Choosing The Right Professional: Realtor Vs. Real Estate Agent - What Sets Them Apart

Agent Advice
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Written by

Simona

Published date:

Updated: Feb 20, 2024 by

photo business people stretchingDuring one’s life, chances are one might have to rent, buy, or sell a property at least once. Thus, dealing with a real estate professional is unavoidable and a solution that could actually save time and money. But if you’re relatively new to the industry, you might not know the difference between a real estate agent and a Realtor. Understanding the difference between a Realtor and a real estate agent could help you choose the right professional according to your needs. 

 

I know it might get confusing, mainly because the terms Realtor and real estate agent are often used interchangeably. But in this article, we will try to clarify the difference between a real estate agent and a Realtor and explain each profession’s particularities. If you’re looking to find a real estate agent or a Realtor, first, you must understand the differences between each profession.   

 

What is a real estate agent?

What is the main difference between these two real estate professionals? Let’s start with the basics. Real estate agents are licensed professionals who assist individuals in buying, selling, or renting a property. Real estate agents generally specialize in either commercial or residential real estate, and their responsibilities usually depend on whether they work for the buyer, seller, or renter. Agents who work for the seller, or listing agents, support clients during the home selling process. They provide valuable information about how to set a correct price for the property and tips on selling it faster. From this point of view, there’s no difference between a real estate agent and a Realtor. Seller agents promote the properties through listing services, advertisements, and their network of real estate professionals.

 

The buyers' agents help prospective homebuyers to find properties according to their needs and price range. They also help buyers offer realistic bids for the property of their interest by thoroughly researching market trends and industry conditions. On the other hand, rental agents collaborate with potential tenants to find rental units within a specific region. Those are some of the benefits of hiring a real estate agent.  

 

To be a real estate agent, you must take specific courses and pass a state examination. Generally, licensing requirements vary according to each state, but to become a real estate agent, you must complete around 30 to 90 hours of coursework and possess in-depth knowledge about the local, state, and national real estate laws and practices. Some states may require the agents to continue their education and renew their licenses every couple of years.

 

How to become a real estate agent?

executive finance real estate agent coffeeTo better understand the difference between a real estate agent and a Realtor, a significant component is understanding how to become a real estate agent. Many might wonder about the different jobs in real estate, and being a real estate agent is among the most common. 

Besides possessing specific skills, like good communication and negotiation skills, there are a few steps you must complete in order to become a real estate agent. 

 

The first step in becoming a licensed real estate agent is researching the age and state requirements in your region. After you have done proper research, the next step is to start approved real estate courses, either physically or online. When you complete the courses, it is time to apply to participate in the final licensing exam. If the results meet the minimum score requirements in your state, you can start your practice with a professional real estate agent to gain experience. Then, you can apply for your license and begin working as a real estate agent. The real estate industry is dynamic and ever-changing, so it’s advisable to continue your education and renew your certifications as required.  

 

How do real estate agents get paid?

Real estate agents earn their income through commission fees paid by property sellers to facilitate a real estate transaction. This commission is typically a percentage of the property’s       

sale price and is divided between the buyers' and sellers' agents. 

 

In most cases, the total commission ranges from 5% to 6% of the property’s sale price, though this can vary. The seller’s agent usually receives half of the total commission, while the buyer’s agent receives the other half. The specific percentage split can be negotiated between the agents and their clients. If you’re wondering who pays the real estate agent, the answer is a little bit tricky. It is customary for the seller to cover the cost. But typically, the seller includes the cost in the house's list price. Thus, the buyer eventually pays the fee, albeit indirectly. 

 

It’s important to note that the commission doesn’t go directly to the agents; it’s paid to their respective real estate brokerages. Agents are then compensated by their brokerages based on their individual agreements, which might involve a commission split or a combination of a split and other fees. How much does a real estate agent make? That depends on several factors. 

 

What is a Realtor?

Now that we’ve got a grasp of what a real estate agent is, knowing the difference between a Realtor and a real estate agent is crucial. A Realtor is a licensed real estate agent member of the renowned National Association of Realtors ( NAR). The association was founded in 1908 in Chicago and has over 1.5 million members, including real estate agents, property managers, appraisers, counselors, and other individuals involved in the real estate process. It’s the largest trade association in the USA and one of the most reputable, despite the recent NAR commission lawsuit, which has cast a shadow of doubt on its reputation, potentially making the association lose many members. Real estate agents who want to adhere to this organization must have a valid license and a clean background. All Realtors must follow a strict Code of Ethics, ensuring clients work with professionals who provide the best services. 

 

According to NAR, almost half of the real estate agents in the USA are registered as Realtors. Agents choose to join NAR because it’s an influential association looking after the interests of its members. As a trade association, the NAR has significant negotiating power with state and federal governments. Realtors across the country can profit from increased legal protections and benefits through the use of this influence. In summary, becoming a Realtor is not necessary, but this is the ideal course of action for specific real estate agents. Also, it’s important to note that in some states, it's mandatory to be a NAR member to access the MLS. 

 

How to become a Realtor?

nar logo on a mobile phoneAs with becoming a real estate agent, there are specific steps to follow to become a Realtor. As mentioned above, the first thing in becoming a Realtor is being a real estate agent. Then, you must identify and join your region's local chapter of NAR. To become a member of NAR, a fee must be paid regularly, and you must pass the online course on the Code of Ethics.

 

Being a member of NAR means throughout your career, you must follow the organization’s standards of practice and guidelines. You must retake the online course every four years to maintain the certification.  

 

Why is the term “Realtor” always capitalized?

There’s a subtle difference between a real estate agent and a Realtor. You might haven’t noticed, but the term “Realtor” holds a unique distinction - it is always capitalized. This might seem like a mere grammatical detail, but it carries significant legal weight. NAR has trademarked the term, setting it apart from the generic “agent.” This capitalization is a nominal marker, highlighting a key difference between a Realtor and a real estate agent.

 

The term's history dates back to 1916 when the NAR coined “Realtor” to provide its members with an exclusive identity, a way to distinguish themselves from those who weren't part of the association. This distinction was crucial in maintaining professional standards and ethics within the real estate industry. Over the years, the term gained recognition and popularity, becoming synonymous with a certain level of expertise and commitment. 

 

In 1950, the NAR took a significant step by obtaining a copyright and trademark for the term “Realtor.” This legal protection ensured that only members of the NAR could officially use the title, preventing unauthorized usage by non-members. The trademark added a layer of exclusivity, reinforcing the professional standards upheld by the NAR. 

 

Fast forward to today, and the trademark for “Realtor” is still upheld by the U.S. Patent and Trademark Office. This legal safeguard underscores the importance of maintaining the integrity of the term and protecting it from dilution or misuse. The NAR’s commitment to preserving the exclusivity of the title ensures that consumers can trust that a licensed Realtor is a member of a professional organization with strict ethical guidelines.    

 

For individuals entering the real estate industry, understanding the difference between a real estate agent and a Realtor is not merely an exercise in semantics. It signifies a commitment to a higher standard of professionalism and ethics. Becoming a Realtor involves aligning with an organization with a century-long history of shaping and upholding the best practices in the real estate profession.

    

Advantages of being a real estate agent

portrait real estate agent apartment saleTo fully understand the difference between a real estate agent and a Realtor, we need to know about the advantages of each profession. Of course, some of the benefits might apply to both careers, but there are also a few distinctions. Let’s look at some of the advantages of being a real estate agent and understand why the difference between a Realtor and a real estate agent is so significant. 

 

1. Flexibility and independence

One of the notable perks of being a real estate agent is the flexibility it provides. Real estate agents often have the ability to set their own schedules, allowing for a better work-life balance. This independence also extends to decision-making, enabling agents to shape their strategies and approaches based on their unique strengths and market understanding. 

 

Real estate agents operate as independent entrepreneurs, steering their own businesses within the larger framework of the industry. This entrepreneurial autonomy empowers individuals to make crucial decisions, innovate, and implement personalized strategies to build their brand. The ability to take charge of one’s professional destiny is a key factor that attracts individuals seeking a sense of ownership and control over their careers.  

 

2. Unlimited earning potential

saving energy money concept ideaReal estate offers the possibility of substantial financial rewards. Real estate agents can increase their earnings by closing more deals as commission-based professionals. A successful real estate agent can build a lucrative income stream, making it an attractive field for those motivated by financial success. 

 

One of the key factors contributing to the unlimited earning potential in real estate is the diversity of income streams available to real estate agents. For instance, they earn commissions on property transactions, directly correlating effort and income. Property management, real estate development, and investment consultancy also open up further avenues for generating revenues. The best-paying jobs in real estate bring substantial earnings to skilled professionals.   

 

3. Diverse networking opportunities

Building and maintaining a strong network is crucial in real estate. Agents interact with a large number of professionals, including other real estate agents, mortgage brokers, home inspectors, and more. This extensive network enhances business opportunities and provides a platform for personal and professional growth. 

 

Getting involved in community events and initiatives also creates networking opportunities. Volunteering for community projects, sponsoring local events, or participating in neighborhood meetings can help real estate agents establish a positive reputation and gain the trust of potential clients. 

 

4. Helping people achieve dreams

portrait cheerful family couple kids playingBeing a real estate agent involves assisting clients in realizing their dream of homeownership. Whether it’s a first-time homebuyer or a family looking to upgrade, agents play a crucial role in guiding clients through the intricate process of buying or selling a property. This aspect can be incredibly fulfilling, knowing that you’ve positively impacted someone’s life. 

 

Real estate transactions can be complex, involving legal, financial, and logistical intricacies. Real estate agents act as facilitators, guiding clients through each step of the process and providing valuable real estate tips for buyers and sellers. From coordinating inspections to navigating the paperwork, their expertise ensures a smooth and efficient journey toward realizing the client’s dream. 

 

5. Continuous learning and adaptability

The real estate industry is competitive and ever-changing. Staying informed about market trends, new technologies, and legal regulations is essential for success. This constant learning curve keeps real estate agents sharp, adaptable, and able to navigate challenges effectively. 

 

The real estate market is multifaceted, encompassing legalities, finance, market analysis, and interpersonal skills. Continuous education programs, workshops, and seminars provide real estate agents with insights into the latest industry trends, legal updates, and innovative marketing strategies. This ongoing learning enhances their knowledge and builds confidence in handling diverse situations.  

 

6. Varied work environment

Real estate agents experience a diverse range of work environments. From meeting clients in coffee shops to visiting different properties, each day brings new experiences. This variety keeps the job exciting and allows agents to develop a well-rounded skill set. 

 

Real estate agents enjoy a balanced mix of office and fieldwork. While they may spend time in the office handling paperwork, communicating with clients, and strategizing, they also venture into the field to view properties, attend inspections, and host open houses. This balance ensures that work remains dynamic and multifaceted. 

 

7. Job security and demand

The real estate industry is a fundamental part of the economy, and people will always need homes. As long as buying, selling, and renting properties exist, the demand for skilled real estate professionals remains steady. This stability contributes to job security for those in the field. 

 

Moreover, the diverse nature of the real estate market provides agents with various niches to explore, such as residential, commercial, industrial, or rental properties. This diversity allows real estate agents to adapt to market changes and shift their focus based on evolving trends, ensuring continued opportunities for employment. 

Advantages of being a Realtor

contracts offer real estate agentsMost of the advantages of being a Realtor are the same as those of being a real estate agent. Still, some key differences set Realtors apart and offer unique benefits in the real estate industry. 

 

1. High level of professionalism

One notable advantage is the elevated level of professionalism associated with the title of Realtor. As previously mentioned in the article, Realtors are members of the National Association of Realtors (NAR) and adhere to a strict Code of Ethics, emphasizing a commitment to honesty, integrity, and fair dealings. This distinction enhances their reputation and builds trust with clients, setting them apart in a competitive industry.  

 

2. Numerous educational opportunities

Exclusive access to valuable resources is another distinctive advantage for Realtors. Through NAR, they gain access to extensive market data, educational opportunities, and networking events. This wealth of resources empowers Realtors with up-to-date information and knowledge, enabling them to make informed decisions for their clients and stay ahead of market trends. Each year, NAR hosts a major convention, which is also available to non-members, where they can attend seminars and educational meetings. An additional fee is charged for non-members to participate in this convention. 

 

3. Enhanced networking

Moreover, being a Realtor opens doors to an extensive professional network. Collaborating with other Realtors fosters a cooperative environment where information and expertise are shared. This network benefits individual Realtors and enhances the real estate industry, promoting collaboration for mutual success. 

 

4. Brand awareness 

The brand recognition associated with the Realtor title is a significant advantage. Clients often perceive Realtors as more credible and reliable due to the strict requirements for obtaining and maintaining this designation. This trust can be a decisive factor for clients when choosing a real estate professional, providing a competitive edge for Realtors in a crowded market.

 

Choosing between a Realtor or a real estate agent

business eco real estate office conceptAfter discussing the difference between a Realtor and a real estate agent, a common question that often arises is whether to choose a Realtor or a real estate agent. The decision to work with a Realtor or real estate agent is crucial in the home buying or selling process. While both play essential roles, certain considerations can guide you in making the right choice for your specific needs. 

 

1. Recognize the differences between the two professions

 Firstly, it’s essential to recognize that all Realtors are real estate agents, but not all real estate agents are Realtors. Realtors, as members of NAR, adhere to a strict Code of Ethics. This distinction implies a higher level of commitment to professionalism and integrity. If ethical standards are your top priority, choosing a Realtor might be the ideal path. 

 

On the other hand, though not bound by the NAR Code of Ethics, real estate agents still possess the necessary qualifications to facilitate property transactions. They can be equally knowledgeable and skilled, often providing a more cost-effective option for those prioritizing budget considerations. 

 

2. Acknowledge what you need

When deciding between a Realtor and a real estate agent, consider the specific expertise and experience each professional brings to the table. Realtors may have additional training and certifications, making them more adept in complex transactions or specialized areas of real estate. If your real estate needs involve unique challenges, a Realtor’s expertise might be the edge you need.

 

Another critical factor to weigh is your required personal attention and commitment level. Realtors, with their commitment to the NAR Code, may demonstrate a higher level of dedication to your interests. However, this doesn’t imply that real estate agents lack dedication; it simply emphasizes the unique commitment that comes with Realtor membership. 

 

3. Communicate your expectations

It’s crucial to clearly communicate your expectations and preferences when choosing a Realtor or a real estate agent. Whether it’s frequent updates, specific market knowledge, or negotiation skills, discussing these aspects upfront will help you align with a professional who can meet your needs effectively. 

 

Ultimately, choosing a Realtor or a real estate agent depends on your priorities, preferences, and the specific nuances of your real estate transaction. Take the time to evaluate the qualities that matter most to you. Don’t hesitate to ask potential candidates about their approach, experience, and commitment to ensuring a successful real estate journey. Also, it’s essential to check the reviews of each professional. It will significantly influence your decision.   

 

Writer’s conclusion

We hope the difference between a real estate agent and a Realtor is clear by now. Choosing a Realtor or a real estate agent is akin to selecting the perfect partner for a significant life journey. It’s a decision not to be taken lightly, as the nuances between the two roles can significantly impact the success of your property endeavors. 

 

Opting for a Realtor, with their additional training and stringent Code of Ethics, is like securing a trusted ally on your expedition. Their commitment to professionalism and integrity adds an extra layer of assurance. The personalized touch they bring ensures a smoother transaction, leaving you with not just a property but a holistic experience. 

 

On the other hand, a real estate agent, while adept in the field, might suit those seeking a more laid-back approach, focusing on transactions rather than the comprehensive support a Realtor provides. Lastly, choosing a realtor or a real estate agent is as personal as finding the right companion. Your decision hinges on whether you prioritize a robust, ethical partnership or a more transactional relationship. So start your real estate journey wisely, and choose the professional whose values and approach align with your aspirations. 

 

If I were to choose between a real estate agent and a realtor, I would probably go for the latter. The additional qualifications and certifications that come with the Realtor title reassure me that I’m working with a qualified professional. But don’t let my need for reassurance influence your decision. A real estate agent might be even more skilled than a Realtor without having the additional qualifications. Consider this scenario: It’s akin to selecting between two doctors - one with a prestigious specialty title and the other with extensive experience. While the specialist’s title may provide a sense of confidence, the general practitioner might possess the exact expertise needed for your specific situation. In real estate, the choice ultimately depends on the individual’s skills, experience, and understanding of your unique needs.

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