What a broker of record is in real estate

A broker of record is the licensed real estate broker who holds legal responsibility for the brokerage and for the agents working under it. In places that use the term, such as parts of North America, an agent does not act alone: every deal an agent handles is carried out under the broker's licence, and the broker answers to the regulator for it. If you are buying, selling or renting through an agency, it helps to know who that person is and what they are accountable for.

What the role usually covers

The exact duties depend on the jurisdiction, but the role generally includes the following:

• Supervising agents. The broker is responsible for the conduct of the agents under the firm's name, including whether they follow licensing and advertising rules.
• Handling client money. Deposits and other funds held for a transaction normally pass through a regulated account that the broker is responsible for.
• Signing agreements. Listing and representation agreements are made between the client and the brokerage, not between the client and an individual agent.
• Keeping records. Contracts, disclosures and transaction files are held by the brokerage and are available to the regulator if needed.
• Dealing with complaints. If something goes wrong, the broker is the person who answers for the firm.

Why it matters to you as a client

The practical consequence is that your contract is with the brokerage. If an agent leaves the firm, your agreement normally stays with the brokerage, and if there is a dispute you have a licensed, accountable party to approach. That is also why you should read who the agreement is with, and check that the brokerage, not just the agent, is properly licensed.

How to check an agency before you sign

1. Ask for the brokerage's full legal name and licence number.
2. Look the licence up on the regulator's public register, where one exists, and confirm it is current.
3. Ask for the agent's own licence details and confirm the agent is registered under that brokerage.
4. Read the agreement to see who the parties are, the fee, how long it lasts and how it can be ended.
5. Ask where deposits will be held and how they are protected.

Broker of record versus related terms

Terminology differs from place to place. Some jurisdictions say principal broker, managing broker or designated broker for what is much the same job. In some, only a registered person holding specific qualifications may take the role. Do not assume that a title used in one country means the same thing in another. When someone uses the phrase, ask them to explain what they mean in that market, and then check it against the local regulator's description.

The Gulf angle

If you live in the Gulf, you are likely to deal with local regulators rather than a "broker of record" as such. Property markets in the region generally license both the brokerage and the individual broker, and many have a regulator or land department with a public register. The principle is the same as above: the firm has a licence, the individual has a card or permit, and both should be checkable. Where you do meet the phrase is when:

• you are buying property abroad, for example in Canada or the US, and dealing with an overseas brokerage from a distance;
• you are using a firm based in the Gulf that works with partner brokerages overseas;
• you are asked to pay a deposit to someone you have not met.

In the third case be especially careful. Send deposit funds only to the regulated trust or client account named in a written agreement, and confirm account details by speaking to the brokerage on a number you have found yourself on the regulator's register or the firm's official website. Do not rely on bank details sent in a message.

Questions to ask a brokerage from abroad

• Who is the responsible broker, and how can I verify their licence?
• Does the firm act for the buyer, the seller or both, and how is that disclosed?
• How and when are fees charged, and are any paid before the deal completes?
• What happens if the agent I am dealing with leaves?
• Which regulator handles complaints, and how do I contact it?

Mistakes to avoid

1. Assuming an impressive agent profile means the firm is licensed.
2. Signing an exclusive agreement without checking its length and exit terms.
3. Paying a deposit to a personal account.
4. Treating verbal promises as part of the contract. Ask for them in writing.

The broker of record is, in short, the accountable layer behind an agent. Knowing who that is, and confirming they hold a valid licence, is one of the simplest protections you have when handling a large property transaction.