In real estate, there are many confusing terms and definitions. One such term is a Realtor®. The public often confuses a real estate agent and a Realtor®.
Even agents often use these names interchangeably. While similar, they are not the same thing. Look at the difference between a Realtor and a real estate agent. It will give you a description of how these salespeople differ.
A Realtor® is a real estate agent member of the National Association of Realtors. The NAR is a professional association that real estate professionals can join. It is the largest trade group in the United States.
The National Association of Realtors® (NAR) is a nonprofit trade association that defines the term “Realtor®” as a federally registered collective membership mark that identifies a real estate professional who subscribes to its code of ethics.
It is a trademarked term that must be used properly. Before becoming an esteemed member, you must have a real estate license. It is one of the few requirements.
Having been one my entire career, the word that often comes to mind is professionalism.
Proper Pronunciation
For as long as I can remember, the word Realtor® has been mispronounced by many people. Realtor® has two syllables, not three. The correct pronunciation of Realtor® is “real-ter”, NOT “real-a-tor.”
What to Know About Realtors®
The definition of a Realtor® escapes many people. The word “Realtor®” is trademarked by the National Association of Realtors.
Those who have attained the status include agents who work as residential and commercial real estate brokers, property managers, appraisers, and other real estate professionals.
As of October 2023, there were 1,566,354 Realtors®. That broke down as 68% real estate agents, 20% real estate brokers, and 13% associate brokers.
Realtors® are expected to be knowledgeable in their field and abide by the National Association of Realtors’ Code of Ethics. This requires agents to uphold specific duty standards to clients, customers, the public, and members.
A Realtor® will work for a real estate broker. The typical real estate firm will have a managing broker overseeing day-to-day operations. There are often many members of the NAR within a real estate business.
Most will work for one of the top real estate brokerages in the US.
What is The Realtor® Code of Ethics?
NAR’s Code of Ethics and Standards of Practice, adopted in 1913, is one of the earliest sets of ethical guidelines to be adopted by any business group.
The code covers various topics, including honesty and integrity in business dealings, respect for others, and fair treatment for all.
The real estate code requires Realtors® to cooperate to serve their clients’ best interests.
There are 17 articles in the code of ethics. However, there are several sub-articles.
Realtors must follow the code and surrounding professional standards, which focus on honesty and fairness. These rules underscore how clients should be treated and how conflicts should be handled.
Becoming a Realtor® means you are held to a higher moral standard than just a licensed real estate agent. As a member of the NAR, you agree to abide by these strict codes of ethics in all real estate transactions.
Over the years, NAR’s code has had changes and additions.
When Was The National Association of Realtors Formed?
In 1908, the National Association of Real Estate Exchanges (NAR) founded the National Association of Real Estate Boards.
At its origination, it had 120 members, 19 boards, and a single state association.
Realtor® Demographics
According to the National Association of Realtors® 2022 member profile, these are the statistics:
- The most common type of license for real estate agents is a sales agent license. Approximately 67% of Realtors® hold this license, while 21% hold broker licenses and 14% hold broker associate licenses.
- The typical Realtor® is a 56-year-old white female who went to college and owns a home.
- There are 66% female Realtors® in the United States, and the median age of all Realtors® is 56.
- The median experience of all Realtors® is eight years.
- Median tenure is five years, being at their present firm for all Realtors®.
- The majority of all Realtors® worked 35 hours per week in 2021.
- The median gross income of Realtors® was $54,330 in 2021, an increase from $43,330 in 2020.
- The median number of residential transaction sides for all Realtors® is 12.
- The Bureau of Labor Statistics predicts a robust outlook for the industry, with brokers and agents expected to experience a 3% rise in employment growth until 2032.
Formal Education of REALTORS®
The statistics for the education of all Realtors® were:
- Having some college: 29%
- Getting a bachelor’s degree: 31%
- Obtaining a Graduate degree and above is 14%
- Having an Associate degree: 14%
- Some graduate school: 6%
- A High-school graduate: 7%
REALTOR® Affiliation With Firms
- Being an independent contractor: 87%
- Being an employee: 5%
- Other: 8%
How Do Real Estate Agents Differ From a Realtor®?
Real estate agents are people who their state has licensed to help people buy and sell real estate.
The National Association of Realtors (NAR) considers real estate agents who opt to become members and follow the code of ethics as Realtors.
Members of the National Association of Realtors (NAR) have access to a wealth of training, tools, and data to help them provide their clients with a professional experience.
NAR members will pay membership dues as part of being active members of the National Association of Realtors.
How Can The Realtor® Trademark Be Used?
The National Association of Realtors (NAR) strictly regulates the use of its trademark.
Members of a National Realtor Association or affiliate board are authorized to use the Realtor trademark in their name and the name of their business.
Association members cannot use the Realtor trademark as part of their legal corporate name.
If suspended or expelled from the association and losing the right to use the trademark, members may face legal issues if they change the corporate name.
According to the National Association of Realtors guidelines, qualified members must set the Realtor trademark in all capital letters and have it appear apart from their name with punctuation when using it as part of their name.
The NAR does not use the term “Realtor®” to describe its members or their profession descriptively. The NAR instead uses words like “agent,” “broker,” and “licensee.”
The association notes that Realtor® trademarks are not to be used as a designation of the licensed status of a professional.
What Does a Realtor® Do?
Many folks wonder what a Realtor® does to earn their keep. The chief job among Realtors® is to help consumers buy and sell real estate. A Realtor® can be a listing agent or a buyer’s agent.
What a Realtor® will do in a typical real estate transaction depends on what side of the fence they are working for. Listing agents vs. selling agents differ, and while there is some overlap, they have distinct job responsibilities.
Let’s summarize what a Realtor® will do for both buyers and sellers.
What They Do For Buyers
The duties for homebuying are substantial.
- Assists with a buyer getting pre-approved for a mortgage with a reputable lender. Agents typically provide multiple lenders for a home buyer to consider.
- They help you find the perfect house based on your wants, needs, budget, and the area in which you would like to live. House-hunting is one of the least essential roles of an exceptional agent.
- They provide research, due diligence, and advice before, during, and after consummation of the deal.
- Assists in negotiating an offer once a suitable home is located. Review the contract to ensure everything is in order.
- Once a property is under contract, they will help choose a reputable home inspector.
- A Realtor® will attend the home inspection to understand the assessment and represent the buyer.
- Realtors® will help negotiate any issues discovered due to the home inspection. They will provide recommendations if contractors are needed to diagnose the issues,
- Provide constant communication through a real estate transaction with other parties, such as the seller’s agent, mortgage lender, and real estate attorneys.
- A Realtor® will help monitor your mortgage loan commitment until closing.
- Realtors® are problem solvers and guide throughout the transaction to a successful closing.
What Do They Do For Sellers?
These are the duties expected during the home-selling process.
- When hired to sell a home, they will cover and explain all the listing paperwork, including any disclosures and the exclusive right to sell real estate contract. It is the most common listing agreement in a home sale.
- One of the most significant responsibilities of a Realtor® is to provide a seller with an accurate market value for their home. They will do this by gathering appropriate comparable properties and putting them together into a comparative market analysis report.
- An exceptional Realtor® will provide a comprehensive marketing plan both online and offline to get a home seller maximum exposure.
- A seller’s Realtor® will stay in constant communication with them throughout the transaction, whether it’s before an offer or once the sale goes pending.
- When an offer is received, they will ensure the buyer is qualified to purchase. This is one of the most vital aspects of the selling process.
- The seller’s Realtor® will engage the buyer’s agent and try to negotiate the best terms on the seller’s behalf.
- They will provide the necessary negotiation skills when confronted with home inspection requests from the buyer. Negotiating an inspection is often a crucial aspect of a Realtor’s® job.
- A Realtor® will also meet with the lender’s appraiser to ensure they have all the necessary information to complete a positive appraisal on the property.
- The best agents will be there for their seller clients throughout the transaction and place their needs ahead of their own. It might mean avoiding things like doing open houses or practicing dual agency, which offers more benefits to agents than homeowners.
How Do They Get Paid?
The real estate brokerage they work for will pay the commission due once the transaction is completed and the property is recorded in the registry of deeds.
Unless they are a real estate broker, realtors cannot receive direct payment. Most of the time, they do not receive a salary but are strictly paid by commission.
What is a Realtors® Commission?
Real Estate commissions are fees a Realtor® earns in a real estate transaction. The real estate compensation is entirely negotiable between a Realtor® and their clients.
Generally speaking, the average real estate commission in the US falls between 5-6% of a property’s sales price.
When there are two real estate companies involved in a transaction, the commission is usually split equally. However, it is possible there could be a different arrangement in some transactions.
The seller’s agent will determine the commission split in cooperation with the seller.
Real Estate commissions are never fixed due to the Sherman Anti-Trust Act. They established the act to ensure that real estate businesses would not get together to bar competition.
How Much Do They Make?
Real Estate sales can be a very lucrative business. The longer you are in the industry, the chances of making an excellent living increase dramatically.
It is one of the top types of jobs in real estate. It is one of the best careers to make a significant income.
How much a Realtor® makes can vary from agent to agent tremendously. Generally speaking, the more time and effort you put in, the more money you can make.
Where they are located also can make a significant difference. For example, if the average sale price of a home where you work is $800,000, there is a greater chance your income will be higher than someone whose average sale price is $350,000.
A top-producing Realtor® can make a significant income right up there with doctors and lawyers. On the other hand, many don’t make a substantial income.
Those who think it’s easy are foolhardy and will quickly learn otherwise. Real Estate is a business with high levels of burnout. Realtors® come and go all the time.
How to Find a Realtor® Near Me?
There are several ways to find an excellent one nearby. If you have family or friends who have recently completed a real estate transaction, they could be a good referral source.
If you don’t know anyone who has done a recent sale, Google might be able to help. Search Realtors® near me or the best Realtor® near me.
What you will typically see are online savvy Realtors. They probably have some digital marketing expertise if they come up in the search results.
You will at least have some choices to go through the interview process. Asking interview questions and getting satisfactory answers could be the key to success.
What is a Realtor® Broker?
A Realtor® broker is a real estate broker who holds a broker’s license and is also a NAR member. They often have additional education due to being a licensed broker. To become a broker, you must pass an exam.
What is a Realtor® Associate?
An associate is someone who works for Realtors®. They are licensed agents who do many of the same tasks a Realtor® does. For example, they can show homes, write and negotiate offers, attend home inspections, and perform other customary work.
Associates are typically in entry-level positions and do administrative work while working under other agents. Realtors® usually have more in-depth knowledge of the real estate industry due to experience.
Becoming an associate is often the best way to learn the business. For example, some entry-level agents will be transaction coordinators to learn the ropes before becoming a full-time agent.
What is Realtor.com?
Realtor.com is a real estate site owned by Move Inc. and operated by the News Corp. They work from Santa Clara, California. Realtor.com is one of the most visited real estate listing websites in the United States.
The site helps buyers and sellers by delivering listings from multiple listing services around the country to the public. Realtor.com has a direct feed to the MLS, making information on the site timely and accurate.
Realtors® and real estate agents market their listings on the site to the benefit of their clients. Home buyers can look at properties at their leisure due to the association of the listing service with Realtor.com. It is one of the best resources online for finding homes.
As part of the home-buying process, buyers can also do their due diligence with the wealth of information provided. Home sellers can get the best price for their property by being marketed on the site.
Noteworthy Statistics
1. Over 90% of Realtors have completed at least 120 hours of pre-licensing education.
2. Realtors typically sell properties within an average of 45 days on the market.
3. The median income for Realtors in the United States is $52,000 annually.
4. Approximately 78% of home buyers and sellers use a Realtor® to assist with their transactions.
5. Realtors negotiate an average selling price of 97% of the initial listing price.
6. On average, Realtors handle about 15 transactions per year.
7. Around 74% of home buyers consider their expertise and knowledge extremely important when purchasing a property.
8. Realtors spend 10 hours per week prospecting for new clients.
9. Approximately 80% of Realtors utilize social media platforms for marketing and connecting with potential clients.
FAQs and Answers
Q: Can A Realtor Provide Guidance on Mortgage Options?
Absolutely! While their primary role is to help clients find the perfect home or investment property, they also possess a comprehensive understanding of the real estate market, including mortgage options.
They work closely with lenders and financial institutions, staying up-to-date on the latest mortgage rates and products. They can provide valuable guidance and recommendations regarding different mortgage options available to buyers, helping them make informed decisions that align with their financial goals and preferences. So, when working with a knowledgeable Realtor®, you can expect expert advice on mortgage options.
Q: Who Can Provide Recommendations For Finding a Reputable One?
Several reliable sources can provide valuable recommendations. One of the most trusted options is the National Association of Realtors (NAR). NAR maintains a comprehensive database of licensed and certified realtors who adhere to strict ethical standards and have a proven track record of success.
Additionally, local chambers of commerce often have resources and networks that can connect individuals with reputable Realtors.
Lastly, online platforms such as Zillow and Trulia have advanced algorithms that analyze Realtor performance, customer reviews, and transaction history to generate trustworthy recommendations for potential clients.
Q: What Should I Look For in a Good One?
There are several essential qualities to consider. First, expertise is crucial. Look for one with extensive knowledge and experience in the local market. They will be better equipped to navigate the intricacies of buying or selling a property.
Additionally, communication skills are essential. An excellent Realtor® should be an excellent listener and communicator, ensuring that your needs and preferences are understood and met throughout the process. Furthermore, trustworthiness is paramount. Seek one who is transparent, honest, and acts with integrity at all times.
Lastly, the best ones will be proactive and responsive. They will always stay on top of market trends and promptly address concerns or questions.
Proud to be One of The Best Realtors®
Over my thirty-seven years in the business, I’ve taken pride in being a Realtor®. Putting my client’s best interests first has always been one of my priorities. No games and no gimmicks.
Not practicing dual agency or putting my client’s homes at risk by doing open houses have been perfect examples. Doing the right thing, showing integrity, and being honest have been staples of my career.
Through it all, I’ve been a top-producing Realtor® for the past three decades. If you’re thinking of selling your home, feel free to reach out. I love the interview process, answering questions, and listening to concerns. A great real estate agent is only a phone call or email away.
About the Author: The above Real Estate information about what a Realtor® is was provided by Bill Gassett, a Nationally recognized leader in his field. Bill has expertise in mortgages, financing, moving, home improvement, and general real estate.
Learn more about Bill Gassett and the publications he has been featured in. 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 the last 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.
