The Difference Between a Principal Broker, Associate Broker and a Real Estate Salesperson

The Difference Between a Principal Broker, Associate Broker and a Real Estate Salesperson

Principal broker, associate broke and managing broker, and a real estate salesperson – what’s the difference between these agents? For many homebuyers, figuring out the various roles and responsibilities for these real estate job titles can be confusing. People tend to use the terms interchangeably, however, each role requires specific classes, tests and licenses, and continuing education requirements. Let’s discuss the roles and responsibilities of each.

Principal Broker

A principal broker is an industry professional who has taken all the required real estate classes plus additional education classes required by state and national laws. Typically, a broker must complete 180 hours of broker-specific classes, pass a broker exam and have actively worked as a real estate salesperson for 36 of the previous 48 months, and complete at least 36 hours of continuing education course work every two years. A principal broker represents the brokerage firm and is the person legally authorized to enter into agency contracts with clients and is responsible for supervising the real estate agents who work for the agency. A principal broker oversees a transaction between a buyer and seller and affiliated agents for which a commission is paid to the brokerage firm once the transaction has been closed and recorded. A principal broker will also have a trust or escrow account which ensures the safe-keeping of the earnest money deposit and any monies due to the brokerage firm. By law, a principal broker is held to a higher standard of accountability and responsibility.

Associate Broker and Managing Broker

An associate broker is an industry professional who has completed the same requirements necessary to become a principal broker which may or may not include supervisory and management responsibilities. Many associate brokers choose to complete the additional educational requirements to enhance their level of competence, improve commission structures with the brokerage firm, and avoid supervisory and management responsibilities. An associate broker can also be designated as the Managing or Supervising Broker for a particular brokerage office. An Associate Broker in this role typically does not transact real estate but maintains a management position overseeing affiliated agents. It is important to note that there is only one Principal Broker per brokerage company or firm. However, a brokerage company can have several Managing Brokers, but only one per office.

Real Estate Salesperson

A real estate salesperson is an industry professional who has passed all required real estate classes and the national real estate licensing exam for the state in which they intend to work, and must complete the post-licensing coursework, and completes at least 16 hours of continuing education coursework every two years. Real estate agents are not allowed to work for themselves. They must affiliate with a brokerage firm. Typically, sales agents are not employees (although there are exceptions) and receive compensation from the brokerage firm upon the successful completion of a real estate transaction in residential, commercial, land sales and leasing, or property management. Real estate salespersons that assist sellers are often referred to as listing agents. Those that assist the buyer are known as a buyers’ agent.

What are the pros and cons of working with a real estate broker versus a salesperson?

The Difference Between a Principal Broker, Associate Broker and a Real Estate SalespersonA benefit of working with a broker during your real estate transaction is that you’re typically working with someone who has more real estate experience. That experience can be an advantage at any time but especially if you are dealing with complex transactions like purchasing a foreclosure, selling your home as a short sale, any well and septic issues, and resolving buyer and seller grievances. Real estate brokers are also typically more knowledgeable about real estate law, have more designations, and a better track record for success.

On the other hand, a salesperson may show higher desirability to complete the transaction, make a greater effort to do more, and possibly have more enthusiasm throughout the transaction to reach the same success. As long as there is a good managing broker behind the salesperson, either type of agent should be fine.

When deciding to hire a professional in the real estate industry, make sure you are comfortable with their qualifications and experience. Ask basic questions like how well they know the area, how long they’ve been in the industry and what their schedules look like. You’ll want someone you feel comfortable with, is enthusiastic, and has the desire to represent and protect your best interests. However, the most important question to ask yourself is who do you believe has the ability to successfully complete the transaction when challenges are faced or who can best solve problems?


For all your real estate needs, please contact Belinda Jacobson-Loehle at Jacobson Realty and Home Staging today.

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Belinda Jacobson of Jacobson Realty sold my parents house for us.  From the onset, she was a delight to work with — extremely efficient, organized, and knowledgeable.  She helped us stage and clear out my parents home, organized the necessary upgrade and repairs, professionally presented and took the house to market. She is well connected in the community, and able to respond to needs at a moments notice in a very professional manner. Belinda went well beyond what most realtors would do to assure a smooth and successful sale of the house. Each step of the way, she was right there with good advice and counsel.

– Joanne Huskey

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