Real Estate Agent VS Broker: What’s The (Legal) difference?
In 2018, the National Association of Realtors had a total of 1.36 million active members. That’s an increase of 50,000 members from the previous year!
California alone is home to almost 205,000 real estate agents. The state also has more than 95,000 active brokers in operation.
As a home buyer or seller, you’re likely thinking of hiring one of these professionals. This is a wise idea, especially since tricky and complex laws govern real estate transactions.
But first, you need to know the difference between a real estate agent vs broker. Not only are these titles not interchangeable — the responsibilities themselves differ, also. What’s more, there are legalities involved in who can claim each title.
Don’t worry though, as this post covers the most important differences between the two. Keep reading so you know which real estate agent professional to hire and team with.
Real Estate Agent vs Broker: Who’s the Boss
So, what is the difference between a real estate agent and a broker?
Some real estate agents are also brokers, but not all real estate agents can work as brokers. Brokers can work as agents, but most of the time, they have other agents working for them. Under law though, all real estate agents need to work for a broker.
That said, even if you hire a real estate agent, you’re pretty much working with a broker too. For real estate agents to be legal real estate professionals, they should report to a broker.
In short, brokers are the boss of real estate agents, and they can also be their own boss. Many brokers run their own independent firms, or they hire other licensed agents.
Breaking It Down Further: Who Real Estate Agents Are
A real estate agent is a real estate salesperson with a license. The law requires them to work for a real estate broker. That means they can’t work alone or as an independent party.
What It Takes to Become One
There are strict educational requirements before one can become a real estate agent. Most states require applicants to complete real estate pre-licensing courses. The number of hours for these required courses also vary from state to state.
Some states also need applicants to have finished real estate college-level courses. California, for example, requires applicants to have finished three of these courses. In Illinois, an applicant needs to at least have a GED or finished high school.
Only after meeting these requirements can applicants take the real estate licensing exam. Once they pass the test, then they can get their license and start offering their services.
What They Do
Most home buyers and sellers have more direct contact with real estate agents. That’s because these salespersons represent buyers and sellers, working on their behalf. They deal with price negotiations, transaction management, and even marketing for home sellers.
Agents are also the real estate experts who give buyers a tour of homes for sale. For selling clients, their role involves generating prospects and buyer leads. They handle open houses and answer general inquiries about properties for sale.
Real estate salespersons should also have some knowledge of legal matters surrounding properties. But when it comes to dealing with actual documents and agreements, you need a real estate lawyer.
The Boss is Here: The Lowdown on Real Estate Brokers
We’ve established that the key difference between a broker vs agent is that the former is the boss of the latter. Or in some cases, a broker can legally serve as your real estate agent too.
But, that’s not all. Brokers have often undergone more extensive real estate education and training. In fact, this is a legal requirement in some states, including California, Florida, and New York.
Greater Level of Education and Training
Let’s use California as an example again.
Real estate agents there should have completed 135 hours of the pre-licensing courses, whereas brokers should have finished 360 hours of these courses. That’s more than twice the amount of education and training.
Also, before someone can become a broker, they should have worked as a real estate agent first. How long depends on the state they operate in. In CA, FL, and NY, they should have worked as agents for at least two years before they can take the broker exam.
Speaking of which, broker applicants need to pass two exams. First, the real estate licensing exam, and then the broker exam. The broker exam is also more difficult than the licensing exam for real estate agents.
The Duties of a Broker
Brokers can also do the same things as agents, but they have more on their plate, especially if they run their own broker firm.
Brokers manage all agents under them, maintaining ethical and legal practices. They train agents and resolve issues between them and clients. They provide leads to their agents, carry out marketing for the firm itself, and keep records.
Reputable real estate brokers also often maintain a network of legal contacts. If you need help finding a closing attorney, a broker can recommend or refer you to one. They can also help you establish an escrow account and even manage your properties for you.
For a more detailed list of broker duties, you may want to check this article by BrokerBreakUp. It can help you further understand what exactly brokers can bring to the table.
Hire a Real Estate Agent or Broker?
One of the biggest advantages of hiring a broker is their more in-depth knowledge. They often got more experience under their belt, which is a plus if you’re facing a complex real estate case. For instance, having a lien on a property you want to sell or dealing with a foreclosure.
But this doesn’t mean they’re always the best choice, especially if they run a brokerage firm. Because brokers have other agents to manage, that may limit the time they work with you in person. And since they’ve got more training (and two licenses), they often charge higher.
If you want a more personal home buying or selling experience, you may want to go with an agent. Do the same if you’re worried about the higher broker fees.
But also consider how a broker can sell your home for a much higher price. They may ask for a bigger commission than an agent, but it may be small compared to what they can sell your house for.
Choose Who You’re More Comfortable With
Now that you know the real estate agent vs broker difference, it’s up to you who to hire. Explore your options and make sure you choose someone you’re comfortable with.
Remember, home buying and selling can take weeks, even months. Selling alone can take up to 65 days on average. So, you want to work with a real estate professional you can stick with for that long.
Looking for more property-related advice? Then be sure to check out our Real Estate section for more guides and tips!
Got Property in the Probate Process? Here’s a Step-By-Step Guide
The word “probate” is a legal word derived from the Latin term “probare” which essentially means “to prove.” And while most legal matters are matters proven in court, the probate process in America is one that is all about proving some number crunching. The very first probate court in America launched in 1784, to provide for a court that existed solely to determine what assets were proven and then divided after death.
Probate court can be a lengthy and confusing process. If you have property in probate right now, eliminate some confusion by getting everything you need to know about the probate process right here.
What is the Probate Process?
In a nutshell, the probate process is the legal process that proves an individual’s assets and determines asset division upon their death. In many cases, a will is in place and this is the document that will serve as the law or ordaining legal principle that makes those determinations.
Once someone dies, the executor advises descendants of their expected inheritance. But even in the simplest of situations, a legal process generally has to occur before they will get their stake of a will.
And in some situations, a will does not exist, nor does an executor. So a probate court appoints someone to direct the assets, to mitigate squabbles and battles over anything from money to the family spoon used at Christmas.
First, the will is proven in court, and then the assets and liabilities are paid or expunged. The property appraisal occurs, and debts or taxes get paid from assets.
Once that process is complete, the remaining assets are divided among descendants. The entire process can take anywhere from a few months to a few years.
Does All Property Go Through Probate?
This process of waiting until probate is over to receive inheritances is the standard one. But there are many ways to access property before probate is over.
In some cases, a cash amount may be released for the short-term while probate proceedings go on.
And not all property must go through probate in its entirety.
In the state of California for example, as much as $100,000 in property can be passed to descendants without probate.
Putting property in trust also allows you to avoid the probate process on those assets as well. A good probate lawyer can help you determine how to do this before you even prepare your will or estate plan.
If you already have property in probate, avoiding it at this point is not possible, and that’s why you need a good lawyer to help.
If the estate is not complicated, you may be able to go through a simplified probate process in your state. Or at the very least, you may be able to get some short-term funding approved for release before the probate process is complete.
Spare Your Loved Ones. Probate.
As many as 55 percent of Americans do not have an estate plan or will.
This is why the probate process can take as long as two years to complete. Register today to get access to a comprehensive list of lawyers willing to help make the probate process easier for you.
Tips to Avoid Home Repossession or Foreclosure
House repossession can be one of the most traumatic challenges your family ever has to face. Taking every step you can to avoid this problem is an excellent idea. This article will explain the details of the repossession process and show you where and how you can take action to avert it. Whether you have already fallen into arrears or you are just beginning to struggle with your mortgage repayments, the advice provided here can help.
Repossession Defined
The basic mechanics of a mortgage include the understanding that the lender who helps you buy your home has partial ownership of the property until your loan is fully repaid. Failing to meet your mortgage contract’s repayment obligations could place you in arrears and entitle your lender to repossess your home. If repossession of your house proceeds, your lender will evict you from the property and then sell it in order to recoup the outstanding debt on your mortgage.
Avoiding Repossession
All of the circumstances leading to repossession will be spelled out in your mortgage contract. While the specifics can vary from loan to loan, in all cases, repossession only becomes a danger if you miss mortgage payments or fall into arrears. This makes it vitally important to respond to your mortgage provider if they start contacting you regarding payment problems. Remember that repossession is always a lender’s last resort; they will pursue other means of settling your debt before resorting to court action. Review the specifics involving arrears and repossession in your mortgage contract and remain aware of them. Lenders most often set the line for repossession at missing four payment instalments. Be aware that this is NOT a universal figure, though! High-risk lenders can and often do write more stringent contracts. Some contracts allow lenders to start foreclosure proceedings if you miss as few as two payments.
If repossession does become inevitable, you still have a step you can take to reduce the cost and stress of the process: voluntary repossession. Prior to repossession, your lender must give you the opportunity to sell your home. This may not be possible, as many properties in this situation have negative equity and are thus unattractive to buyers. If you choose to go through voluntary repossession, you can stop your mortgage payments, move out of the property of your own volition, and turn it over to the mortgage lender. So long as you have satisfactory accommodations arranged, this spares you from the hassle of trying to sell the property yourself.
Stopping the Repossession of Your Home
When you start getting notices about arrears and foreclosure from your lender, you still have time to avert repossession. Here are steps worth taking:
- Talk to your lender: As mentioned above, taking you to court is your lender’s last resort. This is not a matter of commercial policy but an actual legal guarantee. Your lender has an obligation to discuss your financial situation with you and at least provide the opportunity to pay your arrears. Note that your lender is also required to provide a full and accurate accounting of your payment history going back at least two years.
- Modify the terms of your mortgage: One of the options to discuss with your lender is the possibility of changing the terms or details of your mortgage. Restructuring your payment obligations, extending the mortgage term, capitalizing the arrears, or even negotiating a break in your repayment schedule are all possibilities.
- Pay towards your arrears: Any money you can put towards your arrears demonstrates your good faith intent to meet your mortgage obligations. Even if you don’t have the resources to pay in full, partial payments improve your relationship with your lender. They may also be counted in your favour if your lender does end up taking you to court.
- Start renting your home: Additional income can help ease the financial burden of a mortgage, and you may be able to get some by renting all or part of your property. Check your mortgage contract; you may need to get approval from your lender to do this. Remember that you also need to account for the tax obligations of any extra income.
- Seek financial assistance: A range of different circumstances may entitle you to benefits or other help. Unemployment, health problems, and low income are all potential qualifications. After you claim benefits, you may be able to secure additional help via support for mortgage interest and/or universal credit help with housing. You should keep your lender fully informed about applications for financial help. They should not start court action if you have a good chance of receiving assistance.
- Check your insurance: Certain financial difficulties, like illness, injury, or redundancy, may actually be covered by insurance. Consult your lender and see if you have mortgage protection insurance. This form of insurance covers your mortgage expenses if you lose access to a stable form of income; most policies pay out 125 percent of mortgage costs.
How Repossession Works
The first step in the repossession process begins with written notification from your lender regarding arrears. This is the ideal stage for negotiation with your lender. The process can be stopped here if you come to a mutually agreeable arrangement. If your lender is not satisfied, they will progress to issuing a second warning in advance of court action.
Without any alternative arrangements, your lender will then apply for a court order to repossess. Applying for the order costs your lender £325, and they must explain why they should be granted possession of the property. An alternative here is an accelerated possession order, which is slightly more expensive (£355).
The matter will be decided by a judge in a court hearing. You will receive advanced notification of the hearing date. You also have to fill out the defense form provided by the court. If things progress to this stage, getting legal advice is a good idea.
The judge’s verdict will be based on evidence provided by both you and your lender. The typical options available to the judge include deciding in favor of repossession, issuing a suspended possession order, adjourning the case, or dismissing it entirely.
If a possession order is granted by the court, you will receive a fixed amount of time (usually 28 days). The judge may extend this up to 56 days in special circumstances. Paying the court costs usually becomes your responsibility, and your lender typically adds these to your already-outstanding debt.
If you fail to meet the obligations set out in court (either vacating the property or meeting a repayment agreement), you will be removed by bailiffs. This requires another court action by your lender – securing a repossession warrant. Once eviction by the bailiffs is scheduled, you will be notified of the scheduled date in writing.
After you leave, your mortgage lender will sell the property. You continue to accumulate interest on your outstanding mortgage debt until the property is sold to a new owner. When the property is sold, the lender uses the proceeds to account for your debt. If there is more money left over, you receive it. If the sale does not cover your debt completely (a more likely scenario), you will still need to pay the balance to your lender.
Stopping Repossession with a Quick House Sale
If you’re facing repossession and you know you don’t have the resources to clear your arrears or repay your mortgage, it may be time to sell your home. If your home currently has negative equity, you need your lender’s permission to sell. A quick home sale will unlock your equity, but it can be hard to arrange. You need an estate agent and solicitor, and finding a willing buyer may take months. This process can be expensive, too.
When Do You Need Real Estate Lawyer Services?
“Do I need real estate lawyer services?”. The eternal question that bothers many potential home buyers.
If you fall into this category you would ideally have already identified an area you’d like to reside at. An area whose properties are certainly commensurate with your financial abilities.
Chances are you’ve already hired a real estate agent to do your bidding but the question still lingers. This article strives to answer that very question.
What Is Real Estate Lawyer?
A request for the description of a real estate lawyer would inevitably be followed by the question, “What do real estate lawyers do?”.
A Real estate lawyer is a lawyer whose specialty lies in handling all legal issues pertaining to property. The scope of his/her services encompasses a handling of the documentation used in real estate agreements.
Such documents include transfer documents, mortgage documents, purchase agreements, title agreements et al. Real estate lawyers can represent individuals seeking to buy property as well as organizations selling property. It’s also not uncommon for real estate lawyers to assist buyers in closing a deal.
Do You Need Real Estate Lawyer Services?
Real estate transactions can be a costly affair and the temptation to seek drastic ways to cut costs is a strong one. One way of doing so is by taking up a do-it-yourself approach to avoid the additional cost of real estate attorney fees.
An example of such an attempt can be observed in the use of self-help legal documents. You can certainly be successful going it alone but one shouldn’t expect it to go well every time, especially when there are regulations to contend with or the complex nature of a transaction is out of your scope of expertise. In such scenarios, bringing a lawyer on board would be a necessary thing to do.
Situations that warrant the need for real estate lawyer services include;
1. When the Law Requires You to Do So
There are certain states that require you to hire legal services in all real estate transactions. You can, therefore, expect that any transaction done without the involvement of a licensed lawyer to be rendered unlawful.
The degrees of involvement differ from state to state. States such as North Carolina, New York, Delaware, South Carolina and Georgia require lawyer involvement at all stages. Thus, your lawyer will be involved the title review part of the transfer process all the way to when you sign the documents.
Alabama, on the other hand, limits real estate lawyer services up to the drafting of legal documents. A common factor in all these states is that the client (buyer or seller) reserves the right to choose his legal representation. The same privilege extends to individuals seeking a real estate lawyer in Houston.
2. When the Financial Stakes Are High
It would be prudent to hire a real estate lawyer in major transactions with high financial stakes.
Your first concern in such a situation is whether or not the property is in prime condition.
A real estate lawyer will bring a home inspector on board to ascertain whether the property is in top shape. He/she will also handle any renegotiation needed in case issues are found after the inspection.
Real estate lawyer services also extend to the liens, judgments and encumbrances that property is subject to. A lawyer will ensure none of these issues pass on to you upon completion of the transaction.
3. When the Transaction Is Complex
Complex issues in real estate effectively ensure you have no choice but to hire a real estate lawyer. You otherwise, place yourself in the precarious position of being out of your depth.
A lack of expertise only leads to poor judgment. Examples of complex issues include:
- Historical property
- Zoning disputes
- Beachfront property
- Gas and oil rights
- Preserved Property
- Real Estate subject to an easement
- Riparian disputes
Hiring a lawyer more often than not proves to be the wise decision for those who’ve found themselves in such a position. The cost of real estate lawyer fees pales in comparison to the losses you could incur in case of a major conflict later on.
The preventive measures that can be performed by a lawyer extend to the review of ancillary and title documents. A transaction can, therefore, proceed in the knowledge that all documents abide by state and federal regulations.
4. When the Stress Involved Is Too Much
There are situations when the sale of property might be too stressful for the parties involved in a transaction. Take the example of a transaction that is forcefully made because the seller is in financial straits; or a sale where the property in question belonged to a deceased relative.
When emotions are running high the odds of making financially sound decisions are not high. A need to finish the transaction quickly makes a person act rashly.
Hiring a real estate lawyer brings a sober-minded party to the transaction. He/she will negotiate the sale for you so that you’re able to get the best possible deal.
5. When Disputes Arise During the Transaction
The need for real estate lawyer services might at times be required when the transaction has already begun. The hiring could be prompted when a dispute arises or the risk of litigation is imminent.
A disagreement over the terms of a transaction could easily escalate if a party feels it’s been treated unfairly. A lawyer will conduct negotiations and introduce amendments to rectify the unfairness for his/her client. The intervention of the lawyer will also ensure that the terms agreed upon are favorable to all parties.
How Do You Find the Real Estate Lawyer You Are Looking For?
Finding excellent real estate lawyer services within your area can sometimes prove to be a difficult task. It could be that you’ve moved to a new area and can no longer use the real estate lawyer you used before.
Should you find yourself in such a predicament you can certainly count on us to help you out. Simply visit our directory and browse the real estate lawyer listings and you’ll be one step closer to finding the real estate lawyer you need. Contact us today in case of any inquiries.
