HOME BUYING
From Listings to Living
You have been texting with the same agent for three weeks. Then the listing agreement or buyer agreement arrives, and the party signing it is not her. It is a company name followed by the word "Broker," and the commission clause says the fee is payable to that company. If something goes wrong, who is actually on the hook?
So what is a real estate broker? A broker is a real estate licensee who has met higher education and experience requirements than an entry-level agent and may run a brokerage, supervise other licensees and take responsibility for their transactions. Agents, called sales agents in Texas and salespersons in California, cannot work on their own. They practice under a sponsoring or responsible broker, and the brokerage, not the individual agent, is the party that earns the commission and is responsible for supervising the agent.
That structure matters to you as a client in three practical ways: your contract is with the brokerage, the commission flows through it, and the broker's rules decide what happens when one firm ends up on both sides of your deal.
Leevli Editorial Team
It helps to picture three relationships running at the same time in any sale:
Firm size changes how this feels. A broker-owner with no agents is both the broker and the person showing you homes. A large franchise office may put one managing broker over dozens of agents, and you may never meet that person unless something goes wrong. Teams add a layer: a team leader may run your deal day to day, but the team still practices under the brokerage's license. When a complaint reaches the state real estate commission, the licensed agent and the supervising broker are the ones who answer for the work.
Every state licenses real estate practice, and every state draws the line between agent and broker a little differently. The real estate broker vs agent distinction follows the same pattern almost everywhere, though the titles change:
| Tier | Common titles | What the license allows |
|---|---|---|
| Entry level | Sales agent, salesperson | Represents clients only while sponsored by or working under a broker |
| Broker | Broker, individual broker, independent broker | Can practice independently, open a brokerage and sponsor agents |
| Supervising broker | Managing broker, designated broker, employing broker | Runs an office or a corporate brokerage and is accountable for the licensees in it |
Some states add the third tier as its own license; others treat it as a role a licensed broker takes on. One naming trap: in some states the entry-level license itself is called "broker," so the word on a business card does not always mean the person can run a firm. The state agency's license lookup shows the actual license type.
The Texas Real Estate Commission's page on becoming a sales agent requires 180 classroom hours of qualifying courses and states that a sales agent must be sponsored by a licensed broker to perform any act of real estate services. An agent without a sponsor holds an inactive license.
To become an individual broker in Texas, an applicant needs at least four years of active experience as a licensed sales agent or broker during the 60 months before applying, with experience totaling 720 points. The education requirement is 270 classroom hours of qualifying courses plus 630 hours of related courses, which must include the six-hour Broker Responsibility Course. So if you are buying in Austin, a broker applying today needs four years of active licensed experience before taking on that role.
California's Department of Real Estate requires three college-level courses for a salesperson license, and a salesperson without a responsible broker may not perform acts requiring a real estate license. For a broker license, the DRE's page on broker requirements lists eight college-level courses, including Real Estate Practice, Legal Aspects of Real Estate, Real Estate Finance and Real Estate Appraisal. The experience requirement is two years of full-time licensed salesperson experience within the last five years, or equivalent experience. A four-year degree with a major or minor in real estate can substitute for the experience. Then the applicant must pass the state broker exam.
| Requirement | Texas broker | California broker |
|---|---|---|
| Licensed experience | 4 years active in the prior 60 months, 720 points | 2 years full time in the last 5 years, or equivalent |
| Education | 270 qualifying hours plus 630 related hours | 8 college-level courses |
| Degree substitute | A bachelor's degree can cover up to 300 of the related hours | A four-year degree with a real estate major or minor can replace the experience |
| Exam | State broker exam | State broker exam |
Those are two states among fifty. If you are buying in San Diego, the California rules apply; anywhere else, check your own state's real estate commission for its broker license requirements.
A broker who sponsors agents is running a regulated business, and the work goes well beyond selling houses:
The brokerage also keeps the MLS accurate. When you go under contract, the listing broker is responsible for updating the status; our article on pending vs under contract explains what each status means for buyers still watching the house.
Some brokers never sell homes at all. Rental and property management work can require a broker license: California's definition of a broker includes collecting rents for others, as our guide to HOA and property management notes. Community association management is often regulated separately; our explainer on HOA management companies covers that role.
Commission is negotiated in the listing agreement or buyer agreement and is not set by law. At closing, it is paid out of the transaction to the brokerage, which then pays the agent under their separate agreement. Texas makes the chain explicit: under Occupations Code 1101.651, a sales agent may not accept compensation for a transaction from anyone other than the sponsoring broker, and may not pay a commission to anyone except through that broker.
Here is the flow with invented numbers, labeled as illustrative only:
| Step | Illustrative amount | Who receives it |
|---|---|---|
| Home sells for $450,000; the seller agreed to pay a listing fee of 2.5 percent | $11,250 | Listing brokerage |
| The buyer's agreement sets a 2.5 percent fee, paid by the seller as a concession or by the buyer | $11,250 | Buyer's brokerage |
| Each brokerage pays its agent under their split agreement, say 70 percent | $7,875 per agent | Each agent |
| Each brokerage keeps the rest for overhead, supervision and profit | $3,375 per firm | Each brokerage |
Real fees and splits vary widely, and some agents pay their broker a flat monthly fee instead of a percentage. Since the 2024 changes to how buyer agent pay is offered, who pays the buyer's broker is itself negotiated; our guide to whether closing costs include realtor fees covers where commission shows up on the closing documents. Our guide to rolling closing costs into a mortgage explains why commission is a transaction cost rather than a loan cost, and who pays closing costs, buyer or seller lays out the full split.
Because agreements belong to the brokerage, a firm can end up representing the seller and the buyer in the same sale even when two different agents are involved. States handle that conflict very differently, which is why "dual agency broker" questions have no single national answer.
The trade-off is the same everywhere. A dual agent or intermediary cannot advocate for your price against the other side. If you want undivided advocacy, say so in writing before you tour the firm's own listings.
"REALTOR" is not a license level. It is a membership mark of the National Association of REALTORS, and NAR's logo and trademark rules say only members of NAR can call themselves a REALTOR. A sales agent can be a REALTOR; a broker can choose not to be. Membership comes with NAR's Code of Ethics, but it does not change what the state license allows.
The answer to "what is a real estate broker" also tells you whom to call when an agent stops responding: the broker who supervises that agent. Most buyers find an agent first and inherit the broker. Reverse the check before you sign:
For interview questions and how buyer agreements work after the NAR settlement, see our guide to choosing a real estate agent for buying a house. A broker cannot give legal advice; if a lease or deposit dispute is part of your move, a landlord tenant attorney is the right professional. And for how a particular brokerage actually performed in a building, ask the people who bought and sold there on Ask a Resident.
Brokers and agents are judged by how deals in a specific building went, which only owners there have seen up close.
Listings show the property, but they rarely explain the lived reality around it. On Leevli, a mover can explore the city, review neighborhood and building information, and ask a verified resident the specific questions that remain unanswered. That human layer helps readers know what to investigate before signing a lease, making an offer, or choosing between two addresses.
A real estate broker is a licensee who has met higher education and experience standards than an entry-level agent and can run a brokerage on their own. Brokers sponsor and supervise agents, sign or accept listing and buyer agreements through the firm, and receive the commission. Agents must work under a broker, so every agent you meet has a broker behind them.
An agent, called a sales agent or salesperson in many states, needs a sponsoring broker to practice and cannot run a firm. A broker can work independently, open a brokerage and supervise agents. Brokers need more training: in Texas, four years of active licensed experience in the prior 60 months, and in California, eight college-level courses plus two years of experience or an equivalent.
They vary by state. Texas requires 270 hours of qualifying courses, 630 related hours, four years of active licensed experience in the prior 60 months totaling 720 points, and a state exam. California requires eight college-level courses, two years of full-time salesperson experience in the last five years or an equivalent, and a state exam. Check your state commission for its current rules.
Because of the experience rules, it usually takes years, not months. In Texas, the minimum is four years of active practice as a licensed sales agent within the five years before applying, plus 900 total education hours, up to 300 of which a bachelor's degree can cover. In California, it is typically two years of full-time salesperson experience within five years, unless the applicant has a qualifying four-year real estate degree or equivalent experience.
The seller, the buyer or both agree to a fee in a listing or buyer agreement, and the fee is paid to the brokerage at closing, usually from the sale proceeds. The brokerage then pays its agent under a separate split or fee arrangement. In Texas, an agent may legally accept compensation for a transaction only from their sponsoring broker. Fees are negotiable and not set by law.
It is a brokerage that represents both the buyer and the seller in the same sale, often through two of its own agents. Rules differ sharply by state. Florida prohibits dual agency and uses transaction brokers instead. Texas allows a broker to act as an intermediary only with written consent from both parties. Many states allow dual agency with informed written consent.
No. REALTOR is a trademarked membership term owned by the National Association of REALTORS, and only NAR members may use it. It says nothing about license level. A sales agent who joins NAR is a REALTOR, and a licensed broker who does not join is not. The license level comes from the state, so check the state lookup.
Search the name on your state real estate agency's public license lookup, which shows the license type and whether it is active. California's Department of Real Estate also publishes disciplinary actions. A common mistake is checking only the agent; check the brokerage and the supervising broker too, and confirm the license is active rather than expired or inactive.
Start with agents who close deals in your target area and property type, then look up the broker behind them. Ask how the firm handles in-house deals, who supervises the agent, and whether the brokerage lists many homes you might want, since that raises the chance of dual agency. Residents in buildings you like can tell you which firms handled recent sales.
An agent can change firms, but your listing or buyer agreement is normally with the brokerage, so it usually stays with the original broker unless that broker agrees to release or transfer it. Ask in advance what happens if your agent leaves, and read the agreement's termination clause before you sign.
This article is informational and does not constitute legal, financial, tax or insurance advice.
