Do Real Estate Agents Need a Broker to Work Legally? Here’s What You Should Know

Short Answer: In order to legally practice, real estate agents often need to be employed by a licensed broker. However, the whole story is more complex, particularly if you’re thinking about becoming a real estate agent or are simply interested in the inner workings of residential real estate transactions.

Let’s have a look at it.

What’s the Difference between a Real Estate Agent and a Broker?

Before diving into the legalities, it’s essential to understand the roles:

In Minnesota (and nearly all other U.S. states), real estate agents are required to operate under a licensed broker to practice legally.

Why Can’t Agents Work Alone?

Consumer protection and legal accountability are the main drivers. Brokers are legally responsible for every transaction they do while holding a licence. This include handling trust funds, examining contracts, monitoring moral behaviour, and guaranteeing compliance with all state laws.

By introducing an extra degree of regulation, these system safeguards consumers, sellers, and the sector as a whole.

Can I Be an Independent Real Estate Agent?

Not unless you hold a broker licence as well.

You must obtain your broker’s licence in order to work alone (as your own boss), which usually entails:

• A minimum of three years of experience as a licensed agent in Minnesota,
• Passing the Minnesota Broker Exam.
• Applying for and paying for a license through the Minnesota Department of Commerce. 
• Finishing further coursework, such as a 30-hour Broker’s Course.

After obtaining a broker’s license, you can: 

• Start your own broking.
• Employing and managing additional agents in addition to working independently.

So, Does a Realtor Need a Broker Too?

Yes, but here’s the difference:

• For agents or brokers who belong to the National Association of Realtors (NAR), the trademarked title Realtor® is used.
• Legal license requirements are not altered by being a Realtor®.

Therefore, if they are not licensed brokers themselves, even Realtors require a broker.

What Happens If an Agent Tries to Work Without a Broker?

If you don’t have a sponsoring broker, you risk having your license suspended or revoked and facing penalties from the Minnesota Department of Commerce.

• Lawsuits and legal issues
• A decline in industry credibility

In summary, unless they are acting under a broker’s licence, agents are not permitted to lawfully assist clients in purchasing or selling property.

Common Real Estate Structures in Minnesota:

Why Does This Matter to Buyers & Sellers?

Knowing how real estate agents are licensed benefits clients in the Lake Minnetonka region in the following ways:

• Selecting a trustworthy, respectable broker or agent
• Being aware of the person ultimately in charge of your transaction
• Having faith that your transaction will be handled properly and lawfully.

Final Thoughts: Trust the Structure behind the Sale

While it might seem like a formality, the broker-agent relationship is at the heart of a trustworthy real estate experience. Whether you’re buying a lakeside retreat in Excelsior or selling your family home in Chanhassen, it’s reassuring to know that agents are backed by the legal and ethical standards of a licensed broker.

If you’re working with Excelsior Real Estate, rest assured: our agents are not only licensed but also deeply familiar with the local market, state requirements, and the importance of transparent, professional service.