Table of Contents
- What Is a Transaction Broker?
- The Role of a Transaction Broker vs a Real Estate Sales Agent
- A Transaction Coordinator vs Transaction Broker
- AgentUp – Your Source for Excellent Transaction Coordination
There is a lack of clarity in the real estate industry about what a transaction broker actually is and does.
Most real estate professionals understand the role of a transaction coordinator, but they are unsure of the role of a transaction broker and what this role entails.
Many people are confused about what a transaction broker actually is. This article will explore what a transaction broker does and answer the question, “Do you need to work with one?”
What Is a Transaction Broker?
A transaction broker (TB) is a neutral third party in real estate transactions who assists both the buyer and the seller in closing their contracted sale.
However, a transaction broker does this without representing either party’s interests over the other.
Unlike traditional real estate agents who work exclusively for the buyer or seller, transaction brokers ensure that the closing process runs smoothly without the ability to negotiate, advise, or advocate for either side.
Let’s look more closely at what a transaction broker does.
What Does a Transaction Broker do?
Transaction brokers can play a central administrative role in the buying and selling of property. They typically perform the following tasks:
- Facilitate the sales contracts for both the buyer and seller: They ensure that the purchase agreement is filled out appropriately and meets compliance standards
- Coordinates buyer-seller communications: Transaction brokers manage the communication between the buyer and seller, ensuring that information is exchanged efficiently and transparently
- They keep the transaction moving by coordinating inspections and appraisals and ensuring that other necessary steps are completed
- Brings the sale to closing: by ensuring that all paperwork is in order and that all necessary steps have been accomplished
Given the above explanation, the question arises: what is the difference between a transaction broker and a real estate agent?
Let’s answer that question.
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Real Estate Transaction Coordinators
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The Role of a Transaction Broker vs a Real Estate Sales Agent
The transaction broker is legally required to remain neutral and objective, helping facilitate the transaction without representing the interests of either the seller or the buyer.
This neutrality is required because the transaction broker does not have agency with either side of the sale. Therefore, there are many things a transaction broker cannot do, including the following:
- Negotiate on behalf of either the seller or buyer
- Make a counteroffer for either side
- Provide advice on legal, contractual, or inspection matters
- Help either side strategize concerning their best interests or advantages
- Discuss pricing strategy or offer pricing advice
- Answer any question that would disadvantage the other side
As you can see, there are some significant limits to the role of a transaction broker.
A Real Estate Agent vs Transaction Broker – The Differences
A real estate salesperson establishes a legal agency with their clients—the buyers or sellers.
Agency is a legal relationship that allows a salesperson to take actions that can benefit their client.
An agent works exclusively for only one side of a transaction. The agent negotiates and works to secure the best deal for the client. In other words, an agent seeks to protect their client and takes actions that will benefit them.
A transaction broker cannot play such a role because they lack the legal advantage of agency.
With agency comes a set of fiduciary duties to protect and serve the client. These fiduciary duties include the following essential responsibilities:
- Loyalty: An agent is obligated to be loyal to their client, always doing what is in the client’s best interest
- Confidentiality: An agent is obligated to protect the confidential information of their client
- Obedience: An agent is obligated to do what the client asks as long as it is legal and ethical
- Accountability: An agent must explain and account for all the money involved in the transaction
- Care & Skill: The agent is required always to give their best effort
- Full disclosure: An agent must fully disclose any adverse information to their client
Most real estate sales involve a significant amount of money, usually hundreds of thousands of dollars or more. The financial risks in any real estate sale are high.
Additionally, real estate sales are complex and involve many interrelated steps, legal requirements, and challenging decisions.
So, the next time you are involved in a real estate sale, ask yourself this question: Would you rather hire a neutral paper-pusher or a skilled agent who will protect your interests and advise you on the best course of action every step of the way?
A Transaction Coordinator vs Transaction Broker
Now, there is another professional role in many real estate sales – that of the transaction coordinator.
How is a transaction coordinator (TC) different from a transaction broker?
A transaction coordinator is a skilled administrative professional typically hired by a real estate agent to help close contracted sales. The coordinator acts under the agent’s direction to serve the client.
A transaction broker is a real estate professional typically hired by both the buyer and the seller to avoid paying an agent’s commission. The transaction broker does not represent anyone’s interests. They merely facilitate the closing without the guidance of an agent.
So, a transaction coordinator and transaction broker do almost the same set of functions, but with a few crucial differences:
- The transaction coordinator operates under the guidance of an experienced agent, and the transaction broker acts alone
- While the TC and TB are both neutral parties, sales with a TC usually include the fiduciary protections of an agent
- A transaction coordinator is usually significantly less expensive than a transaction broker
As you can see, there are considerable advantages to having a transaction coordinator and agent involved in your sale rather than just a transaction broker.
Further Considerations
There are other considerations, including the following:
- A sales agent is experienced in every step of the sale. The transaction broker only knows the paperwork
- Many transaction brokers have only developed skills for one side of the sale – helping the buyer or seller. Sales agents are experienced in working with both sides
- A transaction broker is extremely limited in what they can do in terms of problem-solving or resolving conflicts. A sales agent tends to thrive in such situations and can research and implement effective solutions
Finally, while a transaction broker can be less expensive than an agent, the agent tends to sell the listing for a higher price and on better terms, thereby covering their expenses.
Understanding the differences between a transaction broker, a traditional real estate agent, and a transaction coordinator is important for deciding whom to hire to manage your property deal.
So, to answer our initial question: Do you need a transaction broker? No. Working with a real estate agent and their transaction coordinator offers many more benefits.
To conclude, let us share a tip with you on the best source of transaction coordinators.
Market Leading
Real Estate Transaction Coordinators
Hand off your transactions, media, and marketing to a real estate TC.
AgentUp – Your Source for Transaction Coordination
AgentUp is your source for excellent, affordable real estate transaction coordinator services.
Our TC solutions are designed to streamline your transactions, minimize errors, and ensure a smooth closing process.
AgentUp’s real estate transaction coordinators are highly trained, fully experienced in the US real estate industry, fluent in English, and adept at working remotely.
AgentUp takes pride in helping you find the best transaction coordinator services for your business. So, talk to them!
Schedule a free consultation call today and learn about all they offer, their prices, the onboarding process, and how to get the exact TC services you need to grow your business.
Also, there are many reasons to choose AgentUp, including the following:
- Customized Solutions: They learn your business requirements and match you with the right services and solutions
- Dedicated Support: A US-based customer support team is committed to providing exceptional service every step of the way
- Competitive Rates: Enjoy affordable transaction coordination services at competitive prices
- Trusted Industry Leader: Their innovative services have been featured on ABC, CBS, Fox News, USA Today, and industry podcasts and blogs
We hope you enjoyed this article on what is a transaction broker in real estate and do you need one? Please feel free to explore these additional related resources:
- Most Affordable Transaction Coordinator Services (Top 7)
- Exploring Real Estate Transaction Coordination – An Interview With a Veteran TC
- 4 Benefits of Real Estate Transaction Coordinators for Agents
- 5 Ways a Transaction Coordinator Can Save You Time
- Real Estate Coordinator Checklist (Ultimate Guide)
