Real Estate Agent, Broker, Realtor: What’s the Difference?
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 these titles are used 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.
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 individuals to have 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, while in California they need 135 hours of license coursework.
Once that training is done, aspiring agents take a written licensing exam. This exam is 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 exam, they’ve earned a license, the title of a “real estate agent,” and they might join a brokerage where they can begin working with home buyers, sellers, and renters.
Watch: Buying a Home? Here’s What Real Estate Agents Wish You Knew
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:
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 holds 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.
A listing agent is a real estate agent who represents a home seller. These professionals help clients who are selling 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 services offered and the housing market.
True to their name, buyer’s agents represent home buyers and assist their clients 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.
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, and 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 the right professional for you
Many people find a real estate broker 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 people in person, and ask the agents some key questions to find out if they’re a good fit for you and the transaction you’re looking for.
Michele Lerner contributed to this article.
This content was originally published here.