A real estate broker is a real estate agent who has a broker’s license. The certified broker has the right to work as an independent professional, unlike a real estate agent who isn’t a broker.

Brokers can create brokerage firms (sometimes also called simply “real estate companies”) to employ real estate agents.

However, in some areas throughout the US, agents are often called a brokers, even if they don’t hold a broker’s license.

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The difference between a real estate agent and a broker starts with the licensing level. A real estate agent is anyone who has earned a real estate license. A real estate broker has earned a broker’s license in addition to the underlying real estate license.

Note: A ‘Realtor®’ designation is earned through the National Association of Realtors and can be earned by either an agent or broker.

While the regulations vary by state, new agents are generally required to work under the supervision of licensed brokers before they can go out on their own.

The broker commission is a percentage of a property’s final selling price that is paid to the brokers involved. The commission rate varies by location and brokerage, but the average figure is 6% in the residential sector, and about 4-8% for commercial deals.

The listing agent typically splits the commission with the buyer’s agent. But if the agent works for a brokerage firm, they will have to share a portion of their commission with the company.

The fees can vary based on the number of agents involved. If, for example, the listing agent finds a home buyer that is not using the buyer’s agent, they might only charge the seller 3% instead of 6%.

“Real estate companies” is a term that is most often used interchangeably with “brokerage firms”. They help homeowners find buyers for their homes acting as middlemen and representing their clients’ interests. This includes helping the seller get a higher offer.

Companies that buy houses are formed by real estate investors who purchase properties directly from homeowners. Some real estate investors act like middlemen too: they sign a purchase contract and sell it to another investor before the closing date (this model is called ‘wholesaling’). But they never represent the homeowner’s interests as a selling agent.

However, some brokers can buy a client’s property (at a reduced price) if it doesn’t sell. In such a case, the brokerage firm acts, in effect, as a real estate investor.