What's the difference between a broker and a salesperson?

Many people confuse broker and salesperson: however, the salesperson is the "agent" of the broker and the broker is the "agent" of the seller.

By law only a broker, who has passed a special exam to earn the designation, can receive a brokerage commission. A salesperson is associated with a broker. When a sales person represents a broker in a transaction -- rather that the broker working personally with the seller -- the broker splits the brokerage commission with the salesperson.

While we're defining roles, you should also know the difference between a "listing salesperson" and the agent -- either a broker or a salesperson -- who produces the buyer. The listing salesperson is the individual who works with you to market your home under a "listing agreement." Sometimes the listing agent also finds the buyer, but not always.

The agent who produces the buyer may be a "seller's agent" or a "buyer's agent." A seller's agent's legal obligation is to represent the interests of the seller because a seller's agent works as a "sub-agent" of the listing salesperson and is always paid by the seller. A buyer's agent represents the interests of the buyer. The buyer's agent's fee or commission may be paid by the buyer, the seller, or negotiated between buyer and seller. Regardless of whether the buyer is found by a listing salesperson, a seller's agent, or a buyer's agent, anyone with a real estate license is required by law to treat both the seller and the buyer fairly and ethically.

Your listing salesperson does not receive all of the commission from the sale of your house. Actually this commission is frequently shared by as many as four different parties -- two brokers and two salespeople -- depending on the nature of the transaction.

Although you may work personally with either a broker or a salesperson, we use the term "agent" interchangeably throughout the handbook for simplicity.

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