Principal Broker
To understand what a principal broker is, we have to go back up the family tree of real estate.
You do understand all brokers can be real estate agents, but not every real estate agent can be a broker, right? That’s because, to obtain a broker’s license, the real estate agent has to attend additional broker’s classes and, in some states, have some proven experience in the real estate market.
Ok, with that in mind, you must also understand that most of the states prohibit real estate agents from working without brokerage supervision. They can do everything, but once a deal is set in place, the real estate agent will need a broker to close things properly. However, there are some individuals that do possess a broker license but still work as real estate agents under another broker. They are brokers that prefer not having the heavy costs of running an office and/or the responsibilities of having their name on the billboard.
So, finally, the Principal Broker is the fearless one who puts his name on the billboard and carry the burden of maintaining a business. The big boss. El Jefe. The Principal Broker.
Also known as managing broker or qualifying broker, the principal broker is the one with the legal authority to sign agency contracts with a home buyer or a home seller and the one who supervises all agents working on a brokerage firm. He/she is the supervisor, and sometimes the home buyer or home seller doesn't even get to meet him/her!
How does the principal broker earn a living?
Well, because his/her existence allows the real estate agent to close deals and profit from it, the principal broker normally receives an override on the sales of all the licensees working under his/her license.
Popular Real Estate Terms
Property used consistently for many years by someone without challenge from the owner. Easement resulting from law such as the reasonable expectation that a purchaser of one or two ...
Enumeration of the consideration given by each party to a contract which in some cases must be in written form to be enforceable. For example, the statute of frauds requires that all ...
The term land use succession definition can be looked at from two perspectives. While the general way to define land use succession would be “changes that occur over time in the use ...
When we use the term contingent, we typically imply that something is dependent on another factor. Real estate contingencies make home selling, buying, or even inheriting a property ...
Individually owned lots and houses with community ownership of common areas. ...
The meaning of direct costs implies such expenses that you can connect straight to a particular goods’ or service’s production, manufacturing, and preparation. As opposed to ...
Foreclosed property is sold via a sheriff's deed. The amount received is used to pay the balance of any obligations against the owner or real estate. ...
Mortgage loan not insured or guaranteed by a governmental agency such as the Federal Home Administration or the Veterans Administration. This type of loan is repayable in fixed monthly ...
Power of attorney giving permission for a lawyer to represent a client. ...
Comments for Principal Broker
Are Real Estate agents in Arkansas automatically Brokers? Also, how would I search to find out if someone is a licensed broker in the state of Arkansas?
Feb 17, 2020 19:45:42Hi Sharice!
the answer to your question is no, not necessarily. In Arkansas, a person can be a real estate agent without a real estate broker's license, as long as they are under the auspices of a licensed broker.
Feb 21, 2020 10:56:44Have a question or comment?
We're here to help.