When you’re buying a home, you’ll often hear the terms “Realtor” and “real estate agent” bandied about, often interchangeably. But, in fact, there are significant differences among the real estate sales professionals with these designations. Today, we’ll break down the fundamental differences between a Realtor and real estate agent, and give you some idea which one might be best to use for the purchase or sale of your home.
Real estate agent
A real estate agent is a licensed sales professional that can assist consumers in buying or selling a home, commercial property, or engage in property management functions.
The agent may assist in real estate transactions either as a sales professional, an associate broker or a broker.
There are approximately 466,000 real estate agents in the United States, a number that is expected to grow by 11% by 2020.
Real estate agents handle documents in a real estate transaction.
They can also mediate between buys and sellers in purchase negotiations.
To become a real estate agent, a person must:
Requirements vary by state, but real estate licensing applicants must complete anywhere between 30 to 90 hours of classroom instruction from an accredited school.
They then must pass a state licensing exam that covers national as well as state and local real estate law, standards and practices.
Keep his or her license in good standing, including taking continuing education courses and satisfying professional requirements.
Real estate agents must also pay an annual licensing fee and renew their license every year or two, depending on their state.
Realtors are real estate professionals who are agents as described above, but also members of the National Association of REALTORS (NAR).
As members of the NAR, they get access to the local Realtor Board’s MLS and keybox systems.
Realtors also abide by the Realtor Code of Ethics, a professional standard higher than that required of real estate agents.
Realtors have the advantage of posting and advertising their clients’ listings on the Realtor-owned MLS and other resources.
They’re also active in legislation, lobbying and governance in the real estate and housing industries as members of NAR.
There are more than one million National Association of Realtors members in the U.S., with membership not just reserved for real estate agents but also property managers, appraisers, real estate counselors and other professionals involved in the real estate industry.
The term “Realtor” is actually trademarked by the National Association of Realtors (NAR), which is the largest trade association in the United States.
NAR was founded in 1908 as the National Association of Real Estate Exchanges and later changed its name to The National Association of Real Estate Boards. But in 1916, a Minneapolis real estate agent named Charles N. Chadbourn who was acting vice president of the National Association of Real Estate Boards proposed the use of the term “Realtor.”
To protect the title, the NAR obtained a copyright and trademark on “Realtor” in 1950
The current name of National Association of Realtors was adopted in 1974.
Realtors are also very involved with positively impacting legislation in their industry through NAR’s political action committee (PAC), which is one of the most prominent lobbyists in the country.
The PAC works with Congress and the executive branch through lobbying, policy development, political field representatives, political communications, and grassroots advocacy.
To become a Realtor, a person must:
First be a real estate agent and satisfy all of those professional standards.
But in addition to having a valid real estate license, Realtors must be actively engaged in the real estate business, have no record of official sanctions involving unprofessional conduct and have no recent or pending bankruptcy
Join one of NAR’s 1,400 local real estate associations.
Applicants pay a one-time application fee, and then membership dues once the Board of Directors approves their membership.
They are expected to uphold the strict Realtor Code of Ethics, founded on the principles of “the Golden Rule.” In fact, it’s said that this Code of Ethics is largely what separates and defines Realtors.
New members bust attend an orientation to learn the NAR’s Code of Ethics & Professional Standards, which consists of 17 Articles, 71 supporting Standards of Practice and 131 explanatory case interpretations.
Some of the highlights of the code include:
- Demanding respect for others’ exclusive relationships with clients
- Arbitrating or mediating conflicts in-house
- Prioritizing client interests
- Practicing non-discrimination
- Disclosing conflicts of interest
- Providing clear written documents
An updated version of the code is published every January in Realtor Magazine.
If you have any more questions about real estate or selling your home, feel free to contact me and I’d love to help!