subject: How The Broker Earns That Commission [print this page] Purchasing a home or investing in real estate can be an emotional experience, particularly for those that are engaging the process for the first time. It can be confusing, particularly to the seller, as to what the broker is doing or has done to earn the agreed upon commission. It is important to understand where the broker fits in as; ultimately, the responsibility for any transaction you may enter into is attached to this person.
A real estate broker will have previously worked as an agent under the guidance of another broker to gain the relevant experience and then has to pass a state broker exam. One of the major advantages a broker has over an agent is that he or she can manage and/or own a real estate business.
It is generally accepted that they have the ability to locate properties, list them for sale, and handle the negotiations between the seller and buyer to complete the transaction. Additionally, the broker is licensed to become involved with the property rental market, offering rental properties to tenants, negotiating the tenancy and even collecting the rents and managing the property on behalf of the owner, for which they will naturally charge a commission.
Although some states by law require the services of an attorney to be used to complete the contract of sale, in others this task can be also conducted by the real estate broker. However, it is always advisable for the seller or buyer to have the transaction checked by an independent party to ensure all of the normal conditions of sale have been met.
The advantage that a consumer has in routing their property transactions through a real estate broker is that these persons are licensed and are held to a certain level of service and quality and under oath to act in a trustworthy and honest manner with their clients. They are also required to have the proper insurance in place to protect and recompense their clients in the event of inappropriate action. In addition, they are also responsible for the conduct of those that work under their direction, namely the real estate agent.
