Are you searching for the differences between a designated broker vs. managing broker? If so, you’ve come to the right place!
Responsibilities of a Designated Broker vs. a Managing Broker
By law, every real estate firm must be overseen by a specified broker commonly referred to as the designated broker, although the exact title of this broker may very depending on state. The designated broker is legally responsible for the actions and transactions of the agents and other brokers within their firm. Designated brokers oftentimes hire other brokers, called managing brokers, to carry out day-to-day managing duties. This is especially true in large or growing firms. Both managing and designated brokers are paid by commission. This means a broker earns a percentage of the sales they facilitate directly as well as the sales made by the agents they oversee. Some designated and managing brokers balance sales with training, mentoring, and overseeing their agents, while others focus solely on management.
Designated Broker
A designated broker owns a real estate firm or has been hired to oversee one. Designated brokers are involved in the operations of running the company such as hiring new agents, establishing policies and procedures for the firm, and setting company goals. They help develop training tools used to teach new brokers and agents effective sales methods, negotiation strategies, and law compliance. As a senior-level broker, the designated broker should be well-versed in the state laws governing the buying, selling, and renting of property and be highly knowledgeable on the area’s real estate market. Interpersonal skills are a must to keep good relations with high-level clients and money lenders. Cultivating good community and business connections will help the firm attract and maintain clients. Depending on the size of a firm, some designated brokers manage their sales agents directly while others hire managing brokers to carry out the task. Regardless, designated brokers should have strong management skills, be comfortable delegating responsibilities, and confident leading a company. Extensive brokerage experience and a thorough understanding of real estate best practice is necessary for success.
Responsibilities of a designated broker include:
- Recruiting and interviewing new brokers and agents
- Assisting with brand development and marketing
- Setting business goals and growing the firm
- Helping brokers resolve difficult issues with clients
Managing Broker
A managing broker is hired by a designated broker to oversee the day-to-day management of a real estate firm. Managing brokers often have mixed responsibilities. Working with clients and performing traditional brokerage duties is common, but managing brokers are also responsible for monitoring and educating the agents under their supervision. Overseeing the marketing, listings, transactions, and documentation done by these agents helps minimize legal risk to the firm. A managing broker must remain up-to-date on the real estate laws for their state and inform agents of changes or current issues in their work. Managing brokers must be accurate and detail-oriented because less experienced real estate agents are counting on them to catch errors in their work. This position requires strong interpersonal skills to satisfy clients, effectively manage agents, and resolve conflict.
Responsibilities of a managing broker include:
- Helping agents negotiate real estate transactions
- Training and mentoring agents under their supervision
- Ensuring compliance with state real estate law
- Upholding firm policies and procedures
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