Real Estate Agent Vs. Realtor: What is The Difference?

Real estate agent and customers shaking hands together celebrating finished contract after about home insurance and investment loan, handshake and successful deal.

It’s common that we all get confused between a real estate agent and a realtor. This could be so especially if you are not familiar with the real estate industry and its terms. That’s because these two terms are often used interchangeably, even though there is a wide gap between them.

We have geared this article towards the in-depth differentiation of real estate agent, realtor, and also broker. After reading this article carefully, you will be able to decide on who will perfectly fit your needs among them.

Before you can understand who these people are, you must first know what real estate is all about.


What is Real Estate?

Real estate is one of the most significant industries in the world. This is because it deals with properties such as land, buildings, and all other benefits of the land. Real estate has three categories; the residential, the commercial, and the industrial category.

Residential real estate is about undeveloped land, housing, townhouses, and condominiums. For instance, when you have a home for sale, it falls under this category.

  • Commercial real estate deals with non-residential warehouses, office buildings, and retail buildings.
  • Industry real estate, on the other hand, is about mines, business parks, farms, and factories.

You can also invest directly in real estate by buying property or land. Likewise, you can invest indirectly by buying shares from real estate investment trusts or mortgage-backed securities.

Now let’s get to know about the people working in the real estate industry.


Who is a Real Estate Agent?

A real estate agent is the person that assists people in purchasing and selling residential and commercial property.

In order to validate if your real estate agent is legit, you must check if they have a state license to do conduct any business. Whether it’s buying, selling, and renting any kind of property. Getting the license is not an easy task. They must first complete a series of courses, in which the courses can vary in content and duration of education, depending on state or country.

This is to say that the real estate agent is a professional that helps people to acquire or sell their properties, either residential, industrial, or commercial. Meanwhile, the real estate agent is also qualified to work as a buyers’ agent or listing and rental agent.

A listing agent will only work with a seller to list your home. But buyers’ agents will help you search for properties if you want to become a homeowner. While rental agents will help you find rental units at your preferred location, that is if you are looking for a house to rent.


Realtor and his client signing up contract
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What is a Realtor?

A realtor is any real estate agent that belongs to an association called The National Association of Realtors (NAR). Such an agent must be identified as an active real estate agent.

Since the year 1908, NAR has become the most prominent trade association, precisely in the USA. This association is a community of active real estate agents that has been granted a license to become a professional real estate agent.

When the real estate agent posessesses a license, it means that they too have a good reputation. He or she with this qualification are more professional and reliable than the one who doesn’t have any genuine license.  Their good reputation and license are what will make you, as a client, trust the agent to commit your property into their hands. NAR is an association that protects the interest of each member.


Realtor Code of Ethics

All professional realtors or licensed-realtors who are a member of NAR must strictly adhere to the realtor code of ethics. This code of ethics covers the duties of realtors to their customers or clients and towards other professional realtors.

NAR refers to these codes of ethics as 17 articles that are full of various areas of professional guidelines of practice that must be obeyed.

From article number 1 to 9, the code of ethics is about the duties of the professional realtor towards their clients. From article number 10 to 14, you will see the responsibility of the licensed realtors towards the public. Finally, article numbers 15 to 17 will tell you about the duties of professional realtors towards other licensed realtors.

In conclusion, the licensed realtors are subjected to these ethics, and they are expected to perform their duties with expertise.

Here are the 17 articles that form the code of ethics;

  • They should have their client’s interests in mind above their interest and be as honest as they can to all parties involved.
  • No facts should be withheld from any party to avoid misrepresenting or exaggeration of information. Likewise, realtors should not go beyond the limit of their license.
  • They should work with other brokers in the interest of the client.
  • The realtor needs to open up to the client if they are working with any member of the client’s family.
  • They must not provide any professional service on a property they are interested in unless if they have informed the client about it.
  • A responsible realtor should request the consent of the client before accepting any kind of commission or payment.
  • They must let all parties involved know about any payment and ask for their consent if there will be a payment from more than one person.
  • Personal funds and clients’ funds should not be merged.
  • All agreements need to be simple, clear, and concise for all parties to understand. Also, each copy of the agreement must be given to everybody.
  • They should not discriminate against any party based on color, religion, race, gender, sexual orientation, etc.
  • They must follow all standards with competency in the real estate business.
  • All advertisements and marketing materials should bear factual information without exaggeration.
  • They must not practice law if they have not been given the authority to do so.
  • All evidence must be presented, and they must corporate in case they are charged with unfaithful practice.
  • They should not pass any misleading or false information about any other professional realtor, even if the person is not trustworthy.
  • He or she as a realtor must not involve in any other realtors’ contract. However, a mutual agreement can overtake this clause.
  • They must settle disputes among other licensed realtors by arbitration and not by litigation.

Another common term in real estate that you might also find confusing is “broker.”

Broker agent and customer holding pen, the policyholder and explain discussing for concerning mortgage loan offer for and house insurance
Photo by Adobe Stock

Who is a Broker?

A broker, or more specifically, real estate broker, is a person that has a brokerage and hires real estate agents. Generally, the broker is more trained than real estate agents. Meanwhile, brokers are also the ones that handle the most technical aspects of transactions in the real estate business. They can choose to work independently or work with other agents.

There are some agents who pass the broker exams but still work for other brokers. They are known as real estate associate brokers. This association of brokers shares the profits of brokerage, above the commission given to typical agents.

Brokers working for buyers are responsible for helping clients search for perfect properties they want, negotiate, prepare offers, and do every necessary thing appropriately before the deadline.

But if the broker is working for a seller, it is their responsibility to determine the market value of the customer’s properties, list it and show the properties. Finally, the seller’s broker will communicate with the sellers on the offer available and help them with the overall offer process.

Buyers generally believe a broker is more reliable than a real estate agent. This is mainly because a broker needs outstanding qualifications to obtain a license.


Realtor vs. Real Estate Agent

In a nutshell, the realtor belongs to the association of realtors (NAR). The association involves the agents, salespersons, realtors, brokers, appraisals, and any other professional in the real estate business. But, you cannot find a real estate agent in this association.

Now you know who a real estate agent, a realtor, and a broker is. Let us see now what the significant differences between the real estate agent and a realtor are.

The Similarities and Differences

  • A realtor is a trademark that refers to a person who is an active member of NAR. But, a real estate agent is the one that has a license to assist people in selling or purchasing a property.
  • Not all realtors are real estate agents. That is because NAR consists of property managers, brokers, home appraisals, and real estate counselors. In contrast, real estate agents are identified by their license.
  • Realtors are members of NAR while a real estate agent is not a member at all.
  • A realtor should have a code of ethics guiding them, while real estate agents have none.
  • Realtors are more professionals than a real estate agent. That’s because they are more educated and have rules guiding them.
  • Realtors capitalize on good reputation and faithfulness more than real estate agents. This is because realtors have an association that focuses on having a good reputation and being faithful to clients and other professionals.
  • People prefer to work with realtors than to consult a real estate agent for their real estate business. This is because these consumers are aware of NAR’s objectives and guidelines.
  • Realtors have an influence on legal protection than real estate agents. Through the NAR association, members can lobby the federal government or state for improvement in their legal protections.
  • Realtors can upgrade their skills and get better opportunities to be more successful in the competitive industry than for real estate agents to do so.
  • When a realtor is found guilty and charged to court by the client, he will be dismissed from the group. Meanwhile, when such happens to a real estate agent, he might only lose his license. But the truth is the realtor is more accountable than the real estate agent. All thanks to NAR.
  • Realtors have a higher rate of client satisfaction than a real estate agent.

These differences don’t mean that realtors are superior to real estate agents. Sometimes, some real agents have more experience than realtors. Also, at times, some real estate agents are more honest than realtors.


Real Estate investment a villa
Photo by Ralph Kayden on Unsplash

What to Consider When Choosing A Realtor and Real Estate Agent?

Before you consult a realtor or a real estate agent, you should do the following. if you want to have a safe real estate business deal:

Identify your need

It’s always best to know what you want before making any decisions. That’s because when you know what you want, you can narrow down a niche. Whether it’s to buy a property or you have a home for sale. Then, choose a perfect representative to get the best deal.


Check clients’ reviews

You will only truly know if you do your research. So, make sure you conduct a background check. You can simply request for the agent or realtor’s client review to check if he is genuine and honest. If he is who he claims to be, he should have the evidence for any justifications. It is also never a bad idea to run any contracts by a real estate attorney to look for anything that could be considered a red flag.

That way, you will know if you should go ahead with the contract or not. This is paramount especially if you are working on commercial or industrial real estate. That’s because this category of real estate business is vast and involves a lot of processing and payment. You’ll know the person if you check their background. Hence, a background check is essential. Especially if you want to avoid any scams or to hire someone to find out he’s not capable later on.


Get a trustable referral

This means you should talk to friends or family members or any other person you can trust. Tell the person what you want and let them refer you to a trusted agent or realtor. People seem to perform well at their duty when they get a referral from old clients.

Although this doesn’t automatically mean that the agent or realtor will offer you the best service, it will go a long way. Likewise, hearing about the agent or realtor from the old client will give you peace of mind to go ahead with him.


Have a good rapport

Once you finally decide on who is most suitable for your need, open up to the agent or realtor. Let him know your concerns, budget constraints, and location you want to work on. That includes the time frame and payment process. This will make you and the agent or realtor have a clear understanding of the business deal. Your honesty will guide the agent or realtor to offer you the best service.


The Bottomline

With the differences between real estate agents, brokers, and realtors explained, you can consult the best person to handle your task. Whether you have a home for sale, property for sale, or you want to buy property, whatever it is. These are the right people you can consult. Trust us, if you can follow the rules in this article, you will not have a lousy experience anymore. Whether it’s with a realtor, broker, or real estate agent.