The term "broker of record" describes a licensed real estate broker responsible for real estate agents working at the brokerage. Broker qualifications and duties vary in each state, but in all states the broker of record holds a real estate broker's license, as well as a real estate license. Broker of record, as defined by the Pennsylvania Bulletin, is the official representative entering into the written agreement to represent a property seller or landlord.
The broker of record makes final decisions when disputes arise in the office and works with other office brokers of record when disputes arise between office transactions. Typical disputes involve questions over office commission splits, special disclosures and questions of concessions between buyers and sellers. When agents cannot come to agreement, brokers take over discussions.
Brokers of record hold the final authority for legal paperwork for the real estate office. Paperwork for both buyers and sellers must be retained for a set period of time, depending on the state where the transaction took place, and brokers assume the responsibility for receiving all required paperwork and storing documents for the required legal period.
Set Office Standards
Brokers set office procedures and standards and train real estate agents to ensure standards and legal requirements are met. Behavior standards for agents and office staff, office procedures, including times and topics for office meetings, and hours of office operation have broker of record approval, even when an office manager accepts initial supervision duties.
Real estate agents must work under a broker of record in all states. Brokers serve as a sounding board and adviser for routine and irregular real estate transactions. Brokers train agents in real estate procedures or hire the services of trainers to offer training sessions to complete paperwork and review procedures necessary for daily work representing buyers and sellers in real estate transactions. When recurrent problems arise, brokers schedule training sessions to retrain agents and office staff. State real estate laws, including Pennsylvania, describe the legal duties of a broker of record as a counselor and consultant to agents under the broker's supervision.
Brokers of record collect and distribute commissions to office agents. When a property sells and funds are distributed through escrow accounts, the broker of record confirms financial distribution and issues checks to agents for commissions. All commission payments come directly from the broker to avoid compensation for agreements not directly supervised by the broker of record. Brokers determine the commission split between the agent and the office. Office fees cover costs for personnel, staffing, equipment and advertising. Agents and brokers negotiate commissions and sign written contracts for payment.
Ensure Legal Requirements
While agents are held to the letter of the law when legal requirements are not met, it is the broker who must also accept responsibility for errors and omissions made by an agent under the broker's supervision. Brokers, even in large real estate offices, review contracts and meet with office agents to follow the progress of transactions and to ensure that the agent's actions match with state laws. Large offices may have sub-brokers who review paperwork for groups of agents and report any irregularities to the official broker of record for the office.
2016 Salary Information for Real Estate Brokers and Sales Agents
Real estate brokers and sales agents earned a median annual salary of $46,810 in 2016, according to the U.S. Bureau of Labor Statistics. On the low end, real estate brokers and sales agents earned a 25th percentile salary of $30,850, meaning 75 percent earned more than this amount. The 75th percentile salary is $76,200, meaning 25 percent earn more. In 2016, 444,100 people were employed in the U.S. as real estate brokers and sales agents.
- Bureau of Labor Statistics: Real Estate Brokers & Sales Agents
- Insurance Journal: California State Fund Revises Broker of Record Policy
- State of New Jersey: Department of Banking & Insurance: Real Estate Online Licensing Services
- State of Colorado: Application for Change of Corporation, Partnership, LLC
- The Pennsylvania Bulletin: Independent Regulatory Review Commission
- Pennsylvania Association of Realtors: What's in a Name?
- U.S. Bureau of Labor Statistics: Occupational Outlook Handbook: Real Estate Brokers and Sales Agents
- Career Trend: Real Estate Brokers and Sales Agents
- real estate image by Andrei Merkulov from Fotolia.com