anyone who acts on behalf of a principal in the buying, selling or renting of real estate. Because this term is so expansive, it can technically include Principal Brokers, Licensed Associate Real Estate Brokers and Licensed Real Estate Salespersons. Essentially anyone who is licensed with New York State to practice real estate brokerage.
In practice, this unofficial term is most often used by Licensed Real Estate Salespersons and sometimes Licensed Associate Real Estate Brokers to describe themselves. That’s because this term is quite popular and well understood by the general population, and may even sound more authoritative than an officially sanctioned title such as a Licensed Real Estate Salesperson. Furthermore, because the term is rather vague, it may cloud over the licensing level and perceived knowledge of an agent whose official title is Licensed Real Estate Salesperson.
What Is a Licensed Associate Real Estate Broker?
A Licensed Associate Real Estate Broker is someone who has passed the broker exam and is qualified to start their own brokerage, but chooses to work under another real estate broker. When they associate with another real estate broker, they are not considered to be a Broker of Record, but are rather called a Licensed Associate Real Estate Broker.
What’s an Associate Broker?
Real estate agents often take the extra coursework and time to become an associate broker primarily so they can use this officially sanctioned title. There is typically no extra work or responsibility involved just because an agent is an associate broker. However, many experienced agents feel that there is a benefit in perceived knowledge and experience with this bump in title.
Other Titles in Real Estate Brokerage
The New York Department of State has issued several memorandums which prohibit associated licenses, meaning Licensed Real Estate Salespersons and Licensed Associate Real Estate Brokers, from using titles such as President, Vice President, Senior Vice President, Executive Vice President or Managing Director of a real estate company for marketing purposes. The government wants to prevent real estate agents from falsely advertising that they hold corporate positions within a real estate brokerage.
What Does the Law Say?
Article 12-A of the New York’s Real Property Law prohibits subordinate licensees from holding voting stock in a corporate brokerage and from being appointed an officer in a corporate brokerage, a manager or member of a LLC, or a member of a partnership. As a result, it would be not only inappropriate but also illegal for a Licensed Real Estate Salesperson or Licensed Associate Real Estate Broker to use a title like Vice President when they are prohibited by law from gaining such a position in the first place!
Is It Better to Work with a Broker vs Agent?
You shouldn’t decide on whether to work with a broker vs agent based on title alone. Many highly experienced real estate agents do not become Licensed Associated Real Estate Brokers or Principal Brokers of their own firms because of the cost1 and marginal benefit in doing so. Many real estate agents are content to focus on doing deals and minimizing costs, and have enough reputation and reviews where they do not care about a bump in title.
With that said, if you are lucky enough to be able to work with a Principal Broker of a firm, typically one that is smaller or mid-sized, then you should definitely take the opportunity as this individual is likely to be extremely experienced and qualified. With that said, make sure this Principal Broker has agents and deal flow because just being an Individual Broker with no activity does not make an agent qualified.
So should you work with a broker vs agent or does it truly not matter at all? It’s important not to over-analyze the importance of titles in real estate. Instead, focus on how many listings the agent has and how many deals the agent has done. Does the agent have good customer reviews? Most importantly, is the agent able to work with you on commission? If you’re buying a home in NYC, can your buyer’s agent offer you a substantial closing gift or better yet, a credit of the commission that he or she earns? If so, can your buyer’s agent give you a better deal discreetly so you won’t be treated any differently by other agents?
Home Buyer Closing Credit
All of the above factors are more important than title differences between a broker vs agent. If you don’t already have a buyer’s agent, please contact us to learn more about a Hauseit Buyer Closing Credit and how you can discreetly save on your purchase with New York’s most experienced real estate brokers!
As an example, the REBNY association dues for a Licensed Associate Real Estate Broker are multiples of the annual fee for a Licensed Real Estate Salesperson.
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Disclosure: Hauseit (https://www.hauseit.com) and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).
