When buying or selling property, many people use the terms “realtor” and “real estate agent” interchangeably. However, critical differences between the two are essential to understand. This article will explore the distinctions between a realtor and a real estate agent and why these differences matter.
A real estate agent is a licensed professional who helps clients buy, sell, and rent properties. They must complete pre-licensing education, pass a licensing exam, and fulfill continuing education requirements. On the other hand, a realtor is a real estate agent who is a member of the National Association of Realtors (NAR). This professional organization requires its members to adhere to a strict code of ethics and standards of practice. This means that a realtor has taken additional steps to demonstrate their commitment to professionalism and ethical behavior.
Understanding the differences between a realtor and a real estate agent can help buyers and sellers make informed decisions when choosing a professional to work with. Knowing what each title represents, they can select a professional who best suits their needs and preferences.
Understanding the Basics
Real estate agents and Realtors are both professionals who assist in buying and selling properties. However, there are some critical differences between the two.
Real Estate Agent
A real estate agent is a licensed professional who helps buyers and sellers purchase and sell properties. They can work with residential and commercial properties, depending on their area of specialization. Real estate agents can work as independent contractors or for a brokerage.
To become a real estate agent, an individual must obtain a state license. The requirements for obtaining a license vary from state to state but generally involve completing pre-licensing education, passing a licensing exam, and completing continuing education courses.
Realtor
A Realtor is a real estate agent member of the National Association of Realtors (NAR). NAR is a trade association representing real estate professionals in the United States. The term “Realtor” is a trademark of NAR and can only be used by association members.
To become a Realtor, an individual must first become a licensed real estate agent. They must then apply for membership with NAR and abide by its Code of Ethics and Standards of Practice.
National Association of Realtors (NAR)
NAR is the largest trade association in the United States, representing over 1.4 million members. Its mission is to advocate for the real estate industry and promote the professional development of its members.
NAR offers a variety of resources and services to its members, including education and training programs, market research, and advocacy efforts on behalf of the industry. NAR also operates the Realtor Property Resource (RPR), a national real estate information database available exclusively to its members.
In conclusion, understanding the difference between a real estate agent and a Realtor is essential when engaging with real estate professionals. While both can assist in purchasing and selling properties, a Realtor is a trade association member and is held to a higher standard of professionalism and ethical conduct.
Licensing and Membership
Licensing Requirements
To become a real estate agent or Realtor, one must obtain a state license. The licensing requirements vary by state, but generally, one must be at least 18 years old, complete a certain number of hours of pre-licensing education, and pass a licensing exam. Some states also require a background check and fingerprinting. After obtaining a real estate license, one must maintain an active license by completing continuing education courses and renewing the license periodically.
NAR Membership
The National Association of Realtors (NAR) is a professional organization for real estate agents and Realtors. Membership is voluntary, but many agents and Realtors join for the benefits and resources it provides. To become a member of NAR, one must first obtain a real estate license and be associated with a real estate brokerage. NAR requires its members to adhere to a code of ethics and complete ethics training. Additionally, NAR offers various resources and tools to its members, including market data, legal resources, and networking opportunities.
In summary, obtaining a state license is the first step to becoming a real estate agent or Realtor. After receiving a permit, one must maintain an active license by completing continuing education courses and renewing the license periodically. Membership in NAR is voluntary but offers many benefits and resources to its members, including adherence to a code of ethics and access to market data, legal resources, and networking opportunities.
Ethical Standards and Code of Ethics
Real estate agents and REALTORS® are held to high ethical standards and a code of ethics. This section will discuss the NAR Code of Ethics and the importance of ethics and professionalism in the real estate industry.
NAR Code of Ethics
The National Association of REALTORS® (NAR) has established a Code of Ethics that all members must follow. The Code of Ethics is a set of guidelines that outlines the ethical responsibilities of real estate agents and REALTORS®. The Code of Ethics consists of 17 articles that cover a wide range of topics, including duties to clients and customers, duties to the public, and duties to other REALTORS®.
The NAR Code of Ethics emphasizes the importance of integrity, honesty, and professionalism in the real estate industry. It is designed to promote ethical behavior and protect consumers from unethical practices. The Code of Ethics also includes arbitration provisions, allowing disputes between REALTORS® to be resolved without going to court.
Ethics and Professionalism
Ethics and professionalism are essential in the real estate industry. Real estate agents and REALTORS® are responsible for helping clients buy or sell one of their most significant assets, and they must do so with honesty and integrity. Unethical practices can lead to legal trouble, reputation damage, and business loss.
Real estate agents and REALTORS® must maintain high professionalism in their work. This includes being knowledgeable about the real estate market, providing accurate information to clients, and treating all parties with respect and fairness. They must also adhere to the NAR Code of Ethics and Standards of Practice.
In conclusion, the NAR Code of Ethics and the importance of ethics and professionalism play a significant role in the real estate industry. Real estate agents and REALTORS® must follow the Code of Ethics and maintain high professionalism to ensure they provide their clients with the best possible service.
Roles and Responsibilities
Real estate agents and Realtors have different roles and responsibilities in buying and selling. Understanding these roles is crucial for anyone looking to buy or sell a property.
Buyer’s Agent
A buyer’s agent represents the buyer’s interests in a real estate transaction. They help buyers find properties that meet their needs and negotiate the best possible price and contract terms for their clients. The buyer’s agent is responsible for ensuring the buyer’s best interests are always the top priority.
Listing Agent
A listing agent represents the seller’s interests in a real estate transaction. They help sellers list their properties, market them to potential buyers, and negotiate the best possible price and contract terms for their clients. The listing agent ensures that the seller’s best interests are always the top priority.
Managing Broker
The managing broker oversees the agents’ work in a real estate brokerage. They ensure all agents comply with the law and the brokerage’s policies and procedures. They may also provide training and support to agents to help them improve their skills and grow their business.
Real estate agents and Realtors have a variety of roles and responsibilities in the buying and selling process. Whether you are a buyer or a seller, working with an agent who will represent your best interests and help you achieve your goals is essential.
Financial Aspects
Commission Structure
The main difference between a real estate agent and a Realtor is that the latter is a National Association of Realtors (NAR) member and is bound by the NAR’s Code of Ethics. This code sets forth professional standards that Realtors must uphold, ensuring that consumers can trust and rely on the agents they work with. The commission structure is one of the most significant financial aspects of working as a real estate agent or Realtor.
Real estate agents and Realtors typically earn a commission on selling a property. This commission is usually a percentage of the sale price and is split between the listing agent and the buyer’s agent. The commission earned by the listing agent is typically higher than that earned by the buyer’s agent, as the agent is responsible for marketing the property and securing a buyer.
Other Financial Considerations
In addition to the commission, there are other financial considerations that real estate agents and Realtors must consider. Membership dues for the NAR and local real estate boards are an expense that Realtors must pay to maintain their membership and access to resources. Insurance, including errors and omissions insurance, is another expense agents and Realtors must consider.
Real estate agents and Realtors, typically considered independent contractors, are also responsible for paying their taxes. This means they pay the employer and employee portions of Social Security and Medicare taxes. Agents and Realtors must also pay self-employment taxes on their commissions earned.
Overall, the financial aspects of working as a real estate agent or Realtor can be complex and require careful consideration. Agents and Realtors must understand their commission structure, membership dues, insurance needs, and tax obligations to ensure they are financially successful in their careers.
Real Estate Transactions
Real estate transactions can be complex and require careful attention to detail. Whether buying or selling a home, working with a real estate professional can help ensure the process goes smoothly. Here are some key things to keep in mind when it comes to real estate transactions.
Buyers and Sellers
When buying or selling a home, working with someone who understands the local market and has experience with real estate transactions is essential. A real estate agent or REALTOR® can help guide you through the process and provide valuable insights into pricing, negotiations, and other important factors.
Contracts and Negotiations
Contracts and negotiations are a critical part of any real estate transaction. Your agent can help you navigate the legal complexities of buying or selling a home and ensure that all parties are satisfied with the terms of the agreement. This may include negotiating the price, contingencies, and other vital details.
Some other essential things to keep in mind when it comes to real estate transactions include:
- Showings: When selling a home, you must prepare it for showings and make it as attractive as possible to potential buyers. Your agent can help you stage your home and make it look its best.
- Home inspections: Buyers often request a home inspection before finalizing a sale. This can help identify any issues with the property and ensure that both parties are aware of any potential problems.
- Property transactions: Real estate transactions involve various properties, from single-family homes to commercial buildings. Your agent should have experience with the type of property you are interested in buying or selling.
- Lease agreements: If you are a landlord or tenant, lease agreements can be a critical part of your real estate transactions. Your agent can help you negotiate the lease terms and ensure all parties are satisfied.
Overall, working with a real estate professional can help ensure that your real estate transactions go smoothly and that you get the best possible outcome. Whether buying, selling, or leasing a property, a knowledgeable agent can help guide you through the process and provide valuable insights.
Market Specialization
Regarding real estate, there are different areas of specialization, and choosing the right professional for your needs is essential. Both real estate agents and Realtors can specialize in various types of markets, such as residential or commercial real estate.
Residential Real Estate
Real estate agents and Realtors specializing in residential real estate deal primarily with buying and selling homes. They work with clients to find properties that meet their needs and budget and help them navigate the complex process of buying or selling a home. They can advise on home staging, pricing, and marketing strategies to help clients get the best possible deal.
Commercial Real Estate
On the other hand, real estate agents and Realtors specializing in commercial real estate deal with properties used for business purposes. This can include office buildings, retail spaces, warehouses, and more. They work with clients to find properties that meet their needs, such as location, size, and amenities. They can also advise on leasing, property management, and other aspects of commercial real estate.
It’s important to note that some real estate professionals specialize in residential and commercial real estate, while others focus exclusively on one or the other. When choosing a real estate professional, it’s essential to consider their level of experience and expertise in the specific market you’re interested in.
Overall, whether you’re looking to buy or sell residential or commercial properties, there are real estate professionals who can help you navigate the local market and achieve your goals.
Professional Development
Real estate agents and Realtors must complete continuing education courses to maintain their license. These courses can cover various topics, including legal issues, ethics, and marketing. Continuing education is essential for agents to stay up-to-date with real estate market changes and maintain their licenses.
Continuing Education
Education continuing is required for both real estate agents and Realtors. The exact requirements vary by state, but typically, agents must complete a certain number of hours of education every few years. Continuing education courses can be taken online or in person, covering various topics, including legal issues, ethics, and marketing.
Career Advancement
Real estate agents and Realtors can advance their careers by obtaining additional certifications and licenses. For example, some agents may become designated or associate brokers, requiring further education and experience. Others may open their brokerage firm or work as independent brokers.
To advance their careers, agents may also specialize in a particular real estate area, such as commercial or luxury properties. Specializing can help agents stand out in a crowded market and increase their earning potential.
Overall, continuing education and career advancement are essential for real estate agents and Realtors to stay competitive. By staying up-to-date with changes in the market and obtaining additional certifications and licenses, agents can provide better service to their clients and increase their earning potential.
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Frequently Asked Questions
What distinguishes a Realtor from a real estate agent?
- A Realtor is a real estate agent member of the National Association of Realtors (NAR).
- A strict code of ethics and standards of practice binds realtors.
- They must complete continuing education courses to maintain their membership.
What are the differences between a Realtor, a Real Estate Agent, and a Broker?
- A real estate agent is licensed to help clients buy, sell, or rent properties.
- A Realtor is a real estate agent who is a member of the NAR.
- A broker is a licensed agent who has completed additional education and can manage their brokerage.
How do the roles and salaries compare between Realtors and real estate agents?
- Realtors and real estate agents have similar roles in helping clients buy, sell, or rent properties.
- Salaries can vary widely depending on experience, location, and other factors.
Are there any differences between a Realtor and a real estate agent in Canada?
- In Canada, the term “Realtor” is a trademarked term used exclusively by members of the Canadian Real Estate Association (CREA).
- CREA members must adhere to a code of ethics and standards of practice.
Can someone be a real estate agent without being a Realtor?
- Yes, someone can be a licensed real estate agent without a Realtor.
- However, becoming a member of the NAR and earning the Realtor designation can provide additional benefits and resources.
What are the steps to becoming a licensed real estate agent?
- Requirements vary by state or province but generally include completing pre-licensing education, passing a licensing exam, and completing continuing education courses.
- Additional requirements may include a background check and sponsorship by a licensed broker.
