- Understanding Key Real Estate Professional Titles
- Key Takeaways
- Realtor's Code of Ethics
- How These Titles Can Affect Your Home Buying or Selling Experience
- Can I Save Money on Commissions By Working with a Broker?
- Can I Sell My Home Without a Realtor, Agent, or Broker?
- The Bottom Line
- How FastExpert Can Help
Real Estate Agent vs Realtor vs Broker: Does it Matter?
There is a lot of confusion about the terms “real estate agent,” “broker,” “salesperson,” and “Realtor.” Many people assume that they are one and the same, but this is not the case. There are important distinctions between the two titles, and it’s important to understand them before you hire someone to help you buy or sell a home.
In this article, we’ll break down the differences between these titles, how each can affect your home-buying or selling experience, and how to choose the right professional for your needs.
Understanding Key Real Estate Professional Titles
As we mentioned above, you may hear the terms “real estate agent,” “broker,” “realtor,” and “salesperson” used interchangeably, but there are important distinctions between these titles. Here’s a look at the key differences:
What is a Real Estate Agent?
A real estate agent is a licensed professional who helps people buy and sell real property. In order to become a real estate agent, you must complete a certain amount of training and pass a state-issued exam. Real estate agents are typically associated with a brokerage, and there are three main types:
- Buyer’s Agent – A buyer’s agent represents the interests of the home buyer. The duties of a buyer’s agent include such things as helping to find appropriate properties, negotiating the purchase price, and writing up the purchase contract.
- Seller’s Agent – A seller’s agent represents the interests of the home seller. The duties of a seller’s agent include such things as marketing the property, negotiating the sale price, and writing up the sales contract.
- Dual Agent – A dual agent represents both the buyer and the seller in a real estate transaction. In most cases, state law requires that the brokerage disclose this relationship to both parties before entering into a representation agreement. Additionally, dual agents are not allowed in some states.
What is a Real Estate Broker?
A real estateis a step up from a real estate agent. In order to become a broker, you must complete additional training and pass a more difficult state-issued exam. Real estate brokers can work independently or they can choose to be associated with a brokerage.
There are three main types of real estate brokers:
- Principal/Designated Broker – The principal broker or designated broker is the head of a brokerage. This person is responsible for managing the firm and ensuring that all agents are licensed and adhere to state regulations.
- Associate Broker – An associate broker is a real estate broker who works under a designated broker. They handle legal matters that pertain to agents but do not oversee real estate agents or realtors.
- Managing Broker – A managing broker is similar to an associate broker, but focuses more on managing the day-to-day operations of the brokerage.
What is a Realtor?
The term “Realtor” is actually a registered trademark of the National Association of Realtors (NAR). Realtors are often real estate agents or brokers, but not all agents and brokers are realtors. In order to become a realtor, you must be a member of the NAR and adhere to their strict code of ethics. Additionally, the title Realtor can also pertain to non-real estate agents, including:
Realtors have access to more than 1,400 local associations and 54 state and territorial associations, meaning they have a wide network of resources and support at their disposal.
What is a Real Estate Salesperson?
A real estate salesperson is a real estate agent or broker who is actively working with clients to buy and sell properties. So, in essence, the term “salesperson” is a catch-all for all three of the above titles.
Now that we’ve looked at the key differences between these titles, let’s break down the key takeaways:
- Realtors can be real estate agents, brokers, property managers, etc., but not all real estate agents are Realtors.
- All of them are licensed professionals who help people buy and sell real property.
- In order to become a real estate agent, you must complete a certain amount of training and pass a state-issued exam. In order to become a broker, you must complete additional training and pass a more difficult state-issued exam. Finally, Realtors must go beyond these basic requirements as set forth by the National Association of Realtors.
- Real estate agents and brokers may have had prior disciplinary actions against them. Realtors must not have any record of misconduct, else they risk losing their membership. They also cannot have declared
Realtor’s Code of Ethics
As mentioned above, the NAR has a strict Code of Ethics that are more stringent than state guidelines. The Code of Ethics is reviewed and updated annually by a Professional Standards Committee.
There are 17 Articles in total, each with its own standards of practice. Articles 1 through 9 outline a Realtor’s duty to their clients and customers. Articles 10 through 14 outline their duty to the public. And, Articles 15 through 17 outline their duty to other Realtors.
Duties to Clients and Customers
1. Realtors hold a responsibility to their clients that is both primary and non-negotiable. They must protect the interests of those they represent, but this does not relieve them from being honest with all parties involved in every situation no matter how small or large it may seem at first glance.
2. Realtors shall avoid exaggeration, misrepresentation, and concealment of facts related to the property or the transaction. This would also include disclosing any known material facts that could affect the value or desirability of the property. However, they are not obligated to discover defects in the property, advise on issues outside the scope of their license, or disclose facts that are confidential.
3. Realtors should cooperate with other brokers to the best of their ability, but only if it is in their client’s best interest.
4. Realtors must expressly disclose their position if they have a personal interest in an offer or transaction. This includes helping family, firms, co-workers, and affiliates, with transactions. If they are buying or selling a home for themselves, they must inform the owner of their position as a Realtor.
5. Realtors must specifically disclose any present or contemplated interest in a property prior to undertaking professional services thereof.
6. Realtors must notify and obtain consent from their clients before taking their commissions, rebates, or profit on expenditures made for their clients. Additionally, they must disclose who benefits from recommendations on products.
7. Realtors must disclose compensation from anyone else besides their clients. This is the case even if it is legal. Their client must have informed consent about how a Realtor is compensated in the transaction.
8. Realtors must keep all client funds in a separate account that does not comingle their own personal funds.
9. Realtors are responsible for making sure their clients thoroughly understand all parts of an agreement and that all parties receive copies of the agreement.
Duties to the Public
10. Realtors cannot discriminate based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.
11. Realtors must abide by standards of practice in their discipline and cannot advise on areas they are not qualified or licensed to give advice on.
12. Realtors must be honest and truthful in their advertising and marketing of properties and services.
13. Realtors cannot practice or advise on matters of law without actually having the legal right to do so. Instead, they must advise clients to seek an attorney qualified to advise on legal matters.
14. Realtors shall hand over all evidence pertaining to an investigation into their conduct or allegations of misconduct and abide by any decision made.
Duties to Other Realtors
15. Realtors cannot lay false claims, accusations, or make misleading statements against other Realtors.
16. Realtors cannot interfere with the contracts of other Realtors. This includes persuading or poaching clients from other Realtors. Additionally, they should not solicit listings that are already under contract with another broker.
17. Realtors should handle any disputes with other Realtors through, rather than litigation.
How These Titles Can Affect Your Home Buying or Selling Experience
Now that you understand the key differences between these titles, you may be wondering how they can affect your home buying or selling experience. Here’s a look at a few key ways:
Agents who carry the Realtor title have taken a pledge to uphold higher standards of business ethics than those who don’t. This could come into play when negotiating on your behalf, as you can be confident that your agent is adhering to a strict code of conduct.
Additionally, real estate agents are typically more experienced in negotiation than brokers. Because they’ve closed more deals, they’re likely to have a better understanding of the market and what strategies work best in different situations.
Access to MLS
The Multiple Listing Service (MLS) is a database that real estate agents use to list properties for sale. In order to list a property on the MLS, an agent or broker must be a member of the service.
If you’re selling your home yourself, there are some agents and brokers who offer flat-fee MLS listings. This means that, for a set price, they will list your home on the MLS without providing any other services.
While this may save you money upfront, it’s important to understand that you’ll still be responsible for all aspects of the sale, from showings and open houses to negotiating with buyers.
Access to Professional Networks
Realtors have access to professional networks that non-members don’t. For example, the National Association of Realtors offers its members a number of resources, including educational opportunities, and discounts on products and services.
These networks can be beneficial if you’re looking for an agent with certain credentials or who specializes in a particular type of property.
Can I Save Money on Commissions By Working with a Broker?
Yes, you may be able to save on commissions by not using a real estate agent or Realtor. In some ways, you would be eliminating the middle man. Typically, real estate professional commissions cost about 6% of the total sales price. Commissions might be broken down as follows:
- Buyer’s Agent – 1.5%
- Buyer’s Agent’s Broker – 1.5%
- Seller’s Agent – 1.5%
- Seller’s Agent’s Broker – 1.5%
So, by working directly with a broker, you could eliminate the buyer’s agent and seller’s agent commissions, for a total savings of 3%.
It’s important to note that not all brokers will charge lower commissions. In some cases, they may even charge more. Additionally, while you may be able to save on commissions, you’ll still be responsible for other fees associated with selling your home, such as the escrow fee.
However, the potential savings on commissions might also come with some tradeoffs in the quality and speed with which your home is sold.
For example, if you’re not using a real estate agent to market your home, it will be up to you to take care of all the details of the sale, from start to finish. This includes tasks such as taking photos, writing descriptions, negotiating with buyers, and handling all the paperwork.
Additionally, without the help of a real estate agent, you might have a more difficult time getting your home listed on the MLS.
If you do decide to work with a broker, be sure to ask about their commission structure and the services they provide upfront. This will help you determine if working with a broker is the right decision for you.
Can I Sell My Home Without a Realtor, Agent, or Broker?
Selling your own property without the assistance of a professional is often referred to as a “For Sale By Owner (FSBO).” While you’re not required to use a real estate professional when buying or selling a home, working with one can be beneficial. Even if you’re familiar with the real estate market and the process of buying or selling a home, an experienced professional can provide valuable insights and resources.
If you’re considering selling your home without the help of a real estate professional, be sure to do your research and understand the process before taking on the task.
The Bottom Line
When considering whether or not to use a real estate professional, be sure to compare the costs and services of different agents, Realtors, and brokers in your area. This will help you determine if the potential savings on commissions is worth the tradeoffs.
How FastExpert Can Help
With FastExpert, you can easily compare the services and costs of different real estate professionals in your area. We’ll provide you with a list of top-rated agents, Realtors, and brokers who meet your specific needs.
You can browse the profiles of local real estate professionals and read customer reviews to find the right fit for you.
Additionally, we offer a number of resources to help you through the process of buying or selling a home. These resources include articles, guides, and tools.
If you’re ready to get started, simply search for agents by zip code to find the perfect real estate professional for you.