Real estate agents, brokers and realtors all play different roles in the real estate industry yet have similar jobs. Many people don’t know the difference between them and use the terms interchangeably, which just adds to the confusion.
Here is a quick overview of these three roles:
Real Estate Agent
A real estate agent is a salesperson. This is an entry-level position. A salesperson works for a broker under the broker’s license and cannot work independently. To become a real estate salesperson, an applicant must:
– Have a high school diploma or GED.
– Complete prelicense education courses.
– Pass the salesperson license exam.
A salesperson is usually the most visible person involved in a real estate deal. Duties include meeting with potential clients, finding real estate property that suits the client’s needs and showing the property to clients, yet they legally cannot broker the deal themselves.
A salesperson earns a commission from the broker for each successfully completed real estate deal.
Some states operate on a broker-only licensing system. In these states, the salesperson license is instead referred to as an associate broker license but the duties and responsibilities of both license are essentially the same.
Real Estate Broker
A real estate broker is the highest level of real estate professional. They are required to have more education and experience than real estate agents. In most states, there are three ways to become a real estate broker:
– Have a four-year degree and complete all of the required prelicense education requirements and pass the broker exam.
– Have between two to four years of real estate sales experience and complete all of the required prelicense education requirements and pass the broker exam.
– Have a membership to the legal bar and pass the broker exam.
Brokers are also required to complete more prelicense education requirements than a salesperson before applying for a broker license. The broker exam is usually longer and more technical than the salesperson exam.
Although a broker can legally work as a salesperson, they usually have more of a managerial role of overseeing a staff of salespeople who work for him or her under the broker’s license. Brokers make more money than real estate agents but also have more responsibilities and are legally more liable for mistakes made during real estate transactions.
A realtor is simply a real estate professional who is a member of the National Association of Realtors. Realtors must abide by the NAR’s strict code of ethics, which requires members to uphold specific duties to clients, the public and other realtors. The code of ethics states that realtors “shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction…shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing and other representations….pledge themselves to protect and promote the interests of their client” while treating all parties honestly.