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What Is the Difference between a Broker and Salesperson?

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  • Written By: Nya Bruce
  • Edited By: Rachel Catherine Allen
  • Last Modified Date: 24 November 2016
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Although both a broker and a salesperson involve some form of sales, they are not the same thing: a broker serves as a middleman, or an agent, that brings buyers and sellers together. A salesperson sells a product, item or service to a buyer. Other differences between the two include licensing, how they are paid and training. For some professions, such as real estate, the broker is the person that a salesperson works for.

A broker and salesperson perform in two different capacities. The salesperson works for an employer and sells a product or certain services to his clients or customers. Brokers often represents the seller, which may be a person, company or a group of companies such as insurance companies. In some cases he may represent the buyer, or less frequently both the buyer and the seller. It is his job to bring the two parties together and to facilitate the sell of services or an object, such as a house.

When it comes to necessary education and training, the scope of difference between a broker and salesperson varies. A salesperson can obtain a job with little more than a high school diploma and on-the-job training. This depends on the type of sales, as some may require specialized classes or training courses. A financial or real estate salesperson will need specialized training for his chosen career and in some cases a college degree may be necessary when seeking employment.

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Unlike the salesperson, a broker generally will have more advanced training. In terms of a college education, a degree is often not mandatory although most states require some post-secondary courses. When it comes to real estate, another difference between a broker and salesperson is that a broker can own a real estate firm while a salesperson cannot. In this case, a salesperson works for the broker.

Salespersons and brokers have differing roles when it comes to insurance as well. When a salesperson is working for a single insurance agency he can become an independent agent for the company and run his own franchise business. An insurance broker, however, sells policies from multiple companies, and like in real estate, a salesperson works for him.

Regardless of the type of broker, licensing is a must. The need for licensing is one of the primary reasons that certain courses must be taken. A salesperson typically does not need a license to sell items such as general merchandise. When he is selling real estate or insurance however, licensing becomes necessary.

The method in which a broker and salesperson each receives his payment also differs. A salesperson may receive payment either from a typical salaried or hours-based paycheck, or he may earn a commission off the items or services that he sells. Brokers earn a commission based off the sale that he has arranged between the buyer and the seller. He may receive a commission from the seller, the buyer or both, depending upon the arrangement. In insurance and real estate, when a salesperson sells a home, the commission goes to the broker who then pays the salesperson.

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