What is the difference between an agent and broker?

Question

I ask this because I just graduated college and the old mall job isnt doing it for me. I know I want to do REI with my life but I also want something that wont take a long time to build so I feel getting my license will provide me income I can live off of for a while.

But anyways, back to the question what is the difference? What I am seeking is being able to work with investors out here, along with other people, and just providing them homes on what they want. If I am an agent will I have to report through someone? Do I have to become a broker in order to not worry about anybody?

Thanks for your help!

Shane Bryan · Answer

I'm an Associate Broker in Colorado. Colorado uses different terms but here is the basic break down

an Agent is a entry level Real Estate Agent. They are required to work with a Broker for a least two years in most areas before they can work alone. All their activity's are closely watched by their Managing Broker. They are some times called a Salesperson. After two years if you continue to work with that broker you are still called an Agent. Only Managing Agents(Brokers) have a different title.
 In Colorado a Agent is called an Associate Broker, Managing Agent's are called Managing Brokers. We also have Independent Brokers. Which is just a Managing Broker who does not have any Associate Brokers working for them.

Shane

Matt DuSold · Answer

Thanks Steve for your help,

I like your advice a lot and was actually what I was thinking about. Now would I be able to wholesale some of these REO's of I find a great deal or would that become pretty sketchy?

Yeah I'm not exactly doing this for a quick fix, and Im not expecting to make millions from it. But it will be better and more fun then the mall job which I make on a good month like 700 dollars.(thank god I have a lot of money saved up) Im still living with a parent so I dont have any bills outside of gas and what not.

Steve L. · Answer

I have a license purely to help me as an investor.  But here is how I would start, if I was trying to start out at Real Estate:

1. Get your license and get in with an office so that you can get MLS access.  In this market your probably want to work for a large(ish) REO office as a "Buyer's Agent."

2. Start identifying properties that seem like good investments an go preview them yourself.  Do this for a while, until you get a feel for what is a good deal and what isn't.  Work the pre-listing in your office hard, you have an inside track on those.

3. In tandem, go the REI clubs and start building investor connections.  Offer to list investor owned properties for a discount and talk about some of the deal you've been looking at.  See what they're interested in and build a buyers list.

4.  You can also search for cash sales in the area.  This will give you an idea of the type of properties investors are buying in your area.

5.  After you have a feel for the local market, once a good deal pops up, call your buyers list and see if you can show them.  If no luck, post it on CraigsList with vFlyer:

"3/2 Cash Investor Deal" have a picture of the property.  Take people to see it and see if you can sell it.

When you get a call write their name and add them to your list.  After a while you should have a decent database.

Other Comments:

1. Call listing agents and offer to have an open house in their property.  I have let selling agents do this in my properties before.  No many investors, but it keeps you busy and you get connections.

2. Read the "Millionaire Real Estate Agent" by Gary Keller.  I just finished it, it is a great book.

3. Expect not to make money for 6-12 months... :(

Matt DuSold · Answer

Yeah I posted that a little too early Richard. haha. I saw in some states if you have a college degree you can go straight to being a broker but here in Arizona you need to have at least 3 years of experience, and be active 3 of the last 5 years.

To any agent, how did you start? I am assuming going to every real estate meet up and REIA is a good way. I think I would want to start with 5 or so people and do everything I can for them, or is that not the way to go?

Matt DuSold · Answer

OK. So then for what I am looking for, basically another income stream that can sustain a 22 year old dude until the investing gets going, being an agent and getting my standard "real estate salesperson license" is just fine?

Thanks for your help Sean.

Richard Warren · Answer

You can't just become a broker.  You must have a certain amount of experience as an agent, or salesperson, and have the required education.  It varies by state, just contact your state's real estate licensing division to see what the specific requirements are.

:cool:

Steve L. · Answer

All Real Estate companies who buy and sell properties need a broker.  Agents work for brokers and brokers typically sign all contracts.
          
          Some brokers do very little beyond that, but they almost always get a piece of your commission.  Can be as low as 5% and as high as 50% (or more in some cases).  
          
          Start as an agent and you can start working on your brokers license, but you don't need to go for the test if you don't want too.  There is probably 4-6 months of additional education involved (in California at least).

Sean Williamson · Answer

You will always have to worry about the people and you can work with investors each way you will have more direct access to to info as a agent  an agent is just a wholesaler that abides by rules and a agents liscence is held under a broker

Matt DuSold · Answer

Thanks Steve!

That was very helpful. It makes me want to get the Brokers license but I like your idea of waiting and working towards it. Thanks again for the help!