Agent, Broker, Realtor: Do You Know the Difference?
If you’re a first-time homebuyer or relatively new to real estate, understanding all the different service providers related to a transaction can be confusing. Consumers often ask about the differences between a real estate agent, a realtor, and a broker. While they all play a similar role, it can be helpful to know the differences, especially when seeking a professional to represent you during the home buying process. Below, we’ll clear up any confusion about these similar but distinct roles and discuss how each can help you on your journey to becoming a new homeowner.
What Is a Real Estate Agent?
A real estate agent is a licensed professional who helps to support consumers and businesses through real estate transactions. The qualifications to become a real estate agent vary from state to state. However, generally speaking, real estate agents are required to go through anywhere from 30 to 90 hours of training and must pass a test to obtain a license. A real estate agent license must also be renewed on an ongoing basis. Real estate agents can serve two different roles:
- Buyer’s agent – A real estate agent representing a buyer is known as a buyer’s agent. A buyer’s agent can help home shoppers find properties, negotiate offers, manage the closing process, connect with service providers, and a lot more.
- Listing agent – The seller’s real estate agent is responsible for attracting buyers to the property. They can assist with setting an asking price, staging the home, taking listing photos, and more.
Real estate agents do not receive any upfront compensation. Instead, they receive a commission for their services, which is a percentage of the final sale price. The agent commission is usually split between the buyer’s agent and the seller’s agent. If an agent is representing both buyer and seller, they can earn both sides of the commission.
What Is a Realtor?
A Realtor is simply a real estate agent who has joined the National Association of Realtors (NAR). NAR is a trade organization for real estate professionals. In order to join, members are required to have a strong reputation and a history of professional conduct. Realtors are also required to maintain NAR’s code of ethics. In exchange, NAR offers its realtors an opportunity to attract new customers through its extensive network and provides industry resources to support professional development. When working with a Realtor, you have the added confidence of knowing you’re working with a qualified, experienced, and reputable agent.
What Is a Broker?
A real estate broker is an individual or company that has expertise in real estate law, property management, and investments. Broker qualifications also vary by state, but they generally require several years of real estate agent experience as well as an additional test. Real estate agents can hang their licenses with brokers, which means brokers will receive a cut of the agent commission in exchange for legal and consulting resources as well as access to the broker’s network and brand. When evaluating real estate agent partners, it’s important to not only consider the experience of the agent but also the reputation of the broker as well.
Real estate jargon can be confusing, but understanding the different roles and professions can help you be better prepared when it comes time to find a professional to guide you through the home buying process.
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