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Realtor vs Real Estate Agent: What’s the Difference?

Realtor vs Real Estate Agent: What’s the Difference?

In real estate, there are a variety of professionals who assist in buying and selling property, but the terms realtor vs real estate agent are often used interchangeably despite denoting different qualifications and affiliations. A real estate agent is an industry professional licensed to assist clients in the purchase, sale, or rent of real estate. These individuals must successfully complete a series of courses and pass a licensing state exam pertinent to the laws and practices of their state.

Realtor vs Real Estate Agent

A Realtor, on the other hand, is a real estate agent who has become an active member of the National Association of Realtors (NAR). This distinction is crucial, as it requires adherence to a strict NAR code of ethics or higher ethical standard established by the association, which places a heightened emphasis on professional conduct and client advocacy. By becoming members of the NAR, Realtors bind themselves to these ethical practices and are often held in higher regard for it.

Understanding the main difference of Realtor vs real estate agent is not just a matter of semantics but a reflection of the level of service and ethical standards that one can expect from these professionals. Whether individuals are looking to buy a new home, sell an existing property, or get into the real estate industry, recognizing the roles of Realtor vs real estate agent is the initial step in navigating the complex world of real estate transactions.

Defining the Terms: Realtor vs Real Estate Agent

realtor vs real estate agent

When discussing real estate professionals, it’s essential to understand the distinctions of Realtor vs real estate agent. Each term describes a different level of membership and adherence to defined standards within the industry.

What Is a Real Estate Agent?

real estate agent is an individual who has obtained a state license to assist clients in buying, selling, or renting properties. These agents are required to complete pre-licensing real estate courses, pass an examination specific to the state in which they work and become licensed professionals. To maintain this license, the agent must comply with continuing education requirements. It is important to note that while “real estate agent” is a general term, the roles within this profession can vary:

  • Seller’s Agent: Works on behalf of the seller to list, market, and negotiate the property on the seller’s terms.
  • Buyer’s Agent: Represents the property buyer, focusing on the buyer’s interests and needs throughout the transaction.

What Is a Realtor?

Realtor goes beyond being a real estate agent and is a trademarked term referring to a real estate professional who is a member of the National Association of Realtors (NAR). Membership in the NAR requires adherence to the NAR’s Code of Ethics and professional standards. Realtors hold varied roles in the industry and include residential and commercial real estate salespeople, brokers, property managers, appraisers, counselors, and others involved in the real estate industry. Becoming a NAR member signifies a commitment to ethics, which the association vigorously enforces.

What’s the difference? A Realtor vs Real Estate Agent?

One significant distinction of a Realtor vs real estate agent is that Realtors are members of the National Association of Realtors (NAR) and must adhere to its strict code of ethics. This is a crucial point for clients to consider when choosing an agent. Another difference is that NAR members can directly access the Multiple Listing Service (MLS), while licensed agents who are not NAR members may need to go through their principal broker.

1. Licensing and Certification

A Realtor holds a license while a real estate agent is certified. Both stand side by side, with the Realtor's license displayed prominently and the agent's certification badge visible. The contrast between the two is evident, realtor vs real estate agent

To practice real estate, individuals must navigate the certification and licensing process, which involves meeting state-specific requirements and passing a licensing exam. The journey from becoming a licensed real estate agent to a certified Realtor involves additional steps that validate expertise and adherence to a code of ethics.

Key Difference: Realtor vs Real Estate Agent

Obtaining a Real Estate License

The initial step for an individual is to obtain a real estate license, which grants the legal authority to assist in real estate transactionsState laws dictate the specifics, but typically, this process includes:

  • Education: Candidates must complete a pre-licensing course, which varies in length from state to state.
  • Licensing Exam: After meeting educational requirements, candidates must pass a state licensing examination. This exam typically covers a range of topics including property laws, contracts, and principles of real estate.

Becoming a Realtor: Additional Certifications

To become a Realtor, a real estate agent must then take further steps, which can be summarized as follows:

  • Joining NAR: Acquire membership with the National Association of Realtors (NAR), which requires an active real estate license and adherence to NAR’s strict Code of Ethics.
  • Certifications: While optional, Realtors may pursue additional certifications and designations offered by NAR to signify expertise in various real estate sectors such as residential, commercial, or property management.

Documentation and continued education are pivotal in maintaining both the license and Realtor status, ensuring professionals stay informed on the evolving state laws and best practices within the industry.

2. Professional Ethics and Conduct

realtor vs real estate agent

Professional ethics and conduct distinguish REALTOR vs real estate agent, both of whom are held to high standards in their interactions with clients and the public.

Key Difference: Realtor vs Real Estate Agent

The Code of Ethics for Realtors

The National Association of REALTORS® (NAR) has established the Code of Ethics which consists of 17 Articles, each with supporting Standards of Practice. This code sets the ethical foundation for all its members and articulates the duties REALTORS® owe to clients, the public, and other REALTORS®. The code’s preamble calls for every REALTOR® to strive for the preservation of a competitive real estate market. The key tenets include loyalty to clients, promoting their interests, and being honest with all parties.

Ethical Obligations of Real Estate Agents

While not all real estate agents are members of the NAR and therefore not all are termed as REALTORS®, they are still expected to adhere to ethical obligations. These typically stem from state licensing laws and include honesty, fairness, and integrity in all transactions. Ethical real estate agents should avoid misrepresentation, fraud, and deceit, and must strive to provide diligent and competent service to their clientele.

3. Roles and Responsibilities: Realtor vs Real Estate Agent

realtor vs real estate agent

In the real estate industry, agents play specialized roles, each with distinct responsibilities. They must effectively navigate transactions, marketing strategies, and negotiations to succeed in a competitive market.

Key Difference: Realtor vs Real Estate Agent

The Role of a Buyer’s Agent

buyer’s agent represents the interests of the property buyer, guiding them through the complexities of real estate transactions. They closely analyse the market to find properties that meet the buyer’s requirements, skillfully handle negotiations, and manage paperwork. Their duties extend to showing homes and educating buyers about the property’s nuances, always striving to secure the best possible outcomes for their clients.

Duties of a Listing Agent

On the other side of the transaction, a listing agent acts on behalf of the property seller. These agents concentrate on marketing the property, which includes staging, photographing, and listing the home across various platforms to attract buyers. They also schedule and conduct home showings and take the lead on negotiation efforts. The listing agent’s objective is to realize the home’s maximum sales potential, which involves meticulous paperwork handling and overseeing transaction details.

The Realtor’s Additional Duties

Realtors are real estate professionals who are members of the National Association of Realtors and adhere to strict ethical guidelines. In addition to the typical responsibilities of real estate agents, Realtors pledge to carry out honest and fair treatment for all parties in a transaction. They promote their clients’ best interests while maintaining integrity and transparency throughout the course of their professional duties. This includes a deeper commitment to ethical practices in all areas of marketingnegotiations, and transaction management.

The key difference of realtor vs real estate agent will help agents better understand the complexities of real estate industry.

4. Market Knowledge and Insights

Realtor vs Real Estate Agent

Realtor vs real estate agent plays pivotal roles in real estate transactions, leveraging their market knowledge to provide valuable insights. Their adeptness at understanding market trends and accurately assessing property values ensures clients are well-informed to make confident decisions.

Key Difference: Realtor vs Real Estate Agent

Understanding Market Trends

Realtors, as members of the National Association of Realtors, have access to exclusive market data and trend analysis tools that can provide a deep dive into the real estate market. They are trained to interpret complex market indicators which might include shifts in supply and demand, median sales prices, and average days on market. This information enables Realtors to guide their clients through the ebb and flow of the market with precision.

Real estate agents, while they might not have the same level of access as Realtors, still maintain a pulse on local market trends through continual research and experience. Agents utilize multiple listing service (MLS) data, regional sales reports, and other tools to stay current, thus ensuring their ability to provide clients with relevant and timely market insights.

Assessing Property Values and Pricing

Accurate assessment of property values and pricing is fundamental in real estate. Realtors and agents use comparative market analyses (CMAs) to establish appropriate listing prices for properties and to advise buyers on offer prices. This process involves examining similar properties—considering factors like location, size, features, and condition—that have recently sold in the area.

The appraisal process, often utilized in conjunction with CMAs, provides an independent and objective valuation of a property’s worth. Although not conducted by Realtors or agents, the insights from appraisals can heavily influence the sales price and negotiations. Realtors and agents must understand how to interpret appraisal reports to align the listing or offer price closely with the current market value.

5. Representation and Transactions

2 real estate professionals shaking hands

When engaging in real estate transactions, representation signifies the legal and professional relationship between agents and their clients. This could involve various activities including listing homes, working with potential buyers, negotiating offers, and organizing the documentation required for closing.

Key Difference: Realtor vs Real Estate Agent

Working with Sellers and Buyers

Sellers often enlist a Realtor or a real estate agent to list their property. This relationship involves the professional accurately pricing the home, executing a marketing strategy, and presenting the property to prospective buyers. Conversely, agents assist buyers in identifying suitable properties, coordinating viewings, and navigating the complexities of buying a home.

Handling Offers and Negotiations

When a buyer is interested in a property, they make an offer through their agent. The seller’s agent will then present this offer, and if necessary, both parties engage in negotiating. This critical phase hinges on the agent’s ability to communicate the needs and interests of both parties, moving the transaction towards a mutual agreement.

Closing Process and Documentation

After successfully negotiating the terms, the closing process begins. The agents ensure all necessary documents are prepared, signed, and filed. This includes purchase agreements, disclosures, and transfer documents. Here, attention to detail is crucial, as is a thorough understanding of local regulations, to facilitate a smooth transfer of ownership.

6. Compensation and Commissions

A realtor receives a large commission check while a real estate agent gets a smaller compensation package. The realtor is smiling and holding the check, while the agent looks disappointed

Compensation in real estate is primarily commission-based, varying widely depending on sales and price ranges. Realtor vs real estate agent is crucial as they can have diverse income structures and commission splits.

Key Difference: Realtor vs Real Estate Agent

Understanding Real Estate Commissions

Real estate commissions are typically a percentage of the home’s sale price. Standard commission rates are around 6%, shared between the listing and buyer’s agents. For instance, a $300,000 home at 6% would generate $18,000 in commission, often evenly split as follows: 1.5% to the listing agent, 1.5% to the listing broker, 1.5% to the buyer’s real estate agent, and 1.5% to the buyer’s broker. These percentages may fluctuate based on the agreement between the agent and their client.

Salary Expectations for Agents and Realtors

While agents’ earnings are predominantly from commissions, the median gross income for Realtors was $54,300 in 2021, reflecting an increase from the previous year. Sales agents often reported a median income of $38,300, with broker owners and managers earning higher due to additional responsibilities and their income structure. It’s important to note that these figures can vary significantly due to factors such as market conditions, geographic location, and the agent’s experience level.

7. Marketing and Client Relations

A realtor confidently presents a sleek marketing plan to a satisfied client, while a real estate agent engages in friendly conversation with potential buyers

In the competitive real estate landscape, the distinction in marketing strategies and client relations approach differentiates Realtor vs real estate agent. They both aim to serve the client’s best interest but leverage their affiliations and resources in varying manners.

Key Difference: Realtor vs Real Estate Agent

Effective Property Marketing

Realtors have the advantage of access to the Multiple Listing Service (MLS), which significantly expands the market reach of their property listings, connecting with millions of potential buyers. This ensures that properties get extensive exposure, thereby increasing the chances of a sale. On the other hand, real estate agents conduct property marketing by utilizing a mix of digital platforms, print media advertising, and personal networking.

Making the most of word of mouth is crucial for both Realtors and real estate agents. They both encourage clients to share positive experiences, which helps in building a reputation for reliability and trustworthiness. Client testimonials and reviews also play a pivotal role, as they serve as social proof that can influence potential clients’ decisions.

Building Client Relationships

For a Realtor, adherence to the National Association of Realtors’ (NAR) strict code of ethics is paramount, which emphasizes the client’s best interests above all. Engagement in continuous professional development through NAR also equips them with the latest skills to foster stronger client relationships.

Real estate agents focus on building rapport through personalized interactions and demonstrating commitment to meeting clients’ needs. By actively listening to their clients and effectively communicating, they aim to establish long-term relationships that go beyond a single transaction.

In both roles, the emphasis is on being attentive and responsive to clients to build trust and ensure a successful partnership.

8. Additional Resources and Tools

A realtor and a real estate agent standing on opposite sides of a scale, with additional resources and tools stacked on one side, symbolizing the expertise and support they bring to their clients

Education and Continuous Learning

Agents and Realtors® must complete real estate education courses to obtain their license, but learning doesn’t stop there. Continuing education is pivotal in keeping up with legal updates, market trends, and best practices. Organizations such as the National Association of Realtors® often offer extensive resources for ongoing learning. This ensures that members can maintain their edge in a fast-evolving industry.

  • Training: Both newly licensed and seasoned professionals take part in regular training sessions, including online webinars, in-person seminars, and workshops.
  • Continuing Education: States typically have requirements for licensed real estate professionals to complete certain hours of continuing education to renew their licenses.

Industry Tools: Multiple Listing Service and More

Access to the Multiple Listing Service (MLS) is among the most crucial tools for real estate agents and Realtors®. The MLS is a comprehensive database of property listings that offers a wide range of information invaluable in the buying and selling process. Realtor.com, a popular real estate website, pulls data from the MLS, providing a user-friendly interface for both real estate professionals and the general public.

  • Multiple Listing Service (MLS): This tool is an extensive, organized database for shared property listings, critical for market analysis and transaction efficiency.
  • Realtor.com and Other Platforms: Online platforms such as Realtor.com are integral for increasing the visibility of property listings and connecting buyers and sellers.

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