Customers interested in availing the services of an Agent or a Broker are actually looking for a facilitator or a middle man who can liaise with the seller or the service provider to ensure smooth flow of information and facts between both parties.
An agent typically represents a company and is trained on the procedures/products/services offered by the company. For example, an insurance agent would typically have all the knowledge about the practices, procedures and policies pertaining to the insurance company that he represents. He would facilitate the purchase of a policy by a customer by providing all the necessary brochures, information dockets and policy related details. The agent would then typically complete all the paperwork pertaining to the policy purchase. Since an agent is authorized to act on behalf of the company that he or she represents, any contract signed by the agent is considered legally binding. Hence, in an agreement between the company and the customer, an agent who is authorized to act on behalf of the company, acts as a middle man and facilitates the closure of the deal between the two. A agent usually earns benefits of a deal in the form of a commission from the company that he or she represents.
In the real estate scenario, an agent can use a multitude of titles like an associate, a real estate consultant or a Realtor. But in spirit they are all the same, ie they are all real estate agents. They represent the company to the customer and maintain dialogue between the buyer and the seller. They are the customer facing sales force representing a broker. They handle all the administrative tasks as well which includes the paperwork, sales closure etc.
An agent needs the requisite certificate licenses and permits to function as an agent, legally.
A broker on the other hand is considered as a representative of the customer. Brokers are expected to have a repository of information pertaining to the sector within which they operate. Their service, apart from being that of a middle man in a transaction is one of consultation.
Brokers are expected to present a multitude of options to the customer about the service or product in which the customer is interested. Once the information or options are evaluated by the customer, the broker is then expected to assist in the purchase of the good or services. Such brokers primarily act on commissions and hence represents all options to the customer genuinely. This kind of service is prevalent in the insurance sector primarily
It is a must for the broker to have the due licenses and certifications. Only then he is able to perform his duties as a broker.
In the real estate scenario, brokers are concerned with finding customers for the property that has been listed. In this case their intent is to sell the property at the highest possible price that would enable them to earn a high commission. Hence, they could be considered to be representatives of the seller in this case.
For the customer, a broker is expected to provide the correct information pertaining to the property to the customer and help the customer get a property within the customer’s budget.
The marketing collaterals required to facilitate that includes the preparation of templates, brochures etc. is usually undertaken by the broker. Advertising the prime properties is also done by the broker that involves a substantial expenses. Collating the responses to the advertisement and finally facilitating a sale is done by the broker.
Important documentation related to the deal such as the property disclosure form and other related paperwork are provided by the broker.