License Levels
Real Estate Agent vs Broker: What's the Difference?
Every state has at least two license tiers. Here's what separates an agent (salesperson) from a broker — in terms of licensing, authority, and responsibility.
Agent vs Broker: Key Distinctions
Salesperson / Agent
Entry-level license. Must work under a licensed broker. Cannot operate independently, open their own office, or receive commission directly from clients.
Broker
Can operate independently, open their own office, and directly supervise salespersons. Responsible for escrow/trust accounts. Receives commission and disburses to affiliated salespersons.
Associate Broker
Holds a full broker license but chooses to work under another broker rather than independently. Has broker-level credentials but functions in an associate capacity.
Broker-in-Charge / Principal Broker
The designated broker responsible for the office and all affiliated licensees. Every branch office must typically have a broker-in-charge. Liable for the office's compliance with license laws.
Agent vs Broker FAQ for the Exam
Can a salesperson receive a referral fee from another agent?
Salespersons cannot receive compensation directly from clients or other agents. All compensation must flow through the employing broker. The broker may then disburse the salesperson's share per their agreement.
What is a 'broker-only' state?
Some states (like Colorado, Wyoming, and Washington) only issue broker-level licenses — there is no salesperson tier. Entry-level licensees hold a 'broker' license but must work under a supervising broker for a period before practicing independently.