What is the primary difference between a "broker" and an "agent"?

The primary difference between a "broker" and an "agent" lies in the levels of licensing and the responsibilities that each position entails. A broker holds a higher level of licensing compared to an agent, which typically requires additional education, experience, and a passing score on a more comprehensive exam. This elevated status allows brokers to operate independently and establish their own real estate firms, while agents generally work under the supervision and authority of a broker.

The higher licensing requirements for brokers are designed to ensure they possess a deeper understanding of real estate laws, ethical practices, and business operations. This knowledge equips brokers to manage agents, guide transactions, and ensure compliance with legal regulations.

In contrast, the other statements about agents working independently, brokers operating under agents, and the commission rates for agents do not accurately reflect the structure of the real estate industry. Agents typically do not work independently as they must have a supervising broker to operate legally. Similarly, brokers do not work under agents; rather, agents work under brokers. The commission structure also does not inherently differ by position but can vary depending on agreements and market practices.