Real estate brokerage


  • A real estate brokerage employs real estate agents. They ensure that real estate agents follow laws and best practices.
  • Real estate brokerages collect payments for real estate transactions and then disperse them to agents.
  • Services that real estate brokerages provide to agents vary significantly. Some offer marketing, training, and other offerings.
  • Real estate brokerages usually generate revenue by taking a portion of each agent’s commission. This amount is called the split.
This post was last updated on: 

What is a real estate brokerage?

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.

What is the difference between an agent and a brokerage?

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.

Why do real estate brokerages exist?

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.

What does a real estate brokerage do?

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.

How do real estate brokerages make money?

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.

This post was last updated on: