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Real Estate Agent, Broker, Realtor: What’s the Difference?

May 8, 2019

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Whether you want to buy or sell a home, you’ll want some help. So who should you hire? Real estate professionals go by various names, including real estate agent, real estate broker, or Realtor®. So what’s the difference?

Sometimes consumers use these titles interchangeably, but rest assured, there are some important differences, as well as varying requirements for using particular titles.

Here’s a rundown of the real estate professional titles you’ll come across, and what they mean.

Real estate agent

A real estate agent is someone who has a professional license to help people buy, sell, or rent all sorts of housing and real estate.

To get that license, states require that individuals take prelicensing training. The required number of training hours can vary significantly by jurisdiction. In Virginia, for example, real estate agents must take 60 hours of prelicensing training, but in California they need to take 135 hours.

Once that training is done, aspiring agents take a written licensing exam. These exams are typically divided into two portions: one on federal real estate laws and general real estate principles, the second on state-specific laws.

Once they pass their exams, they’ve earned the title of a “real estate agent” and can begin working with home buyers, sellers, and renters.

Real estate broker

A real estate broker is someone who has taken education beyond the agent level as required by state laws and passed a broker’s license exam.

Similar to real estate agent exams, each state sets its own broker education and exam requirements. The extra coursework covers topics such as ethics, contracts, taxes, and insurance—at a more in-depth level than what’s taught in a real estate agent prelicensing course.

Prospective brokers also learn about real estate legal issues and how the law applies to operating a brokerage, real estate investments, construction, and property management.

As a result, “brokers have in-depth knowledge of the real estate business,” says Jennifer Baxter, associate broker at Re/Max Regency in Suwanee, GA.

To sit for the broker’s exam and obtain licensure, real estate agents must already have a certain level of experience under their belt—typically, three years as a licensed real estate agent.

There are three types of real estate brokers, each with subtle differences in the role they perform:

  • Principal/designated broker: Each real estate office has a principal/designated broker. This person oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. Like real estate agents, principal brokers get paid on commission—taking a cut of the commissions of the sales agents they supervise (although many principal brokers receive an annual base salary).
  • Managing broker: This person oversees the day-to-day operation of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff. (Some principal/designated brokers also serve as managing brokers.)
  • Associate broker: This real estate professional—sometimes called a broker associate, broker-salesperson, or affiliate broker—has a broker’s license but is working under a managing broker. This person typically is not responsible for supervising other agents.

 

Realtor

In order to become a Realtor—a licensed agent with the ability to use that widely respected title—an agent needs to be a member of the National Association of Realtors®.

As a member, a person subscribes to the standards of the association and its code of ethics.

“Essentially, the NAR hold us to a higher standard,” says Peggy Yee, a Realtor in Falls Church, VA. Membership in the NAR also comes with access to real estate market data and transaction management services, among other benefits.

Listing agent

A listing agent is a real estate agent who represents a home seller. Listing agents help home sellers with a wide range of tasks, including pricing their home, recommending home improvements or staging, marketing their home, holding open houses, coordinating showings with home buyers, negotiating with buyers, and overseeing the home inspection process and closing procedures.

Generally, listing agents don’t receive a dime unless your home gets sold. If it does, the typical agent commission is 5% to 6% of the price of your home (which is typically split between the listing agent and the buyer’s agent), but a listing agent’s fee can vary depending on the scope of their services and their housing market.

Buyer’s agent

True to their name, buyer’s agents represent home buyers and assist them through every step of the home-buying process, including finding the right home, negotiating an offer, recommending other professionals (e.g., mortgage brokers, real estate attorneys, settlement companies), and troubleshooting problems (e.g., home inspection or appraisal issues).

Fortunately for home buyers, they don’t need to worry about the expense of hiring a buyer’s agent. Why? Because the seller usually pays the commission for both the seller’s agent and the buyer’s agent from the listing agent’s fee.

Rental agent

In addition to helping people buy and sell homes, many real estate professionals help consumers find properties to rent. But what these agents do depends on the location—whether it’s a large city or a small town—and the agent.

Sometimes a rental agent will guide your search from the very start, helping you find the right neighborhood, apartment size, and price range, then go with you to open houses. More likely though, you’ll already have a lot of that information decided, and the agent will send you listings that might be of interest to you.

Once you’ve decided on a rental and have been approved by the landlord or management company, your agent should help you read and understand your lease.

“Most tenants can find a place without a real estate agent, but they forget to seek out someone who can help them understand what they’re signing when they sign a lease,” says Dillar Schwartz, a real estate agent in Austin, TX.

Rental agents will also represent landlords to help them find tenants—but the fee an agent will charge a landlord depends on what market they work in. In many places, the landlord pays the real estate agent to help find a desirable tenant. In more competitive rental markets, however, the tenant may be responsible for the real estate agent fee, sometimes called a “broker fee.” These fees can be as low as $50 to $75 for a credit check or application, but more common rates are one month’s rent or 15% of the annual rent on the apartment.

How to find a real estate agent, broker, or Realtor who’s right for you

Many people find an agent to help them through word of mouth or online. You can search for a variety of real estate professionals in your area at realtor.com’s Find a Realtor database, which includes their sales performance, specialties, reviews, and other helpful information. It’s a good idea to talk to at least three agents in person, and ask the agents some key questions to find out if they’re a good fit for you.

Michele Lerner contributed to this article.

The post Real Estate Agent, Broker, Realtor: What’s the Difference? appeared first on Real Estate News & Insights | realtor.com®.

Real Estate Professionals Explained: Agent, Broker, Realtor

February 20, 2019

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Real estate professionals go by different names. There are agents, brokers, Realtors®, seller’s agents, buyer’s agents. The list goes on.

If you’re entering the real estate market for the first time, you may find real estate professionals’ various titles a little confusing. But you’ll benefit from knowing the difference. Other professions have managers and employees, but in this area of business, it’s a little different. People tend to use these titles interchangeably, but there are some important differences between the roles of the various professionals, as well as different requirements for using particular titles.

Titles for real estate professionals

The real estate profession is regulated by state governments, which have different requirements for earning a license. In general, though, the titles you may come across include the following:

  • Real estate agent: Anyone who earns a real estate license can be called a real estate agent, whether that license is as a sales professional or an associate broker. They look at listings on the multiple listing service and help you buy or sell your house. State requirements vary, but in all states you must take a minimum number of classes and pass a test to earn your license.
  • Realtor®: A real estate agent who is a member of the National Association of Realtors®, which means that he or she must uphold the standards of the association and its code of ethics.
  • Real estate broker: A person who has taken education beyond the agent level as required by state laws and has passed a broker’s license exam. Brokers can work alone or can hire agents to work for them.
  • Real estate salesperson: Another name for a real estate agent.
  • Real estate associate broker: Someone who has taken additional education classes and earned a broker’s license but chooses to work under the management of a broker.

 

Working with real estate professionals

While you are more likely to work directly with a real estate salesperson or an associate broker when buying, selling, or renting property, some brokers provide services for buyers and sellers themselves. If you have hired a real estate agent to help you buy or sell a property, that agent typically reports to a broker. The broker handles the earnest money deposit and establishes the escrow account. They will be an invaluable resource in the whole process.

In addition, the broker bears responsibility for the actions of the real estate agents under his or her supervision. While the majority of property transactions go through without any glitches, a broker will step in if there are any problems with your home or rental property purchase or sale (e.g., issues with your mortgage or inspection).

If you are unhappy with your real estate agent and cannot resolve the issues directly, your next step should be to talk with the broker to ask for help and perhaps other real estate professionals for you to consult.

Experience and education

Real estate brokers not only have higher education requirements than real estate salespersons, they also must have knowledge and experience working as an agent. For example, in Virginia the license requirements are as follows:

  • A salesperson must take 60 hours of classes and pass an exam with both state and national sections.
  • A broker must take 180 hours of broker-specific classes, pass an exam with both state and national sections, and have actively worked as a real estate salesperson for 36 of the previous 48 months.

 

When you are looking for real estate professionals, it is wise to work with a member of the National Association of Realtors who is committed to maintaining the professionalism of the real estate business. You can choose to work with a salesperson or a broker, but as a homeowner you should take the time to interview your agent and ask for references.

The post Real Estate Professionals Explained: Agent, Broker, Realtor appeared first on Real Estate News & Insights | realtor.com®.