Difference between broker and agent.

A significant proportion of financial transactions are concluded with the participation of brokers and agents. What do both of them do?

Who is a broker?

Under a broker means a specialist (for example, in the field of finance, real estate or insurance) who acts as an intermediary between the seller of a product or service and its buyer. At the same time, he is interested in ensuring that the terms of the transaction satisfy both parties.

The broker is generally legally independent from both the seller and the buyer. Although, of course, with a long experience of cooperation with some of them, the broker may establish a trusting relationship with them, contributing to the emergence of various preferences.

The broker most often earns commission from the transaction. Depending on the conditions of its conclusion, determined by the seller and the buyer or by the traditions prevailing in the current market segment, the broker is paid by either a particular party or both - dividing the corresponding costs in half or in an established proportion.

What is an agent?

An agent is, like a broker, a specialist in the conclusion of transactions in the financial sphere, in the field of real estate or insurance, who participates in the signing of a contract between the seller and the buyer, representing the interests of the former. He, of course, may be interested in meeting the terms of the deal and the buyer - but only to the extent that it is beneficial to the seller.

The agent is thus legally dependent on the seller. He can be hired by him in the state or represent his interests under the contract. At the same time, it often happens that an agent has a long experience of interaction with specific buyers, and when concluding new deals, he can take into account their interests and justify them to the seller.

An agent, like a broker, earns on commissions, but they are almost always paid by the seller. Sometimes a specialist receives compensation in the form of a salary if he is employed by the staff of the company whose interests he represents in interaction with customers.

Comparison

The main difference between a broker and an agent is that the former is generally independent of both the supplier and the buyer and acts as a pure intermediary between them. He tends to balance the interests of the seller and the client in the negotiation of the deal. The agent, on the other hand, is legally dependent on the seller (works for him or provides intermediary services under a contract) and therefore in negotiations with the client, as a rule, focuses on expressing the interests of his partner or employer.

It is worth noting that one and the same person can be both a broker and an agent - but only for different firms. The fact is that, in essence, in both positions, he does the same job - associated with negotiations on the conclusion of a deal between the seller and the buyer.

Some experts consider brokers to be more skilled than agents. The fact is that impartiality and the ability to find a balance of interests between the seller and the buyer, as supporters of this point of view believe, come to a person only with experience.

At the same time, there is a different opinion on this matter - according to which the agent should have more qualifications due to the fact that his experience is of a narrower focus, since it is concentrated in one area. The broker, in turn, often tries to deploy activities in a variety of, sometimes very dissimilar areas, and the level of his competence is inferior to the agency in each of the business segments.

Having determined what is the difference between a broker and an agent, let us enter the conclusions in the table.

Table

Broker Agent
What do they have in common?
Broker and agent solve the same problem - facilitating the conclusion of a deal between the seller and the buyer
One and the same the same specialist can be a broker and an agent - but when interacting with different sellers
What is the difference between them?
In negotiations on a deal, he is purely an intermediary, unbiased, contributes to building a balance of interests between the seller and the buyerAs a rule, legally dependent on the seller, promotes his interests in the negotiation of the transaction
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