The Differences Between a Real Estate Agent and a Broker vs the term Realtor

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The terms are used interchangeably, but they aren't the same



By Troy SEGAL Updated December 14 2021Reviewed ERIKA RASUREFact checked by the ARIEL COURAGE





Looking to purchase or sell a property? It's likely that you'll work with a real estate agent, broker, or Realtor. real estate broker Though all of these real estate pros are licensed to assist you purchase, sell, or rent a home, they differ from each other, specifically with regards to their qualifications and what rung of the ladder that they are on.



Here's what you must know.



KEY TAKEAWAYS



Real estate agents possess professional licenses to assist individuals buy, sell as well as rent residential real estate. They be employed by the sponsoring broker or brokerage firm.



Brokers, real estate brokers who are licensed and have completed additional education and licensing requirements. They can be independent as well as hire other real estate agents to work for them.



A Realtor is a licensed real estate broker or agent (or any other real estate professional) who is an active member of the National Association of Realtors (NAR). Members must comply with NAR's strict Code of Ethics.





Real Estate Agents



Realtors are individuals who are licensed to assist individuals in purchasing or sell real estate. They are the ones responsible for bringing buyers and sellers together and are compensated a commission of typically a percentage of the property's value at the time of sale. Real estate agents can also be known as real estate associates as well as real estate salespersons.



The conditions to becoming a licensed real estate agent vary by state (there's no national license). In general, however, real estate agents must:



Must be at least 18 old



A legal resident of the U.S.



Completion of their state's pre-licensing class



Learn and pass the real estate license of the state exam



Check your background



Be sponsored by a licensed real estate broker



Participate in the continuing education classes required to maintain the license



What is a real estate agent do?



Agents in real estate manage transactions between sellers and buyers in addition to the renters and owners. Agents are responsible for the carrying out of offers and counteroffers between each party, along with any queries they may have. An agent will work with another agent when an acceptance of an offer is made, helping clients throughout the procedure of filling out paperwork. They will also ensure that their clients are aware of all requirements required to complete the sale, for example, house inspections, moving, and important dates like the closing.



Agents who represent sellers are called listings agents. These agents help set the price of listing, suggest home updates that will boost the value of the property (and the likelihood of the sale being successful) as well as assist with staging the home and help market the property through the neighborhood Multiple Listing Service (MLS) as well as other channels. They also negotiate selling prices, closing costs, and other charges, and assist create, submit, and file documents.



Agents who represent buyers are known as buyer's agents. These agents find properties that meet buyer's expectations (aka the "wish list") and price range. They can also help with appraisals for homes and home inspections. Similar to listing agents, buyer's agents negotiate terms and assist in the preparation, submission, and file the required documents.



Agents can act as both buyers' and listing agents (known by the term dual agency) but not always for the same transaction as they could create conflicts of interests.



How do real estate agents be paid?



Real estate agents work for agents or brokers and are usually paid by commission. This means that they are paid part of the selling cost of a home. So that the higher the sales price, the more commission.



Commissions are sometimes negotiable and can range somewhere between 5% and 6% of the price of the property. 1 Of course, the real estate agent can't walk away with the entire commission. Instead, the commission is typically divvied up between the agent representing the buyer or the listing agent as well as the companies in which agents are employed. In this case when a home is sold for $200,000 , with a six% commission. A typical split would look like:



Listing agent: 1.5% ($3,000)



Buyer's agent: 1.5% ($3,000)



Broker of the listing agent 1.5% ($3,000)



Buyer's agent's broker: 1.5% ($3,000)



Real Estate Brokers



Real estate brokers are a real estate agent that continues their education and successfully receives the state-issued licence for a real estate broker. In contrast to real estate agents, brokers can be independent and create their own brokerage , and also hire additional real estate professionals.



What are real estate brokers do?







what is a real estate broker Real estate brokers do much of the same thing as agents do. Brokers that work with buyers typically look for properties that match the criteria specified by their customers, conduct negotiations make offers, and aid buyers with any other questions before their date of closing date. Seller's brokers, on other hand, decide the market value of their clients' properties showcase properties, inform sellers regarding offers, and assist with the process of making an offer.



There are three primary tiers of brokers in real estate, that have different levels of responsibility:



Associates brokershave broker licenses but choose to work for a different broker. real estate broker In general, associate brokers do not supervise other agents.



The brokers who manage the businessoversee the daily activities and transactions within the office. They also recruit agents, teach new hires as well as manage the administrative staff.



Principal brokers or designated brokers supervise real estate agents to ensure sure that they're in compliance with state and national real estate laws. Each office of real estate has a designated broker.



How do real estate professionals get paid?



Real estate brokers earn money by taking a portion of the commissions earned by those real estate professionals who work under them. They also receive commissions from their own deals. However, in contrast to agents they do not have to share profits with "the office."



Realtors



Realtors are Realtor is an expert in real estate who is a member of the National Association of Realtors (NAR) which is the biggest trade association across the U.S. However, the term "Realtor" is commonly confused with "real estate agent," the term is available to various jobs within the real estate sector, such as:



Commercial and residential real estate agents



Salespeople



Property managers



Appraisers



How do I become a realtor?



Anyone who wants to become a Realtor must meet four criteria:



You must have a valid and active real estate license



Actively participate in the real estate industry



Have no list of sanctioning actions taken by the government in the event of nonprofessional conduct



Have not filed for any recently or pending bankruptcy







The next step is to sign up with one or more of the National Association of Realtors' local real estate associations, pay a one-time application fee, and then pay the annual dues in order to keep your Realtor status. All Realtors must adhere to the National Association of Realtors' strict Code of Ethics. 2





As a signatory to the NAR's Code of Ethics, Realtors promise to be transparent as well as honest and to safeguard the best interests of their clients in every transaction.







In August 2021, NAR recorded nearly 1.5 million members across America with 65% of them were licensed sales representatives. A further 22% were brokers, and 15% held associate licenses for brokers. 3 4 Any member of NAR is authorized to utilize the Realtor trademark as part of their name. It can, however, be used as a signification of the professional's license status.



Is it Better to Use a Real Estate Broker or Real Estate Agent?



In most cases, the distinction will not be a major factor for the buyer or seller of a home. An independent broker, however they may have access many more properties that are listed with different agencies. A broker may additionally be able provide an additional allowance in their fees due to the fact that they do not have to split a portion of their profits with an agency.



What Is the Difference Between a Buyer's Agent and a Seller's Agent?



In simple terms, a buyer's agent aids a potential homeowner in their home search. A buyer's agent is likely to be able to access to homes offered by other agents in addition to their own. Seller's agents (also called an agent for listing) is the person who lists and sells the property that is to sell. The seller's agent represents the homeowner. They may also arrange the property for staging, host open houses, or feature the home on the internet. When a home gets sold earned by the seller will usually be divided equally between the buyer's and seller's agents (with their cut possibly being split by their agency).



Can You Use a Real Estate Broker to Rent a Property?



Yes. In addition to buying and selling realtors and brokers assist in listing rental properties and find eligible tenants. If a property is rented normally, the tenant must pay their broker a fee (typically around one or two months rent) and split the cost with the agent who is listing the property.



Can You Sell a Home by Yourself?



For sellers who are looking to reduce commissions, there's a way to offer a house for sale by owner (FSBO). It could be simple yard signs that reads "for sale" to discount listing services that publish the listing of the property along with basic pictures to the Multiple Listing Service (MLS) at a cost of a flat rate. Of course, there won't not be any professional staging or marketing that will promote and drive visitors to the home apart from the web-based listing. Also, you might still be required to pay the commission to the buyer's agent after the property is sold.