A real estate brokerage is the company that employs a real estate agent. They collect payments for real estate transactions. An agent must work for a licensed brokerage. An agent can typically work for just one brokerage per state.
The brokerage is a company that employs a real estate agent. An agent helps you buy, sell, or rent property. Both are licensed by the state. A brokerage is overseen by a managing broker (also called broker of record). The brokerage may also employ non-agents who help with other services.
Real estate brokerages help ensure that agents comply with real estate law. Brokerages collect payments from real estate clients and then distribute them to agents (usually after taking a cut). By making agents work under a licensed brokerage, accountability is created by the state. Even if an agent were to try to steal a commission or commit fraud, the payment would still go to the brokerage first. The brokerage would review any documents before submitting payments to the agent.
The range of services that real estate brokerages offer vary significantly. Some offer extensive services like marketing, training, transaction support, and technology. Others simply provide the bare minimum oversight necessary to follow state laws.
Traditionally, real estate brokerages take a portion of each real estate commission that an agent receives. This is called a split. Other brokerages charge monthly fees or annual fees to agents instead. Some modern brokerages like Redfin keep the full commission and pay agents annual salaries.