What does a real estate broker do? Do they share the same responsibilities as a property owner or landlord? Whichever role you assume, you must understand your function and the duties you are obliged to fulfill.
In this article:
What Does a Real Estate Broker Do? Answered!
There are plenty of lucrative opportunities in real estate, which is why many investors choose to spend their money on properties. But, real estate sales and management are not as easy as they seem on the outside. In truth, it involves a number of parties — from real estate brokers to landlords and property owners. To stay on the right side of the law, you must attain a deeper understanding of the differing responsibilities of these three occupations.
All About Real Estate Brokers
What is a broker? How does a broker differ from a real estate agent or realtor? What are the real estate broker duties and responsibilities? This section covers all the basics concerning real estate brokers.
What Is a Real Estate Broker?
A real estate broker is someone who coordinates, mobilizes, and negotiates real estate transactions. Becoming a real estate broker requires a license.
What does a broker do? A real estate broker can work as a traditional agent with duties such as marketing and showing properties, negotiating prices, and overseeing property sales transactions. Additionally, brokers can also work as designated brokers, which are brokers who own or manage a real estate firm.
Real Estate Broker vs Agent vs Realtor
Some people — even those who work in the industry — mistakenly use these three terms interchangeably. While there is some overlap when it comes to their duties, real estate brokers, agents, and realtors are not one and the same.
What does a real estate agent do? A real estate agent is simply someone who holds a license to practice real estate sales. They are, in essence, salespeople. The requirements to become a real estate agent can vary from state to state. For instance, in California, those who wish to apply for a real estate license must be at least 18 years of age and must have finished three college-level real estate courses.
What is the difference between a real estate agent and a real estate broker? Compared to a real estate agent, a real estate broker has typically had more training. A broker is like an agent, but with added education and an accompanying real estate broker license.
Can you practice real estate without a broker? The short answer is no, though specific regulations can vary depending on the state. Generally, though, unlike agents, real estate brokers can work independently. Brokers can also start their own real estate firm and hire agents to work under them.
What is a realtor? Is there a difference between a real estate agent and a realtor? A realtor is simply a real estate broker or agent who belongs to an organization known as the National Association of Realtors (NAR). Realtors pay annual dues to NAR and must abide by their strict code of ethics. Therefore, all realtors are either an agent or A broker, but not all agents and brokers are realtors.
Real Estate Broker Responsibilities
You know what a real estate broker is and how the position differs from agents and realtors. Now, it is time to go into a broker’s responsibilities. What does a real estate broker do?
Real estate brokers who are working for property sellers usually take on the following responsibilities:
- Market the property through various mediums
List homes for sale on the local Multiple Listing Service (MLS)- Share the listings with other MLS brokers
- Help the seller prepare their property for listings and showings
- Oversee property showings
- Report property showing results to the seller
- Manage and also present offers to the seller for review and deliberation
- Negotiate offers
- Attempt to close deals
- Carry out a purchase contract with a buyer
- Facilitate the transaction process, including submitting and explaining documents, disclosures, and other items
- Assist in closing
- Help with seller’s move-out of the property
Real estate brokers who are working with property buyers usually take on the following responsibilities:
- Assist with the property search process while taking into account the buyer’s location choice, price range, and other criteria
- Schedule visits and also accompany the buyer to property showings
- Help the buyer come up with an initial offer and purchase agreement
- Negotiate with the seller (or seller’s agent/broker) on the buyer’s behalf
- Facilitate the transaction process, including submitting and explaining documents, disclosures, and other items
- Arrange property inspections
- Negotiate repairs
- Assist in closing
Real estate brokers can also choose to become designated brokers, otherwise known as supervising or managing brokers. In that case, their responsibilities include:
- Recruit and hire agents
- Negotiate agent contracts
- Supervise as well as instruct all agents working under them
- Oversee operations
- Ensure all agents receive continued licensing
- Provide further training for agents
- Take responsibility for their agents’ performance, actions, and legal compliance
All About Property Owners
After purchasing a property, the owner can choose to do whatever they please with it. They can opt to live in the home or rent it out for extra income. In the case of the latter, what duties must a property owner fulfill? This section covers property owners and their responsibilities.
What Is a Property Owner?
A property owner is exactly as it sounds — it is someone who owns a property. These individuals go through the real estate transaction process, usually with the help of a broker or agent, to become property owners. Additionally, a property owner can own a residential or commercial property, which they can open up for rent.
Property Owners Responsibilities
Many property owners hire a manager or management company to handle their rental property. While property managers or companies do most of the work, there are still some responsibilities that a property owner must not skip over, such as:
- Registrations. Depending on the location, the local government may require owners to register their rental property. While owners can ask a property manager for advice, they must not rely solely on their managers to complete this critical step.
Tenant Screening Instructions. Most property owners want to be removed from the tenant screening process and only be notified after a tenant has been approved. But, owners must not completely disassociate themselves from the process. Property owners must provide their manager with directions — such as any pet or vehicle restrictions — when choosing a tenant. Moreover, owners must not discriminate against any class, as that would be a violation of the Fair Housing Act.- Maintenance and Repairs. Property managers usually take care of maintenance and repairs. But, if something requires the approval of the owner, property owners must provide or deny approval immediately. This will prevent any maintenance or repair issues from worsening.
- Property Improvements. Owners must have a separate fund for property improvements, such as repaintings, replacements of items or fixtures, and upgrades. This will help keep the property in good condition and preserve its value.
- Mortgage, Insurance, and Taxes. There are property management companies that offer this type of service, but it usually costs extra. Even if property owners delegate this responsibility to their manager or company, they must ensure proper completion and settlement. After all, the owners are the ones who will suffer should any of these payments be missed.
- Legal Fees. Property owners who find themselves in legal proceedings (like an eviction) are responsible for paying the fees involved.
All About Landlords
Is a landlord the same as a property owner? What responsibilities does a landlord have? This section covers landlords and also the duties they must fulfill.
What Is a Landlord?
A landlord is someone who owns and rents out a property. Typically, landlords are also property owners who have chosen to take an active role in managing their rental property instead of hiring a manager or management company.
Landlord Responsibilities
A landlord has the following roles and responsibilities:
- Mortgage Payments. Missing mortgage payments can have a negative influence on a landlord’s credit score. Worse yet, it can also lead to a lender foreclosing on the property.
- Taxes. All property owners and landlords must deal with taxes on an annual basis. Therefore, it is important that these owners familiarize themselves with the tax process, including what counts as a deductible.
- Insurance. Landlords must make sure they have all the necessary insurance policies. Homeowner’s insurance is a given, but there are also other types of essential insurance. This includes an umbrella policy as well as coverage for fire, flood, natural disasters, and even lawsuits.
- Safety Codes. Landlords must also stay up-to-date on and ensure compliance with all federal, state, and local safety codes. Failure to comply can lead to legal issues.
- Utilities. If utilities are included in rent, landlords must also religiously pay utility bills and keep tenants happy. When landlords fail to pay utilities, they run the risk of violating their lease agreement and having tenants take legal action against them.
- Maintenance and Repairs. Landlords must also perform preventive maintenance as well as routine maintenance on their rental property. This includes regular exterminations, ensuring all smoke and carbon monoxide detectors are working, cleaning all common areas, and the like. After all, tenants have a right to a habitable home.
A Helpful Guide
Real estate brokers, property owners, and landlords all have different roles and responsibilities. If you are looking to go into one of these occupations, it is imperative to first gain an understanding of each one. What does a real estate broker do? And how does a property owner differ from a landlord? Hopefully, this guide has answered your most critical questions.
Property owners are often too busy to perform landlord duties. If you need help managing your rental property, look for a property management company with the help of our online directory. Rental Choice allows you to search for the best company in your area.
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