Definition of "Employing broker"

Mariette Gagne real estate agent

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Mariette Gagneelite badge icon

Marketplace Realty

Most people seem to be baffled by the fundamental terminology in real estate: brokers vs. agents vs. employing brokers vs. mortgage brokers, etc. Let us provide some clarity!

The primary puzzlement concerns the difference between real estate agents and brokers. In short, the definition of a broker refers to a real estate licensee who has the right to establish their company or brokerage. At the same time, agents can be their employees as licensed representatives. Thus, brokers can work as agents, yet this doesn’t apply vice-versa.

Let’s go one step further! The definition of an employing broker describes a licensed broker hiring a licensed real estate agent or salesperson to sell and or rent specific real estate. An employing broker must pay a commission to the given agent after closed real estate transactions.

The career path in real estate

A licensed real estate agent, also known as an associate broker, starts their career by establishing a professional relationship with an employing broker. Local real estate agents need to put such a broker on their application. So, agents must obtain a legit license to represent property sellers and buyers in real estate transactions. 

Suppose you wish to


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ursue a real estate broker’s career. In that case, you must take the licensing exam presupposing an in-depth examination of your proficiency and knowledge. However, being an employing or managing broker has, by all means, specific heavy duties requiring an expert set of skills, such as how to hire real estate agents or brokers at listings.

What are the employing broker’s responsibilities?

An independent or employing broker has various responsibilities, primarily supervising associate brokers under their wings. In addition, they’re consultants, mentors, and overall teachers to the entrant. Note that owning an independent broker license enables you to conduct business autonomously without being affiliated with a brokerage.

The broker can provide a working environment. Besides, they manage finances by collecting commissions and handing out paychecks to their agents. 

What is the distinction between employing brokers and managing brokers?

Now, we distinguish managing brokers from employing brokers (Though sometimes these titles may come to the same person.) A managing broker is in charge of and accountable for the entire company’s business. You must get the Managing Broker Eligible license to achieve this high-level rank. 

What does a mortgage broker mean?

We call a mortgage broker an individual or company that prepares and organizes mortgage loans for borrowers. Essentially, they are intermediaries between those needing financial assistance to purchase a home and money-lenders. Note that they do not utilize their capital to assure mortgages. 

Their purpose is to meet the borrowers’ interest-rate needs and financial situation. In addition, they guide borrowers through the loan procedure by compiling the necessary documentation and obtaining titles and appraisals.

How to become a self-employed mortgage broker?

To get an independent mortgage broker license, you’ll need to have a high school diploma. Secondly, accumulate experience as a loan agent or realtor. Then, check the National Association of Mortgage Brokers (NAMB) for mortgage broker license requirements. 

Know that you can obtain the following credentials: Certified Residential Mortgage Specialist), Certified Mortgage Consultant, and a leading broker. Most importantly, apply for mortgage licensing courses in your state. Also, you’ll need to know that the National Mortgage Licensing Center processes all mortgage broker licenses. Finally,  NAMB will issue a certificate for you when you successfully have taken your exams. 

Establishing reliable relationships with real estate agents, brokers, and lending institutions is crucial to running a profitable business! You can work online or find a physical location. Don’t forget about budget, monthly costs either!

Comments for Employing Broker

Gerald Fleckenstein Gerald Fleckenstein said:

What are all the requirements in colorado to become an employing broker?

Dec 18, 2020  20:19:01

Real Estate Agent

Hey, Gerald!

Becoming an employing broker is very similar in all states. The exam will vary in content and context from state to state, but this might be the only difference you encounter. First, you need to know how to become a real estate agent before you become a broker. After you did your pre-licensing education and passed the final exams, you can work as a real estate agent under a broker. Going one step further requires you to take the Colorado Real Estate Broker License exam, submit fingerprints at the Colorado Bureau of Investigation for background checks, and have an E&O insurance policy in place.

Dec 24, 2020  06:42:12
Kraig Forbes Kraig Forbes said:

What is the difference between employing broker and managing broker?

Sep 09, 2020  18:15:24

Real Estate Agent

Hey, Kraig!

An employing broker is the person you come in contact with if you want to start working as a licensed real estate salesperson. It is mandatory for a real estate agent to have an employing broker listed on their application in order to receive an active license. An employing broker also has the responsibility of mentoring agents, holding the license of the agents, provide office space, collect commissions, and make payouts to agents. A managing broker is a person designated to represent the company in front of the Commission. In order to be the manager of the company, you need to have the Managing Broker Eligible on your license. Managing brokers are higher-level brokers tasked with managerial responsibility in a firm.

Sep 16, 2020  03:32:44
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