Differences Between Real Estate Agents, Realtors, and Brokers
One of the questions I often get is if there is a difference between a Realtor®, a Real Estate agent, and a broker.
The difference between a real estate agent and Realtor® is significant.
Hiring someone to help you with a real estate transaction can sometimes be confusing since many professionals are vying for your services.
Various real estate terms seem like the same thing to make things more confusing.
You have real estate agents, Realtors, and brokers. Are there differences between the three? And if so, how do those differences impact you as a home buyer or a seller?
It is common to see the words agent, Realtor®, and broker interchangeably.
You could compare this situation to certain words becoming standardized in our vocabulary. For example, people use the term whirlpool tub interchangeably with “Jacuzzi” even though Jacuzzi is a brand.
Below is a comprehensive review of the differences between Realtors, Real Estate agents, and brokers.
You’ll even learn that owning a real estate company is possible without being involved in day-to-day operations or licensed.
Without a doubt, lots of people wonder what the difference is between a real estate agent and a Realtor.
By the time you’re done reading, you’ll have a comprehensive understanding of each.
Real Estate Agents Explained
Let’s examine what a real estate agent is and some similarities to being a Realtor.
What is a Real Estate Agent?
A licensed real estate agent is a professional in the real estate industry who participates in real estate transactions. Their job is to help buyers and sellers come together and make transactions. They get paid through commission, usually an agreed-upon percentage of the property’s sale price.
A real estate agency and clients negotiate a standard real estate agent commission.
Real estate agents work for real estate brokerages. The brokerage is who you are hiring, and the agent is the brokerage’s representative for your transaction.
Real Estate agents are considered independent contractors.
What Does it Take to Become a Real Estate Agent?
To become a real estate salesperson, you must take and pass the classes and exams your state requires. There are no federal requirements for real estate agents – it all happens at the state level.
Depending on the state, it can take between 30 and 90 hours of classroom instruction to prepare for the exam. Part of the requirements is passing the licensing exam.
Real estate agents must also pay an annual licensing fee and may need to complete continuing education.
These are all requirements to get a Real Estate license and start selling real estate. Once their obligations are filled, licensed agents can begin performing their functions as part of their real estate careers.
A broker will supervise real Estate agents, typically called the designated broker or principal broker.
Are There Different Types of Real Estate Agents?
Yes. A sales agent can work for buyers, sellers, or both. Although there are no job titles, real estate agents are referred to as buyers’ brokers or buyers’ agents when representing buyers.
When representing a seller, they are referred to as a listing agent, listing broker, seller’s agent, or selling agent. There are fundamental differences that we’ll get into.
What Are The Responsibilities of a Real Estate Agent?
Real estate agents represent their client’s best interests, whether buyers or sellers. They will help buyers find their desired home and negotiate the best price. They also help sellers find buyers and negotiate the best price for the market.
Real estate agents handle a long list of tasks on behalf of their clients, ensuring that the clients get the best possible results from their transactions.
Some of the most vital roles of a real estate agent include:
- Setting the correct price of a home.
- Marketing properties, both online and offline, through various proven methods.
- Negotiating offers when they are received either from a client or a buyer’s agent.
- Keeping an open line of communication with clients before and during a transaction.
- Helping buyers find and close a home.
- Numerous other tasks support the successful completion of a purchase and sale.
It should be understood that buyer and seller agents can have very different tasks in their everyday business operations.
Many consumers do not realize there are different skill sets for real estate agents. Here are nine things a buyer’s agent does for their clients.
Conversely, you can see what a seller’s agent does for their clients. Both have significant roles in the transaction by doing different tasks.
There are differences between what buyers’ and sellers’ agents do for their clients.
Summary of Key Responsibilities of a Buyer’s Agent
These are all the things a buyer agent will do to assist in buying a home.
- Help a buyer get pre-approved for a mortgage, including suggesting a lender or lenders to interview.
- They help you find a house, including advising on neighborhoods, schools, and communities.
- Assist what to offer for a home and then negotiate the said offer.
- Recommend a professional home inspector and attend the inspection to understand the findings in-depth.
- Help negotiate any inspection repair requests from the buyer.
- Communicate with the seller’s agent and buyer’s attorney throughout the transaction.
- Monitor the buyer’s loan commitment to ensure the financing is on track.
- Finalize all loose ends before the closing and attend a final walk-through of the property.
Summary of Key Responsibilities of a Seller’s Agent
These are all the things that listing agents do to complete the selling process successfully.
- Do market research to price a home accurately based on current market conditions and comparative market analysis.
- Provide a real estate marketing plan designed to get a home sold quickly for the most money possible.
- Sign a listing agreement outlining the agreement between the real estate brokerage and the homeowner.
- List the property for sale in the Multiple Listing Service (MLS).
- Provide open houses if the client desires them.
- Communicate property before and during the sale.
- Ensure that the buyer is qualified before accepting an offer.
- Negotiate the best terms possible for the seller.
- Attend the home inspection to represent the best interests of the seller.
- Attend the home appraisal to provide the appraiser with essential information about the property.
- Help the seller finish up any necessary tasks to be able to close as planned.
Understand What is Dual Agency
In some states, becoming the buyer’s and seller’s agent is possible. This situation is what’s referred to as dual agency. If you are smart, you will not use a dual agent.
The real estate agent becomes a neutral party when you accept dual agency. They can no longer perform their regular tasks if they are buyers or listing agents. To be blunt, the agent cannot give you any counseling or advice – one of the crucial reasons you hire a real estate agent in the first place.
Since dual agency is so bad for consumers, it has been banned in several states. It is illegal.
As you can see, real estate agents play a significant role in completing a sale. A lack of communication is among the numerous consumer complaints against real estate agents.
This kind of behavior is highly unprofessional. Real Estate Agents and Realtors need to understand they are typically dealing with someone’s most significant financial asset.
RE/MAX, the franchise I work for has a humerus video worth a look. This video will be spot on with what they have experienced in a real estate transaction for many consumers. Agents should take special note not to be like the person portrayed in the video.
Video Real Estate Agent vs. Realtor: What NOT To Do
Licensed Realtors Explained
The difference between a Realtor® and a Real Estate agent will become clear shortly.
What is a Realtor®?
Did you know there is a difference between a Real Estate agent and a Realtor®? If you are shaking your head, no, you’re not alone. Most people have no idea that being a licensed Realtor® is much different than being an agent.
Most people I know assume that every real estate agent is a Realtor®. That is not the case.
A Realtor is a professional in the real estate industry who is a member of the National Association of Realtors (NAR). It is a federally registered membership mark.
Members of The National Association of Realtors swear to uphold the Code of Ethics in real estate. NAR is one of the most significant trade associations in the country.
Real estate agents and brokers are just some professionals who can join the organization.
Property managers and real estate appraisers can also join, among other professions. All members of the NAR pledge to abide by the standards and Code of Ethics of NAR.
NAR attempts to hold its members accountable for their professional behavior. Because of the higher standards of NAR, Realtors believe they can offer a better experience for their clients than the everyday real estate agent.
Whether buying or selling, picking a top local Realtor nearby is crucial to success.
What Does it Take to Become a Realtor®?
A licensed Realtor® must meet all the professional requirements of their position and pass a course on the NAR Code of Ethics every four years.
Local real estate boards strictly enforce the NAR Code of Ethics. Realtors must uphold the Code in their professional lives to maintain membership.
Members must also pay a yearly fee of $150 for 2022.
What Are The Responsibilities of a Realtor®?
Realtors have the legal responsibilities of their professions, like serving buyers and sellers as real estate agents or brokers.
Realtors, however, are held to a higher level of business standards and ethics. They must adhere to and follow the NAR Code of Ethics. Following the Code of Ethics is the most significant difference between being a Realtor and a real estate agent.
Below is an excellent summary of the 17 Articles of The Code of Ethics Realtors must adhere to. Remember that this is just a summary of the basics behind the Code. Each article in the Code has additional sub-codes detailing what rules Realtors must follow.
The Code is considered a living document that can be amended as necessary. It has been changed throughout its history to remain in lockstep with today’s best real estate practices.
NAR has also changed the Code when necessary to reflect fair housing laws and standards changes. NAR has some interesting statistics on Realtors.
Is it Worth Being a Realtor®?
In my professional opinion being a Realtor is worth it. For the past thirty-five years, I’ve taken pride in being a licensed Realtor®. Being highly ethical and moral is something that means a lot to me. Putting my client’s interests ahead of mine has always been a mantra worth following.
I would recommend to anyone who asks that being a Realtor vs. a Real Estate agent is the way to go.
Is it a Good Time to Become a Realtor®?
If you enjoy working with people becoming a licensed Realtor® can be extremely rewarding. Please understand, however, that making great money in your first couple of years can be challenging. Do not assume being a Realtor® or Real Estate agent is easy.
You will work long hours at inconvenient times like nights and weekends. If you put your heart and soul into it, like anything else, it will probably be something that pays you back.
The 17 Articles of The Realtor Code of Ethics
A licensed realtor must follow the Code of Ethics as the chief difference when comparing a Realtor vs. a Real Estate agent. A NAR member follows these truths as a regular part of their business.
Let’s look at NAR’s Code:
Protect and promote the best interests of buyers and sellers ahead of their own and treat all parties honestly.- A Realtor shall not exaggerate, misrepresent, or conceal any material facts about a property. They shall investigate and disclose when situations reasonably warrant it. REALTORS® shall only be required to find and disclose adverse factors reasonably apparent to a person with expertise in those areas required by their real estate licensing authority.
- Realtors shall cooperate with other real estate agents and brokers when it’s in their client’s best interests.
- A Realtor must disclose if they represent family members who own or are about to purchase real estate and if they are a principal party in a real estate transaction.
- Realtors cannot provide professional services in a transaction where the agent has a contemplated or present interest without disclosing that interest to all parties involved.
- A Realtor shall not collect a commission, rebate, or profit from the transaction without the seller’s knowledge, nor recommend third parties from which they will profit without the seller’s express consent.
- A Realtor shall refuse fees from more than one party, even if the law permits, without all parties’ informed consent.
- Realtors shall have a dedicated financial account holding clients’ funds always from the agents’ funds.
- Realtors will attempt to ensure that all written documents, including listing and purchase contracts, are easy to understand. A copy of all materials is signed and delivered to the appropriate parties.
- Realtors will not discriminate in providing services based on race, color, religion, sex, handicap, familial status, sexual orientation, gender identity, or national origin.
- Realtors will be competent to conform to standards of practice and not provide services outside the scope of their expertise.
- A Realtor must be truthful in advertising and marketing. Realtors also shall never quote pricing other than the agreed-upon listing price unless expressly permitted by the seller.
- Realtors cannot practice law and therefore give legal advice unless the Realtor is also an attorney.
- If charged with unethical practices, a Realtor shall cooperate and present all evidence requested by law.
- Realtors shall not make false accusations about another Realtor, discredit them, or file unfounded ethics complaints.
- A Realtor cannot solicit another Realtor’s client, nor can they interfere in their contractual relationship. Realtors are prohibited from intentionally marketing to another Realtor’s client.
- Realtors must submit disputes to the real estate board for mediation if the board requires it. If the argument isn’t resolved through conciliation or intervention is unnecessary, a Realtor will submit the dispute to arbitration by their board’s policies rather than litigate the matter.
Protect and promote the best interests of buyers and sellers ahead of their own and treat all parties honestly.As you can see, a licensed Realtor is held to a higher standard than a non-member real estate agent. It should be becoming clear there is a difference between a Realtor and a Real Estate agent.
What Benefits Do the National Association of Realtors Membership Fees Provide?
The dues an agent pays to be a member of NAR include the following benefits:
- Access to information webinars
- Code of Ethics training
- A subscription to Realtor Magazine
- Market research and technology reports
- Historical data requests
- Library and research services
- Discounts on certification courses, conference attendance, mobile phones, car rentals, dental and health insurance, and books/brochures.
Real Estate Brokers Explained
Let’s examine the difference between a real estate broker and an agent.
What is a Broker?
The real estate broker vs. agent is a bit more clear.
A real estate broker is a real estate professional who has continued their education beyond a real estate agent’s level – successfully obtaining a state real estate broker license.
Brokers may work as independent agents or start brokerages and hire other real estate agents and Realtors to work for them. Some of the most recognized real estate agencies in the world include:
- RE/MAX International
- Coldwell Banker
- Century 21.
- Keller Williams
- ERA
- Redfin
Many of these real estate franchises are in the United States and worldwide.
What Does it Take to Become a Broker?
A broker must go through all the training, pass all the exams required for a real estate agent, and then continue their education to obtain a broker’s license.
Licensing requirements vary by state, but you must pass the broker’s exam.
When comparing real estate brokers vs. agents, the chief legal difference is holding a broker’s license.
Most brokers will have years of experience as agents before becoming licensed brokers.
What Are The Responsibilities of a Broker?
As more experienced and qualified real estate professionals, brokers tend to handle the higher-level requirements of a real estate transaction.
If they employ real estate agents, the broker may focus more on a deal’s detailed paperwork and legal requirements, while the agents focus on the basics of the purchase or sale – like helping buyers find homes and helping sellers find buyers.
Most significant real estate brokers almost always oversee all the agents they employ daily.
Outside of managing other agents, one of the significant functions of a real estate broker is to hold a buyer’s earnest money deposit in an escrow account duly accounted for after a transaction.
The typical difference between a broker and a real estate agent is it usually includes an active ownership role.
What is an Associate Broker?
An associate broker has passed the broker’s exam and has a broker’s license but has chosen to work for another broker.
What is a Managing Broker?
On the other hand, managing brokers oversee the daily operations of running a real estate brokerage firm. They run the brokerage firm, including managing staff and hiring and training new agents. They will oversee everything to make sure the business functions smoothly.
An associate broker and managing broker will also be licensed brokers.
Difference Between a Realtor and a Broker
The difference between a broker and a Realtor will likely be just the ownership piece. The vast majority of real estate brokers are also Realtors.
How Does This All Apply to Home Buyers and Home Sellers?
Searching for an agent can help know the differences between real estate agents, Realtors, and brokers. Things to think about include:
- Real estate agents work for someone else. Nothing is wrong with this fact – most options you choose when finding an agent will work for a brokerage. But it is worth remembering that you are hiring an agency, not just an individual, when hiring a real estate agent.
- Realtors hold themselves to a higher standard. Most Realtors are proud of being part of such a well-established, highly-respected organization as the National Association of Realtors. They know they have to try harder and be more careful to adhere to their Code. The first requirement they follow is ‘honesty,’ worth prioritizing when choosing an agent to handle the most significant financial transaction of your life.
- Brokers have more qualifications than agents. Many Realtors and real estate agents are qualified to help you buy or sell a home. Of course, if you can hire a broker, you are justified in feeling some security knowing that your representative has achieved higher education and certification. Many brokers, however, choose not to compete with their agents.
How Does An Owner Differ From a Real Estate Broker?
In many businesses, you have a “silent partner.” In real estate, this is no different. You can have a real estate company owner who does not possess a real estate brokerage license or even be a licensed salesperson. The owner typically remains out of sight of the business’s everyday operations.
An owner, however, could be consulted on vital business decisions surrounding the company. Sometimes owners of real estate companies are investors that see it as an excellent business opportunity.
It’s also possible that the company’s broker needed funding to establish the business. Nothing prevents a non-licensed individual from having a stake in a real estate firm.
Is it Better to Be a Real Estate Agent or Broker?
There is no right or wrong answer. The choice will boil down to a few factors. Do you enjoy the sales aspect of real estate, or are you more in tune with managing other people? Being a real estate agent might be more suitable if you strictly enjoy working with buyers and sellers.
On the other hand, if you like having more control of your business and having people working underneath you, a real estate broker might be a better choice.
While it is possible to do both as a real estate broker, many real estate agents have a problem with their broker competing with them for business.Click To TweetWho Gets Paid More Real Estate Agents or Real Estate Brokers?
Generally, real estate brokers get paid more than real estate agents. Real Estate brokers will receive a percentage of all the commissions real estate agents collect. However, companies’ top producers may make more than real estate brokers.
According to the U.S. Bureau of Labor Statistics, as of 2020, a real estate broker’s average salary was $60,370. The average salary for a real estate agent was $49,040.
You can see more exciting statistics comparing real estate brokers vs. agents on their websites.
Should I Hire a Realtor, Real Estate Agent, or Broker?
It is reasonable to want to hire the best person you can find for the job of helping you buy or sell your home. However, it is crucial to maintain the proper perspective in searching for the right candidate.
Things like local market knowledge, experience, recent satisfied references, a track record of success, and a good working relationship are worth considering, along with education levels and association memberships.
Do the work of interviewing candidates and asking the questions that matter – such as how many homes they have sold recently, how close the sale price was to the original price, and other vital questions like market time.
You may find a real estate agent that fits your needs to a T. Don’t avoid hiring the right person just because they are not a broker or a Realtor®.
Final Thoughts on What is a Real Estate Agent
Whether you hire a real estate agent, Realtor, or broker, it makes sense to do a careful interview process. Hiring someone to represent your interests is one of the most critical aspects of buying or selling a home. Not doing cautious research is just asking for trouble.
Hopefully, you now understand the differences between real estate agents and Realtors. While there are some similarities between all three types of agents, there are also noticeable variations.
Additional Valuable Real Estate Resources
- Don’t do these things when selling a home – learn what not to do when selling a house. If you make some of these mistakes, especially with financing, you might lose out on purchasing your dream home.
- What to know about selling high-end homes – get some excellent tips on how to sell a luxury home. Some additional marketing avenues should be taken when selling an estate.
Use these additional helpful resources to make intelligent decisions when selling a home.
About the author: Bill Gassett, a nationally recognized leader in his field, provided the above Real Estate information on what is a Real Estate Agent vs. a Realtor vs. a Broker: Similarities and Differences Explained. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of Metrowest towns for 37+ years.
Are you thinking of selling your home? I am passionate about Real Estate and love sharing my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.
