The Differences Between a Real Estate Agent, a Broker, and a Realtor
Key Takeaways:
Real estate agents, brokers, and realtors are not the same. Agents and brokers are state-licensed professionals, while a Realtor is any real estate professional who is a member of the National Association of Realtors (NAR) and follows its Code of Ethics.
Real estate agents handle most standard transactions. They help buyers and sellers list, show, negotiate, and complete property deals, but must work under the supervision of a licensed broker.
Real estate brokers have more training and responsibility. Brokers can work independently, run brokerages, supervise agents, and are better suited for complex or high-value transactions that require advanced oversight.
Realtors commit to higher ethical standards. By joining the NAR, Realtors agree to uphold strict ethical guidelines focused on professionalism, honesty, and protecting clients’ interests—adding an extra layer of trust for consumers.
Real estate agent, real estate broker, or realtor? These are words you hear a lot when trying to buy or sell properties. To most people, these three terms mean the same thing; that is, real estate agent and real estate broker are just different ways of saying the same thing.
But is that correct?
Although real estate agents, brokers, and realtors do more or less the same things, there are important differences between these three professionals that every real estate investor must understand. In this post, we explain those differences.
Real Estate Agent, Realtor, or Broker– What's the Difference?
Why is it even important for you to know these differences?
To navigate complex deals: One of the main differences between estate agents, brokers, and realtors is the level of complexity their training allows them to handle when working on deals. This knowledge helps you match the right professional to the right transaction.
Ethics and trust: Every real estate professional is required to uphold a specific code of ethics, but because of their training, some professionals adhere to a higher standard of professional conduct. Knowing this fact can help you make better decisions.
Here are the differences between the roles of a real estate agent, a broker, and a realtor.
Real estate agents
These are individuals who are licensed to help others buy, sell, or rent properties. Their primary role is to connect buyers and sellers, in exchange for a commission, which is usually based on a percentage of the transaction value. Real estate agents are licensed by states, and the criteria for becoming one vary from state to state.
To qualify as a real estate agent, individuals must meet these general requirements:
They must be no younger than 18 years old
Be a legal resident of the United States
Complete the required pre-licensing classes for that state
Pass the state’s real estate license exam
Have no criminal record (complete a background check)
Be sponsored by a licensed real estate broker
And complete the required classes to maintain their license
Real estate agents guide their clients through every step of a transaction by ensuring the client understands the requirements to complete the deal. They organize every detail of the sale by carrying offers, counteroffers & queries between buyers and sellers, as well as walking clients through the home inspection and other aspects of the transaction.
Real estate agents can work on both sides of a deal. They may represent the buyer (in which case they are known as a buyer's agent) or the seller (a listing agent). Depending on which side they are working on, they can help with setting the list price, staging the home, negotiating prices, and submitting or filing documents.
When should you use a real estate agent? Use a real estate agent if you are involved in a basic transaction or you need help listing or showing your property. The capabilities of a real estate agent are more than enough to meet the requirements of most property deals.
Real Estate Brokers
Unlike real estate agents, real estate brokers work independently. They can start their own brokerage firm and hire real estate agents to work for them. Also, the training requirements to become a broker are more rigorous than the requirements to become a real estate agent. After completing their training, they are awarded a real estate broker's license by the state.
Like real estate agents, brokers work to match clients to properties that meet their criteria and also act as links between buyers and sellers. Real estate brokers help clients determine the value of their property, list and show properties, negotiate on behalf of their clients, prepare offers, and communicate with other parties about details of an offer.
Like real estate agents, real estate brokers may also work on the side of the buyer or seller. Based on their roles, there are three kinds of real estate brokers:
Associate brokers: These are licensed brokers who prefer to work under another broker, instead of starting their own brokerage. Associate brokers usually don’t supervise agents.
Managing brokers: These oversee the day-to-day operations of the brokerage. They are responsible for hiring agents, training them, overseeing transactions, and managing the brokerage’s administrative staff.
Principal or designated brokers: These brokers supervise the work of real estate agents to ensure compliance with state regulations and relevant real estate laws. All real estate firms are required to have at least one principal or designated broker.
When should you use a real estate broker? Use a real estate broker if you're working on high-value real estate deals with complex details or transactions that require extensive oversight.
Since brokers have more education and training, they can offer more specialized services. Hire a broker if you want someone who can work independently to manage your property.
Realtors
Any professional within the real estate space, not just real estate agents and brokers, can become a realtor. A realtor is a real estate professional who is a member of the National Association of Realtors (NAR), the largest trade association in the US. This includes different experts ranging from salespeople to property managers and appraisers.
To become a realtor, the applicant must:
Have a valid and active real estate license
Be directly involved in the property business
Not be under any form of official sanction for unprofessional conduct
Not have filed for bankruptcy recently
Once these four conditions are met, a one-time application fee is required before the professional can join a local chapter of the NAR. Subsequently, they must pay an annual membership fee to retain their membership. Every member of the National Association of Realtors must adhere to the NAR’s strict Code of Ethics.
Members of the NAR are allowed to attach the Realtor trademark to their name. As per the NAR’s code of ethics, realtors must maintain the highest standard of professionalism when conducting business. This means ensuring a strong emphasis on honesty and integrity, as well as a commitment to protecting their clients’ interests at all times.
To conclude, real estate agents and real estate brokers are licensed by the state, but realtors are licensed by the NAR. You may use a real estate agent for property deals that are not complex and brokers for transactions that require advanced knowledge and skills. Realtors are best for transactions that require the highest degree of professionalism.