What's the Difference Between a Real Estate Agent, Broker and Realtor?
If you're in the market to buy a house or you're interested in selling, chances are you have come across the terms real estate agent, broker and realtor and wondered what exactly the difference is. Well here's a rundown:
A real estate broker is different from a real estate agent in several ways. A real estate broker typically represents sellers only and the broker employs sales agents to assist in the selling process. Real estate brokers also have more training than real estate agents. A real estate broker must first become a licensed real estate agent, which requires 30-90 hours of classroom instruction and a state real estate exam. To become a broker, the new agent must take an additional 90-hour course and pass an exam on real estate law. While real estate brokers typically represent sellers, there are instances where they will represent a buyer. In these cases, a special written agreement is required.
The term "real estate agent" is a generic term for anyone who is licensed to assist in the selling of a piece of property. Unlike a broker, who typically represents the seller, a real estate agent may represent the buyer or the seller, or both simultaneously. Depending on the state, a real estate agent may be required to take anywhere from 30-90 hours of classroom instruction, followed by that state's real estate exam. If an agent would like to become licensed in several states and they have already completed 30-90 hours of classroom instruction, the real estate agent may only be required to take the real estate exam for each state he or she wants to do business in. In these cases, a study guide (as opposed to a 30-90 hour class) will suffice.
Finally, "realtor" is often used as a generic term to mean real estate agent. However, "realtor" is the term that should be used to describe a real estate agent that belongs to The National Association of Realtors (NAR). In order to become a member of The National Association of Realtors, an agent must have a current real estate license and apply through their local board. Once accepted, they'll have to pay a membership fee as well. The NAR requires its members to take additional real estate classes every four years and abide by a strict code of ethics. Many realtors become NAR members to demonstrate to clients that they are knowledgeable about the latest real estate trends because of these class requirements and that they have high ethical standards in their business dealings.