What Does a Real Estate Broker Do During a Transaction?


A real estate broker is a person who oversees real estate transactions and often owns a real estate firm. This firm, known as a brokerage, hires real estate agents, who then go out and negotiate with buyers and sellers for the broker.

A broker has higher qualifications and additional licenses compared to a traditional real estate agent. Real estate agents also can’t carry out transactions without a designated broker being present. A broker can make money through commissions, as well as through other products and services they offer.

Even though many brokers own their brokerages, some work under other brokerages as well.

Who is a broker?

A broker is someone who the state has licensed to sell and buy properties and carry out transactions on behalf of the buyers and sellers. To become a broker, an individual needs first to become a licensed real estate agent.

This includes hours of coursework, as well as passing qualifying exams and working under a broker. After becoming a real estate agent, individuals can undergo additional tests and do more coursework to become brokers. A broker has more qualifications, knowledge, as well as responsibilities when compared to a real estate agent.

Although many people get confused between the roles and responsibilities of a real estate agent and a broker, real estate agents work for brokers.

A broker may or may not operate their brokerage. While many brokers do have their own brokerages, some also choose to work as independent brokers. Even if a broker does have their own brokerage, they can still have their own clients and do their own real estate transactions. A real estate agent does not have the legal authority to perform any real estate transactions.

All real estate transactions have to take place in the presence of a specific kind of broker, the designated broker. A broker also mediates when conflicts appear between real estate agents and buyers and sellers.

A broker can be of two types, the broker-owner and the broker-associate. Although they have the same level of knowledge and licenses, a broker-associate can end up working for a broker-owner.

The difference between a broker-owner and a broker-associate

Just like the name suggests, a broker-owner is someone who owns their own brokerage. Alongside their duties as a broker, they must also perform additional responsibilities related to managing their brokerage. This includes recruiting new real estate agents and overseeing any transactions real estate agents under them make.

A broker-associate is someone who works under a broker-owner but has more qualifications than a real estate agent. A broker-associate has the capabilities and licenses necessary to become a broker. However, after receiving their stuff, they opted to work for an existing brokerage. This, however, doesn’t mean that they can oversee any transaction that a real estate agent working in the same brokerage makes.

A broker can choose to work as a broker-associate before going on to start their own brokerage. This allows them to get the experience they need before starting their own business.

A broker-associate, who works under a broker-owner, is somewhat limited in what they can do. For example, they can’t partake in or oversee any real estate transactions. Real estate transactions can only happen in the presence of a designated broker.

Who is a designated broker?

A designated broker is an individual who has been given the authority to ensure that real estate transactions can take place before them. This is usually the broker who owns the brokerage. However, sometimes, another broker who works for the brokerage may be selected as the designated broker.


The role of the designated broker is to ensure that all real estate transactions proceed smoothly. They bear the legal responsibility associated with each real estate transaction. This means that if any real estate agent makes a mistake or does something illegal during the course of the trade. Then that mistake would reflect on the designated broker. For this reason, brokerages are extremely careful when hiring and recruiting new real estate agents.

One of the essential duties of a broker-owner, in fact, is to look out for talented real estate agents. They can also recruit brokers, who go on to work as broker-associates, under them.

What is the role of a broker?

A broker has two layers of responsibilities. On the one hand, they have to perform the role of a traditional broker. This involves negotiating with clients, buying and selling properties, facilitating real estate transactions, and more. On the other hand, a broker also must ensure that all compliance laws are being followed, handle paperwork, recruit new real estate agents, and more.

A broker’s traditional role

A broker is responsible for putting up listings that indicate that properties are for sale. They can use local as well as internet listings to list properties. Brokers nowadays also use social media to get the word out about properties for sale.

Brokers are also responsible for showing these homes to potential buyers and then negotiating transactions between buyers as well. It’s the broker who writes up the contract related to the buying and selling of properties. Finally, a broker is also responsible for facilitating real estate transactions.

The broker’s role in a brokerage

When a broker-owner starts their own brokerage, then they assume specific additional responsibilities as well. One of the most important of these is recruiting new real estate agents to work for them. The success of a brokerage depends on the success of the real estate agents that work there. For this reason, broker-owners are especially careful when looking for new real estate agents to recruit.

A broker is also responsible for negotiating contracts with the real estate agents they hire. Aside from this, a broker-owner also has the responsibility of ensuring that compliance laws are maintained. They also have to establish escrow accounts and oversee all office operations. A broker-owner may also hire people who can help them with their daily administrative tasks and office operations.

Finally, it’s also the job of a broker-owner to mediate any conflicts between real estate agents or with a buyer or seller. A broker-owner is also responsible for lead generation, that is, bringing in new clients. A broker-owner has the responsibility both of knowing what the fair housing and environmental regulations in the area are and then ensuring they are met.


From approving paperwork to bearing legal responsibility for all the transactions in their brokerage, a real estate broker has a lot of roles to play. They are responsible for recruiting new real estate agents, getting clients, and ensuring that all compliance laws are met.

Not all brokers own their own brokerages, but many do. Brokers who run their own brokerage are known as broker-owners. Those who work for other brokers are known as broker-associates. Real estate transactions can only be performed before the designated broker, usually the broker-owner in a company.

The designated broker bears the legal responsibility for all transactions in the brokerage. This can be dangerous, and brokers can get sued if there is a mistake. For this reason, why not consider real estate broker insurance?


Real estate broker insurance can provide a layer of financial protection, allowing you to perform your duties as a broker without worry. If you want to learn more about real estate broker insurance, thenĀ click here.


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