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Ask Curbed Answers: Pay the 'Broker'

Yesterday's question about whether you still have to pay your "broker" if you find out they're really a "salesperson" inspired many a fine analogy. On the stiff-'em side: "If you had found out that your doctor was in fact a veterinarian would you hesitate to walk in the other direction?" And representing the pay-up side: "Otherwise you're like a guy who knowingly uses a homeopathic remedy or sees a chiropractor and then denies payment for services, because you thought you were getting the services of a 'Doctor' in the legal, AMA-sanctioned sense."

In case that doesn't quite clear it up for you, here's the nut of it: The term "broker" is often used as a catchall to refer to both brokers and salespeople. However, there is a technical difference, as someone on the inside deftly explains:

Everyone who gets their real estate license when you start out is a licensed salesperson. After 1 year's experience and a certain point level (accrued by selling, renting, listing real estate) you can take your brokers exam to become a licensed broker. Some do but not everyone. The major advantage to taking the brokers test is that you can run your own firm if you wanted to unlike a licensed salesperson who has to work under a broker at all times.
As for whether the original querier should pay, nearly everyone who responded says, yes, she should. Of course, there's also this: "You should screw the broker. Real estate brokers in NYC are the most useless bunch of overpaid scum, who would sell their own mother to get some cash. Give them a little of their own medicine." Just make sure it's not homeopathic medicine.

After the jump, a couple of email responses for your further edificiation. More good stuff in yesterday's comments.

One reader writes, "There are many questions you should ask yourself.

"First of all, do you like the property that you are thinking of purchasing?

"Did the 'licensed real estate salesperson' find it for you? Did he work for you, i.e. Did he find different properties, follow your criteria and respect your needs, schedule appointments, do the investigative grunt-work, take you
around to see the properties?

"If the answer is yes to more than one of these questions than you should absolutely pay him! And WHY would you want to give the seller's broker more money? He didn't put in the work...and he definitely doesn't represent you.

"Of course...if your agent did in fact say that he was a broker,than I can understand your feelings. And, you should have a talk with him. But, didn't he ever give you his business card? That should tell you what his title is, 'sales associate' or otherwise.

A slightly less nuanced take: "You are such a piece of slime - a Licensed Real Estate Salesperson is licensed by the Attorney General of New York to act as your broker - they found the property and now although you like them, you want to cheat them out of their money - keep in mind - broker doesn't get paid - NO PAY - unless they find something for you - so pay up and do the right thing!"

And finally: "It doesn't matter. So many people call agents (or salespeople, which is the legal term according to new york state) brokers that we don't bother to explain it any more, we just go with it. A broker is perfectly qualified to show apartments for sale and make a deal. I know people who have been in the business for 20+ years and just never bothered to get their broker's license, because it does require going back to real estate class for 200+ hours (and if you've been doing it that long, it's not like they're going to be teaching you anything you don't already know) and x amount of deals. If they were happy with the agent's services before they found out they weren't a broker, then what's the big deal? I am "only" an agent, but people refer to me as "their broker" all the time. My card says agent, my ads say agent, I never say I am a broker but to most consumers, the term has become interchangable.

"I imagine they signed an agreement with this agent so yes, legally, they are bound to continue working with them. Ethically as well, because clearly they don't understand enough about the differences between the two terms and
haven't indicated how the sudden knowledge of the difference has penalized them.

In short, the agent wasn't trying to pull the wool over their eyes, imho. And clearly the customer doesn't know the difference. It just looks to me like they're trying to get out of having to pay the agent. Not cool."
· Ask Curbed: My Broker Is a Salesperson [Curbed]