What are the differences between an agent and a broker?

An agent and a broker are similar in that they both act as an intermediary between parties during a business transaction. However, there are important differences between them. An agent is someone who is employed by one of the parties involved in the transaction to negotiate and/or carry out the deal. An agent has fiduciary responsibilities to the party they represent, meaning they must act in that party’s best interests. Agents are typically bound by the instructions given to them by the party they represent. A broker, on the other hand, is an independent third party in the transaction, typically hired to negotiate and navigate the deal. Unlike an agent, a broker does not represent either party and, instead, acts solely on behalf of the transaction itself. A broker also does not have fiduciary responsibilities to any of the parties involved. Instead, brokers must work to ensure the transaction is fair and equitable to all sides. In New Jersey, a business transaction that involves an agent or broker must abide by state laws. For example, the New Jersey Real Estate Brokers’ License Act requires anyone acting as a real estate broker to be licensed and regulated by the state.

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