What Does a Real Estate Broker Do?
Understanding the Role of a Real Estate Broker
When you’re buying or selling a home, you may hear the term real estate broker frequently. But what exactly does a broker do, and how is a broker different from a real estate agent or Realtor®?
A real estate broker is a licensed real estate professional who has generally completed additional education, experience and licensing requirements beyond those required of a salesperson or agent. State requirements vary.
A broker may work directly with buyers and sellers, negotiate transactions, manage a real estate brokerage, and supervise other real estate professionals, depending on the state’s laws and the broker’s license.
At Netrealtynow.com, our principal broker, Thomas S. Hennerty, works directly with buyers, sellers and real estate investors.
What Does a Real Estate Broker Actually Do?
A broker can be involved in virtually every stage of a real estate transaction.
For Sellers
A broker can help:
- Determine an appropriate asking price
- Analyze comparable sales
- Develop a marketing strategy
- List the property in the MLS
- Market the property
- Coordinate showings
- Evaluate offers
- Negotiate price and terms
- Navigate inspections
- Address appraisal issues
- Coordinate with the title or settlement company
- Manage the transaction through closing
For Buyers
A broker can help:
- Identify properties
- Arrange showings
- Analyze market values
- Review comparable sales
- Prepare offers
- Negotiate purchase terms
- Navigate inspections
- Address appraisal issues
- Coordinate with lenders and settlement professionals
- Help manage the transaction through closing
A Broker Can Be Your Representative
One of the most important functions of a real estate broker is representation.
When a broker represents you, the broker’s responsibilities are governed by the applicable state laws and the agreement between you and the brokerage.
For example, a buyer may enter into a buyer representation agreement with a brokerage.
A seller may enter into a listing agreement.
These agreements establish the relationship between the consumer and the brokerage and explain important matters such as services, responsibilities and compensation.
Brokers Help Determine Property Value
One of the most important things a broker can do is help a buyer or seller understand what a property is worth.
A broker may examine:
- Recent comparable sales
- Current competing properties
- Location
- Property condition
- Square footage
- Lot size
- Improvements
- Market conditions
- Days on market
For sellers:
The objective is generally to establish a competitive asking price that attracts buyers without unnecessarily leaving money on the table.
For buyers:
The objective is to determine whether the asking price makes sense based on the market and the property.
Brokers Negotiate
Negotiation is a major part of real estate brokerage.
A broker may negotiate:
- Purchase price
- Sale price
- Closing date
- Inspection provisions
- Seller concessions
- Repairs
- Financing terms
- Appraisal issues
- Personal property
- Other contract terms
The best negotiation isn’t always about getting the lowest price.
It’s about achieving the best overall terms for the client, consistent with the client’s objectives and applicable law.
Brokers Help Navigate the Contract
Real estate contracts can contain many provisions that first-time buyers and sellers may not understand.
A broker can help explain the transaction and identify important deadlines and obligations.
Depending on state law, brokers may prepare or use approved forms and assist clients with transaction documents.
Important:
A real estate broker is not a substitute for an attorney.
For legal advice about a contract or a particular legal issue, you should consult a qualified real estate attorney.
Brokers Coordinate the Transaction
Once a property goes under contract, there can be dozens of moving parts.
A broker may coordinate with:
- Buyer
- Seller
- Other broker
- Lender
- Home inspector
- Appraiser
- Title company
- Settlement agent
- Closing attorney
- Insurance company
- HOA or condominium association
- Contractors
The broker helps keep the transaction moving toward closing.
What Does a Broker Do for a Buyer?
If you’re buying a home, your broker may help you from the initial search through closing.
Step 1 — Understand Your Goals
Price, location, property type and requirements.
Step 2 — Find Properties
Search for homes that fit your criteria.
Step 3 — Analyze the Property
Review comparable sales and market conditions.
Step 4 — Make an Offer
Develop an offer based on your objectives and the market.
Step 5 — Negotiate
Negotiate price and terms with the seller’s side.
Step 6 — Due Diligence
Help coordinate inspections and other transaction requirements.
Step 7 — Appraisal
Help address valuation issues if they arise.
Step 8 — Closing
Help coordinate the transaction through closing.
What Does a Broker Do for a Seller?
A seller’s broker may help with:
Pricing
Determine an appropriate listing price.
Marketing
Develop a strategy to expose the property to potential buyers.
MLS
Place the property in the appropriate MLS when included in the selected service.
Showings
Coordinate access to the property.
Offers
Analyze offers beyond simply looking at the purchase price.
Negotiation
Negotiate price and terms.
Contract
Help navigate the transaction after acceptance.
Closing
Coordinate with the various parties until the transaction is completed.
What About a Flat-Fee MLS Broker?
A Flat-Fee MLS broker provides a different level of service.
Instead of paying a traditional percentage-based listing commission for comprehensive representation, a seller may pay a predetermined fee for specific services.
Depending on the plan, the seller may handle more of the transaction themselves.
For example, the seller may be responsible for:
- Showing the property
- Negotiating directly with buyers
- Managing offers
- Coordinating inspections
- Handling some transaction responsibilities
while the broker provides the agreed MLS and brokerage services.
This can be a good option for experienced sellers who want MLS exposure and more control.
What Is a Full-Service Broker?
A full-service broker generally provides substantially more assistance throughout the transaction.
Services may include:
- Pricing
- MLS listing
- Marketing
- Showings
- Offer evaluation
- Negotiation
- Contract assistance
- Inspection coordination
- Appraisal assistance
- Transaction management
- Closing coordination
The exact services vary by brokerage and agreement.
Real Estate Broker vs. Real Estate Agent
The terminology varies by state, but generally:
Real Estate Agent/Salesperson
A licensed real estate professional who performs real estate activities under the applicable state licensing structure, often under the supervision of a broker.
Real Estate Broker
A licensee with additional qualifications who may have authority to operate or manage a brokerage and supervise other licensees, depending on state law.
Realtor®
A real estate professional who is a member of the National Association of Realtors®.
Realtor® is not a separate state real estate license.
Why Experience Matters
A real estate license alone doesn’t tell you how experienced someone is.
When selecting a broker, ask:
- How long have you been in real estate?
- How many transactions have you handled?
- Do you personally handle your transactions?
- Do you specialize in residential or investment property?
- Do you understand the local market?
- What services do you provide?
- How are you compensated?
Experience can be particularly valuable when something goes wrong.
A transaction that proceeds smoothly may require relatively little intervention.
But when you encounter:
Inspection problems
Appraisal problems
Financing issues
Title problems
Difficult negotiations
Contract deadlines
that’s when experience can make a significant difference.
What Does Thomas Hennerty Do?
Thomas S. Hennerty is the principal broker of Netrealtynow.com.
Tom has more than four decades of real estate experience and has worked as both a broker and real estate investor.
He is licensed in:
Florida | Maryland | Virginia | Washington, DC | New York
His experience includes:
- Residential real estate
- Multifamily
- Investment property
- Commercial real estate
- Buyer representation
- Seller representation
- Property acquisition
- Property disposition
- Negotiation
- Flat-Fee MLS
He has also personally purchased and resold numerous investment properties.
A Broker Who Understands Investing
A broker who is also an investor can bring an additional perspective to an investment purchase.
For example, when evaluating a multifamily property, an investor may look at:
- Purchase price
- Gross rental income
- Operating expenses
- Net operating income
- Financing
- Capital expenditures
- Vacancy
- Potential rent increases
- Future resale value
The question isn’t simply:
“Can I buy this property?”
It’s:
“Does this property make financial sense?”
Why Choose Netrealtynow.com?
Netrealtynow.com offers consumers different ways to work with an experienced real estate broker.
Buyers
Professional buyer representation
Property searches
Market analysis
Offer and negotiation assistance
Transaction management
Potential buyer rebate, subject to the applicable agreement and transaction
Sellers
Flat-Fee MLS
Full-support MLS services
Full-service representation
Marketing and negotiation
Transaction management
You Don’t Always Need the Same Level of Service
That’s an important part of our philosophy.
Some buyers want comprehensive representation.
Some sellers want to handle much of the transaction themselves.
Others want a professional broker involved from beginning to end.
The right real estate service depends on your needs.
Frequently Asked Questions
Is a real estate broker the same as a Realtor®?
No. A broker is a state license category. Realtor® is a membership designation associated with the National Association of Realtors®.
Does a broker work with buyers?
Yes. Brokers can represent buyers, subject to their license and applicable state law.
Does a broker work with sellers?
Yes. Brokers can represent sellers and provide listing services.
Can a broker negotiate the purchase price?
Yes, when representing a client and as permitted by applicable law.
Can a broker provide legal advice?
Generally, no. Brokers can explain real estate transactions within the scope permitted by their license, but legal advice should come from a qualified attorney.
Is a broker more experienced than an agent?
Not necessarily. A broker generally has additional licensing requirements, but experience varies considerably from one professional to another.
The Bottom Line
A good real estate broker does much more than put a property on the MLS.
A broker can help you:
Understand the market
Determine value
Develop a strategy
Negotiate
Navigate the contract
Coordinate the transaction
Get to closing
And when problems arise, an experienced broker can help you understand your options and keep the transaction moving.