The Differences Between a Real Estate Agent, a Broker, and a Realtor
Key Takeaways
- Know the roles before you hire: Real estate agents handle buying, selling, and renting under a broker’s supervision; brokers have advanced licensing and can operate independently; Realtors are agents or brokers who follow the National Association of Realtors’ higher ethical standards.
- Match the professional to the complexity of your transaction: For most residential purchases or sales, a licensed real estate agent is sufficient, but larger, more complex, or investment-focused deals may benefit from the experience and oversight of a broker.
- Look beyond titles to value and accountability: Choose professionals based on licensing, experience, and ethical obligations, working with a Realtor adds an extra layer of accountability through the NAR Code of Ethics.
At various points in the process of buying your home or rental property, you will encounter different categories of real estate professionals. These can be real estate agents, real estate brokers, home appraisers, mortgage brokers, home inspectors, etc.
It is vital to understand how these experts enable the smooth completion of your real estate investments and transactions.
Is a real estate agent the same thing as a realtor? Are these just different terms for describing the same professional role? If a real estate agent, real estate broker, and realtor are different, what are those differences?
This guide from Limehouse Property Management will tell you all the answers below.
Real Estate Agent vs Real Estate Broker vs Realtor
Although real estate agents, real estate brokers, and realtors all work with individuals and businesses to facilitate the sale and purchase of properties, they have specific levels of training and operate at different professional levels. The differences between them become significant as the complexity and scale of a transaction cost.
Real Estate Agent
A real estate agent is licensed to assist individuals and businesses in selling, buying, or renting their property. They help sellers find buyers, or vice versa, and in return for this service, they earn a commission, which is usually a percentage of the property’s sales price.
Real estate agents are also known as real estate associates or real estate salespeople. To become a real estate agent, an individual must meet their state’s requirements for becoming a licensed real estate agent. These requirements vary but usually include the following:
The person must:
- Be at least 18 or 19 years old, depending on the state.
- Have a high school diploma or GED and be a legal resident of the US.
- Complete a certain number of hours of pre-licensing education, as specified by the state.
- Pass the state’s real estate licensing exam.
- Submit their application, fees, and background check (if required) to the state’s real estate commission.
- Find a sponsoring brokerage firm that they will work under.
- Continue their education to maintain their license.
What Is an Estate Agent’s Role?
Real Estate Agents:
- A link between buyers and sellers, and organize all aspects of the transaction.
- Negotiate prices, other costs/fees, and help to submit documents.
- Convey offers, counteroffers, queries, and concerns between both parties.
- Guide their clients through the paperwork and requirements to conclude a transaction.
- Make sure their clients understand the terms and conditions of the deal.
If they represent the sellers, real estate agents are known as listing agents. They help to set the list price, recommend updates that increase the home’s value, market the home by placing it on the MLS (Multiple Listing Service), negotiate with potential buyers, and organize showings.
Estate agents who work on the side of the buyer are called buyer’s agents. They help their clients find properties that meet their criteria, in terms of location, pricing, size, and other parameters. They do all of the things that listing agents do (negotiate, prepare, and file documents, etc.), but they do them on behalf of the buyer.
Real Estate Broker
Real estate brokers are real estate agents who continue their education until they meet the criteria to receive a real estate broker license. Unlike real estate agents, they can work independently and also hire other real estate agents.
Real estate brokers do the same things that estate agents do and more:
- Help buyers find properties that match their criteria.
- Negotiate on behalf of their clients, prepare and convey offers and counteroffers.
- Help clients handle the paperwork and other processes leading up to the closing.
- Help sellers determine the market value of their properties and also market the properties.
- Like real estate agents, real estate brokers can work either on the side of the seller or the buyer.
There are three tiers of real estate brokers:
- Associate brokers are licensed real estate brokers who elect to work under another broker. Their role does not include the supervision of other agents.
- Managing brokers manage office operations and oversee transactions. Part of their job is to hire, train, and manage other agents, as well as oversee the office administrative staff.
- Principal or designated brokers ensure that the firm’s agents are following state and federal real estate regulations. This is the highest-level license in the brokerage firm.
Realtors
A realtor is a real estate professional who is an active member of the National Association of Realtors (NAR). The NAR sets standards for professional conduct that exceed those set by the general real estate licensing requirements. Realtors are required to follow these standards.
The National Association of Realtors’ strict Code of Ethics requires its members to go over and beyond the demands of the law to act with honesty and integrity. Realtors must place clients’ interests above their own commissions or other benefits. The NAR enforces the code of conduct through training and discipline.
Real estate professionals who meet the criteria to become members of the National Association of Realtors are licensed to add the Realtor trademark to their name. Members must pay an annual membership fee to retain their realtor status.
NARPM: Why Partner With a NARPM Member?
If you are seeking support in managing your rental property, consider partnering with a real estate expert who is a member of the National Association of Property Managers (NARPM).
NARPM is an association of real estate and property management professionals that specialize in the management of small, residential properties and single-family homes, and its members hold the gold standard when it comes to business ethics, professionalism, and fair housing practices in the property management industry.
When you partner with an NARPM member, you’re ensuring that your residential property receives expert oversight and care.
Conclusion
To conclude, when should you use a real estate agent, real estate broker, or realtor? It all depends on the scale of the transaction and the level of complexity involved. For most individuals and businesses, a real estate agent is all they need to help them buy or sell their property and complete the necessary paperwork.
If you’re a landlord looking to streamline the complexities of property management, partner with Limehouse Property Management.