How the Real Estate Brokerage and Mortgage Brokerage Industries Operate


Have you heard the terms brokerages, brokers, associate brokers and associates – but you’re not sure what the difference is?

The real estate and mortgage brokerage industries in Alberta operate using a brokerage system. (Property management is part of the real estate brokerage industry.)

What is a brokerage?
In a brokerage system, the brokerage is a legal business entity, licensed by the Real Estate Council of Alberta (RECA), to trade in real estate or deal in mortgages. The brokerage employs licensed individuals as associates or associate brokers, depending on their level of education and experience.
Brokerages can be one-person operations, or they may have hundreds of real estate or mortgage professionals; they can be part of a well-known franchise or they can create their own brand. Regardless of how a brokerage operates, all real estate and mortgage brokerages must be licensed by RECA.

What is a broker?
A brokerage must have an authorized broker to oversee its operation. Brokers supervise all staff, including associates or associate brokers registered with the brokerage, and all unlicensed administrative staff. In small brokerages, the broker often works with clients in addition to management duties; in larger brokerages, brokers often focus on management. Brokers are required to have additional education and experience before becoming brokers. A brokerage can only have one licensed broker.

What is an associate or associate broker?

Real estate and mortgage associates hold the primary licensing level in their industry. RECA issues associates a licence after they complete the required education, and they must register with (become employed by) a brokerage.

You may hear real estate industry professionals be referred to as “real estate agents.”

Associate brokers are individuals licensed as real estate professionals who have the education of a broker, but who do not want to have a broker licence and take responsibility for a brokerage. There are no associate brokers in the mortgage industry.

When you sign a service agreement with a real estate or mortgage brokerage professional, outlining the services he or she will provide, it is actually the brokerage you are entering into a formal relationship with, not the individual broker or associate. Though the individual industry professional is signing that agreement with you, they are acting as a representative of their brokerage.

If you’re not satisfied with the services your real estate or mortgage brokerage professional is providing to you, your first step should be to speak with their broker. Ultimately the brokerage is responsible for providing the services outlined in the service agreement. Brokers are held responsible for their own conduct and the conduct of associate brokers, associates and employees of the brokerage, and as such, they have an important role to play in the professionalism and accountability of Alberta’s real estate and mortgage brokerage professionals.