The process of choosing a real estate agent should be a careful one. You want to work with a professional who will not only act in your best interest, but will effectively guide you every step of the way so you feel confident about your home sale or purchase.
What's the Difference Between a Real Estate Agent, Realtor and Broker?
But when you’re browsing for potential agents, how do you decipher the difference between a licensed agent, a Realtor and a broker? Does one guarantee you an unmatched level of service, and should you take the title into account when deciding who to work with?
If you have trouble understanding the difference between an agent, Realtor or broker, don’t worry – you’re not alone.
“Everybody calls us all brokers,” says Allen Brewington, who recently received his licensed associate broker designation, with TripleMint, a full-service real estate firm in New York City.
To help you tell them apart, we’ve broken down the types of licensed real estate professionals based on their role and experience, as well as factors to consider as you vet potential representatives.
Real estate agent, sales associate or salesperson. Every person who is licensed to represent buyers and sellers in a real estate transaction is a real estate agent – or licensed real estate sales associate salesperson, as it’s more commonly known in some parts of the U.S.
The license is required to legally work on behalf of buyers and sellers in real estate transactions and is issued by the state, with variations on a minimum number of instructional hours and a test to receive certification.
Most states additionally require a background check and business insurance to represent consumers when buying or selling real estate, as Kentucky does, according to Shelly Saffron, administrative coordinator for the Commonwealth of Kentucky Board of Real Estate Professionals.
Broker or broker associate. Real estate agents can choose to pursue a higher level of licensing after working in the industry professionally. In Kentucky, a minimum of two years and at least 20 hours a week is required to become a broker, plus “they have to have that verified by their principal broker,” Saffron says. Each state has a broker exam specific to local real estate practices, but will typically require a similar or greater amount of experience.
“The biggest component is the experience,” Brewington says, noting that the title automatically separates him from others who have just entered the industry.
Depending on the state, there may be additional requirements to become a broker versus broker associate, or a principal broker, who is at the head of a real estate firm, and fellow real estate agents work for him or her.
Realtor. Any agent or broker that’s a member of the National Association of Realtors can be identified as a Realtor – and that accounts for a lot of professionals, as the NAR is the largest trade association in the U.S., with more than 1.2 million members.
Article 1 of the NAR's Code of Ethics and Standards of Practice begins: “When representing a buyer, seller, landlord, tenant, or other client as an agent, Realtors pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve Realtors of their obligation to treat all parties honestly.”
The NAR’s code addresses a Realtor’s duties to clients and customers, the public and fellow Realtors, and some expectations include the accurate portrayal of market value to a client and refraining from lying about fellow real estate professionals. Violation of the code or standards could lead to the individual’s removal from the association.
This code of ethics holds its members to a higher standard. In most cases, a real estate agent can only lose his or her license to deal in real estate when convicted of a crime that prompts action from the state. Saffron says the Kentucky Board of Real Estate Professionals occasionally receives complaints about a professional based on ethical grounds rather than legal ones.
“We tell people that when they have an ethical type of complaint, they need to take that to their local board [of Realtors],” Saffron says.
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How to Decide?
Having a few years experience or adherence to a specific code may make you feel more comfortable hiring one person over another, but as with any industry, there are subpar professionals at every level of real estate brokerage. It’s important to carefully vet candidates with questions specific to your needs as a homebuyer or seller.
Having recently received his broker designation, Brewington says one benefit of having a title other than “salesperson” is that it helps to distinguish him as a seasoned professional, particularly when interacting with other professionals in New York.
“When I give them my business card, it sets me apart from other people who might be newer to the industry,” he says.
The NAR and other real estate organizations offer additional training for real estate agents to specialize in particular types of deals or clients. For example, Realtors can receive the Military Relocation Professional or Certified Buyer Representative designations after taking courses relevant to a specific industry niche.
The National Association of Senior Move Managers is a separate organization that licensed agents at any level may choose to train in. Members who are agents may apply their real estate license and expertise to work exclusively with seniors who need to move or to simply offer specialized skills to a part of their clientele.
Whatever your particular situation may entail – whether you’re a first-time homebuyer who wants additional guidance or you’re looking to buy a vacation home – you can typically find a certification that applies to help you feel more confident when you begin your search for a real estate agent.