In the world of property buying and selling, you’ll often hear two terms used interchangeably: Realtor and real estate agent. While they may seem similar, there are important distinctions between these two roles. This guide will help you understand the differences, their responsibilities, and how to choose the right professional for your real estate needs.
What Is a Real Estate Agent?
A real estate agent is a licensed professional who helps people buy, sell, or rent properties. To become a real estate agent, an individual must:
- Complete state-required education courses
- Pass a licensing exam
- Obtain a license from their state’s real estate commission
Real estate agents can work with various types of properties, including residential homes, commercial buildings, and rental units. Their primary goal is to facilitate property transactions and guide clients through the buying or selling process.
Key Responsibilities of Real Estate Agents
- Listing properties for sale
- Marketing properties to potential buyers
- Conducting property showings
- Helping buyers find suitable properties
- Negotiating prices and terms
- Assisting with paperwork and contracts
- Coordinating property inspections and appraisals
What Is a Realtor?
A Realtor is a real estate professional who is a member of the National Association of Realtors (NAR). To become a Realtor, an individual must:
- Already be a licensed real estate agent or broker
- Join the NAR and pay annual dues
- Agree to abide by the NAR’s Code of Ethics and Standards of Practice
The term “Realtor” is a registered trademark, and only NAR members can use this title.
The NAR Code of Ethics
The NAR Code of Ethics is a set of professional guidelines that all Realtors must follow. It covers three main areas:
- Duties to clients and customers
- Duties to the public
- Duties to other Realtors
This code ensures that Realtors maintain high standards of integrity, professionalism, and fair dealing in their real estate practices.
Key Differences Between Realtors and Real Estate Agents
While all Realtors are real estate agents, not all real estate agents are Realtors. Here are the main differences:
- NAR Membership: Realtors are members of the NAR, while real estate agents may not be.
- Ethical Standards: Realtors must adhere to the NAR Code of Ethics, which goes beyond state licensing requirements.
- Additional Resources: Realtors have access to NAR’s educational resources, market data, and networking opportunities.
- Use of the Realtor® Trademark: Only NAR members can use the Realtor® title and logo.
How Real Estate Professionals Get Paid
Both Realtors and real estate agents typically earn money through commissions. Here’s how it usually works:
- Commission rates are negotiable but often range from 5% to 6% of the property’s sale price.
- This commission is usually split between the buyer’s agent and the seller’s agent.
- Agents then share a portion of their commission with their brokerage firm.
For example, on a $300,000 home sale with a 6% commission:
- Total commission: $18,000
- Each agent might receive: $9,000 (before splitting with their brokerage)
Recent Changes in the Real Estate Industry
The real estate industry has faced significant challenges and changes in recent years:
1. NAR Leadership Changes
In 2023, the NAR president resigned amid controversy, leading to a shift in the organization’s leadership.
2. Legal Challenges
NAR has faced lawsuits alleging antitrust violations, particularly regarding how buyer’s agents are compensated.
3. New Rules for 2024
Starting August 2024, new rules will affect how real estate professionals operate:
- Buyer’s agent compensation will no longer be listed on the Multiple Listing Service (MLS).
- Buyer’s agents must have written agreements with their clients.
- These changes aim to increase transparency and competition in the industry.
Choosing Between a Realtor and a Real Estate Agent
When deciding whether to work with a Realtor or a real estate agent, consider the following factors:
1. Experience and Expertise
- Look for professionals with a strong track record in your local market.
- Ask about their experience with properties similar to what you’re buying or selling.
2. Reputation and Reviews
- Check online reviews and ask for references from past clients.
- Look for professionals with positive feedback about their communication and negotiation skills.
3. Professional Networks
- Realtors may have access to a broader network through NAR, which could be beneficial for your transaction.
4. Ethical Standards
- If adherence to a strict ethical code is important to you, a Realtor might be the better choice.
5. Personal Connection
- Choose someone you feel comfortable working with, as you’ll be spending a lot of time together during the process.
Tips for Working with Real Estate Professionals
Whether you choose a Realtor or a real estate agent, here are some tips to ensure a smooth working relationship:
- Communicate Clearly: Be upfront about your needs, budget, and expectations.
- Ask Questions: Don’t hesitate to seek clarification on any part of the process you don’t understand.
- Be Responsive: Timely responses to your agent’s inquiries can help speed up the buying or selling process.
- Respect Their Time: Be punctual for appointments and showings.
- Provide Feedback: Let your agent know what you like or dislike about properties you view.
The Future of Real Estate Professionals
As the industry evolves, both Realtors and real estate agents are adapting to new technologies and changing consumer expectations. Some trends to watch include:
- Virtual Tours and Online Listings: Increased use of technology to showcase properties.
- Data-Driven Decisions: More reliance on market data and analytics to price and market properties.
- Transparency in Fees: Greater clarity about how agents are compensated.
- Specialization: Agents focusing on niche markets or specific types of properties.
Conclusion
While the terms “Realtor” and “real estate agent” are often used interchangeably, understanding the differences can help you make an informed decision when buying or selling property. Both Realtors and real estate agents can provide valuable assistance in navigating the complex world of real estate transactions.
Remember, the most important factor is finding a professional who is knowledgeable, trustworthy, and aligned with your specific needs. Whether you choose a Realtor or a real estate agent, take the time to research and interview potential candidates to ensure you find the right fit for your real estate journey.
By staying informed about the roles of these professionals and the changes in the industry, you’ll be better equipped to make smart decisions in your real estate transactions. Whether you’re a first-time homebuyer, a seasoned investor, or looking to sell your property, the right real estate professional can make a significant difference in your experience and outcomes.