What is the difference between the terms agent, broker, associate broker, and investment broker?
The first three are actual legal definitions through the Department of Real Estate and the California Association of Realtors. The fourth is a specific term I use for myself because I focus on investments, number crunching analysis and am unemotional about purchases to not be swayed by colors or a little remodeling to get a great deal for my clients. Who needs that drama anyway?
An agent is someone who is licensed by the State of California as having completed the minimum education required to sell real estate. – that reminds me of a joke my mom always likes to tell.
What do call the person graduating at the bottom of their medical class? A Doctor.
While there are some great agents (and Doctors) out there who do a fantastic job, there is no guarantee of anyone’s performance at any level. However, every person in the State of California is trained and must continue training to maintain their license. We all have the same core knowledge. Of course, as I always told my kids (we homeschooled all the way through high school), “Knowledge is knowing, Wisdom is doing.” How you apply that knowledge makes all the difference in the world.
A Broker has an education and experience component to being licensed. The agent can’t complete a transaction on their own without a Broker’s oversight whereas a Broker has demonstrated that they have the knowledge and experience to manage a transaction on their own. Kind of makes you think about really large offices. How much oversight can the agents really get to prevent a mistake that costs you thousands of dollars? Most offices have training and standards and procedures with a checklist of documents the broker requires for the agent to get paid. But the broker is in it to protect themselves. They are making money off of all the agents and while the laws are designed to protect the consumer, Brokers typically just do the minimum to ensure they don’t get sued and to maintain their image in the marketplace.
An Associate Broker is also a Broker and is able to complete a transaction on their own. However, for various reasons, they may “hang” their license with another broker. The actual Broker has ultimate legal responsibility for all licensees working with them, but there is more legal liability on an Associate Broker than an Agent.
A Real Estate Investment Broker is a distinction I make for me. My experience is quite broad in real estate and while any agent can sell commercial property and investments, they probably don’t have my experience to ensure it goes well. The biggest experience is one related to time. Anyone can be brilliant in a rising market like the early 2000’s. But how do you handle a downturn when the market gets tough? Experience is the best teacher. My mentor passed away in 2005 just before the downturn and I made some mistakes I NEVER intend to duplicate. It was a far harder teacher than head knowledge in a class or even guidance from a mentor. You don’t forget what happened and you learn how to avoid those problems.
My mentor told me about one of the agents they hired to sell Marina Pacifica when it was brand new (Long Beach condo complex of 500+ units). That agent knew the condos so well that they made an entire career out selling just those condos. They had the same experience repeated dozens of times over their career. And if I wanted to sell a condo in Marina Pacifica, I would definitely have them on my list to interview. However, buying or selling a house anywhere else – not so sure.
I like to continually learn and apply that knowledge. That is how I have sold more than $100MM in real estate and I can apply the “Big Boy” experience with developments to the smaller properties and can help you make better decisions to make more money in real estate.
We always prepare to prevent the problems, but when humans are involved, problems arise. If you want the extra experience from all sides of the transaction to protect you and get you out of any tough spots, then you really need to work with me. I am in real estate for the long term relationships and not just the transactions. I get paid on the transactions, but with a relationship and strategic planning, we can execute a long term wealth plan far better together, than apart.
However, if you don’t think you are going to encounter any problems with the property, marketing, title, paperwork, buyer or agents in the transaction – then any agent will do to complete the transaction.
Every heard the phrase “Famous last words”?
Call me and let’s grab coffee to start you on a path to real estate wealth.