How Does a Real Estate Brokerage Work?

While many people may assume that realtors are employees of a company, most are actually independent contractors. As independent contractors, realtors work with a brokerage to access tools, training, and support. This structure outlines everything from how agents get paid to how they represent clients. As an experienced Austin Realtor, I’ve seen firsthand how this system empowers agents and helps them better serve their clients while still adhering to the rules set by their brokerage.

This autonomy enables real estate agents to create their own schedules, establish a brand, and specialize in neighborhood markets with which they are most familiar. At the same time, sales agents are held to high standards by their brokerage and licensing boards, which helps ensure clients receive consistent, professional service.

Team Photo of the ROOTS Residential Group.

What is a Real Estate Brokerage?

A real estate brokerage is a team of sales agents operating under the leadership of a single broker. This team may include individuals who are a part of the National Association of REALTORS® (NAR), and even broker associates. The broker sponsors these agents and operates a licensed business that connects buyers and sellers in real estate transactions. Acting as the foundation, brokerages provide the legal structure, compliance oversight, and professional resources necessary for success.

Furthermore, the primary purpose of a real estate brokerage is to facilitate property transactions while ensuring that all activities are conducted ethically and comply with state and federal laws.

In Texas, all brokerages and real estate agents operate under the Texas Real Estate Commission (TREC), which sets licensing requirements, enforces rules, and requires ongoing continuing education for brokers and agents to maintain their licenses.

What Does a Real Estate Broker Do?

A real estate broker holds a higher-level license than a sales agent, having met additional education and experience requirements as mandated by TREC. In Texas, brokers must complete advanced courses and have several years of active experience as a licensed agent before obtaining their broker license. To become a licensed broker in Texas you must:

• Have 4 years of experience as a licensed real estate agent or broker within the past 5 years.

• Earn 360 experience points from completed transactions (like home sales or leases).

• Complete 900 hours of education, including required real estate courses and related topics.

• Pass a background check and fingerprinting through the Texas Department of Public Safety.

• Apply with TREC and pass the broker exam with a score of at least 75% on both the national and state sections.

Overall, the broker is responsible for supervising sales agents and ensuring their real estate transactions comply with state laws, ethical guidelines, and brokerage policies. With this foundation in place, it’s essential to understand exactly what real estate agents do on a daily basis to help buyers and sellers navigate the market.

What is a Broker Associate?

As a broker associate, I’ve completed all the licensing, education, and experience required to operate independently as a broker. However, I’ve chosen to work as part of a team for now. This enables me to continue growing in a collaborative environment while providing my clients with the benefits of both advanced broker-level knowledge and strong team support.

In Austin’s fast-paced market, this team structure enables more seamless communication, quicker responses, and access to shared resources that directly benefit my clients. It also allows me to focus more deeply on each transaction, knowing I have a strong support network behind me.

What Does a Real Estate Agent Do? 

Sales Agent Responsibilities

Real estate agents are licensed professionals who work under the supervision of a sponsoring broker. Agents represent buyers and sellers by listing properties, conducting showings, negotiating offers, and guiding clients through the closing process.

Furthermore, agents who have earned broker licenses but prefer to work under the supervision of another broker are known as broker associates. All agents are independent contractors, responsible for their own taxes and expenses. This status provides agents with flexibility in managing their business, but it requires discipline in handling finances and adhering to compliance requirements.

Supporting Staff Responsibilities

Brokerages often employ support staff, such as transaction coordinators, marketing assistants, and office managers, to ensure smooth operations. These responsibilities may include:

• Transaction coordination to ensure all contract deadlines and paperwork are completed on time.

• Marketing assistance to promote listings.

• Office management and compliance with legal record-keeping.

  
  

Although agents work as independent contractors, the role of supporting staff helps sales agents focus on client relationships and sales.

How Do Real Estate Agents Get Paid? 

Real estate agents generally earn income based on a commission, a percentage of the home’s sale price paid at closing.

• The total commission is typically around 5% to 6%.

• The commission is usually paid by the seller from the sale proceeds.

• The listing brokerage receives the full commission and splits it with the buyer’s brokerage.

• Each agent then shares their portion with their sponsoring broker based on a negotiated split, commonly 70/30 or 60/40.
  

Agents can also earn referral fees for sending clients to other agents. Co-broker agreements between multiple brokerages define how commissions are divided when more than one brokerage is involved.

Legal and Ethical Responsibilities of REALTORS

Agents and brokerages have a fiduciary responsibility to their clients, which includes loyalty, confidentiality, disclosure, and care. They must always act in their client’s best interest and comply with fair housing laws, prohibiting discrimination based on race, gender, religion, disability, and other protected classes.

Moreover, as agents work to maintain client relationships, they must also abide by continuing education requirements. TREC requires agents to complete continuing education, including legal updates and ethics training, to keep their licenses and stay current with the latest Texas real estate laws.

Tools Provided by Real Estate Brokerages

Real estate brokerages play a crucial role in an agent’s success by providing access to essential tools and resources. These tools help agents manage listings, connect with clients, and navigate the complexities of real estate transactions.

From powerful marketing platforms to comprehensive training and legal support, brokerages equip agents with everything they need to grow their business and serve clients effectively. Brokerages provide agents access to essential resources such as:

• The Multiple Listing Service (MLS) is used to list and find properties.

• Marketing platforms for advertising and social media.

• Technology tools for managing leads, client communication, and transactions.

• Training programs and mentorship to support new agents.

• Legal support, including contract review and risk management.

• Branding materials: websites, business cards, and listing presentations.

Choosing the right brokerage means having the support system necessary to thrive in a competitive market, helping agents grow their businesses more quickly and deliver better client service.

The Importance of Real Estate Brokerages

Although agents work as independent contractors, they remain accountable to clients, brokers, and state and federal law. Understanding how brokerages operate helps clients and professionals navigate real estate transactions with confidence and trust.

Brokers, agents, and support staff collaborate to deliver exceptional service and protect client interests. For real estate agents, selecting the right brokerage is one of the most crucial decisions, as it can significantly impact their career, growth, and earnings potential.

Contact Broker Associate Olivia Vale

Looking to buy or sell a home in Austin? Contact Olivia Vale, an experienced Austin realtor known for her sharp instincts, local expertise, and seamless client experience.

Whether you're a first-time buyer, a seasoned investor, or ready to sell your home, Olivia is here to guide you through every step. Reach out today by submitting a message via the contact form below to start your real estate journey with confidence.