Broker vs Salesperson: Key Differences
Understand the critical differences between a licensed real estate broker and salesperson under Philippine law. supervision requirements, scope of practice, and independent authority.
Defining Broker and Salesperson
“Real estate broker - a duly registered and licensed natural person who, for a professional fee, commission or other valuable consideration, acts as an agent of a party in a real estate transaction to offer, advertise, solicit, list, promote, mediate, negotiate or effect the meeting of the minds on the sale, purchase, exchange, mortgage, lease or joint venture, or other similar transactions on real estate or any interest therein.”
What This Means
A broker is a fully licensed professional who can independently practice real estate. they are "registered and licensed" and act as an agent directly. A salesperson, by contrast, is "accredited" (not licensed) and performs services "for, and in behalf of" a broker. The broker is the principal; the salesperson is the broker's agent.
- Brokers are "registered and licensed". salespersons are "accredited"
- Brokers can independently act as an agent of a party in a transaction
- Brokers receive fees/commissions directly from clients
- Salespersons perform services for and on behalf of a broker
- Salespersons receive compensation only from their supervising broker
Real-World Scenario
Anna recently got her salesperson accreditation. She found a buyer for a property listed by developer X. Anna prepares the reservation agreement and directly collects the reservation fee from the buyer.
Can Anna do this legally?
The Supervision Requirement
“Real estate salespersons shall be under the direct supervision and accountability of a real estate broker. As such, they cannot by themselves be signatories to a written agreement involving a real estate transaction unless the real estate broker who has direct supervision and accountability over them is also a signatory thereto. No real estate salesperson, either directly or indirectly, can negotiate, mediate or transact any real estate transaction for and in behalf of a real estate broker without first securing an authorized accreditation as real estate salesperson for the real estate broker, as prescribed by the Board.”
What This Means
The law is explicit: salespersons are under "direct supervision and accountability" of a broker. They cannot sign agreements alone. the broker must co-sign. They cannot even begin transacting without first being accredited to that specific broker. The broker who employs an unaccredited salesperson is also violating the law.
- Salespersons are under "direct supervision and accountability" of a broker
- Cannot sign agreements unless the supervising broker also signs
- Must secure accreditation for a specific broker BEFORE transacting
- The broker is guilty if they employ an unaccredited salesperson
- Accreditation is broker-specific. you must be accredited to that broker
Real-World Scenario
Broker Rodriguez has 25 salespersons under him. He only secured Board accreditation for 15 of them. The other 10 are already showing properties and negotiating with buyers.
What violations are occurring?
Compensation: Who Pays Whom
“No salesperson shall be entitled to receive or demand a fee, commission or compensation of any kind from any person, other than the duly licensed real estate broker who has direct control and supervision over him, for any service rendered or work done by such salesperson in any real estate transaction.”
What This Means
The compensation chain is strict: clients pay the broker, and the broker pays the salesperson. A salesperson cannot receive or even demand fees from anyone other than their supervising broker. This protects consumers and maintains the broker's accountability for the transaction.
- Salespersons can ONLY receive compensation from their supervising broker
- Cannot receive fees from buyers, sellers, developers, or any other person
- Cannot even "demand" compensation from anyone but the broker
- The broker receives commission from the client, then pays the salesperson
- To receive commission directly, you must upgrade to a broker license
Real-World Scenario
Dave has been a salesperson for 5 years under Broker Santos. A grateful buyer offers Dave a P50,000 "tip" directly for his excellent service. Dave's broker doesn't know about it.
Can Dave accept this tip?
Frequently Asked Questions
Can a salesperson work for multiple brokers at the same time?
No. A salesperson must secure accreditation specifically for one broker. To work for a different broker, the existing accreditation must be terminated and a new one secured.
How do I become a real estate broker in the Philippines?
Under Section 14, you need: (a) Filipino citizenship, (b) a relevant bachelor's degree from a CHED-recognized institution, and (c) good moral character. You must then pass the PRC Real Estate Broker Licensure Exam with at least 75% average and no subject below 50%.
What qualifications does a salesperson need?
Under Section 31, a salesperson must have completed at least two (2) years of college and have undergone training and seminars in real estate brokerage as required by the Board. No licensure exam is needed. salespersons are accredited, not licensed.