Realtor vs. Real Estate Agent discussion is a dated discussion, but it keeps coming back in every real estate investor’s mind.
A real estate agent is a person who holds a valid real estate license and assists people in buying selling or renting the properties. A real estate professional is referred to as a realtor when he becomes a member of the National Association of Realtors (NAR).
Realtor vs. Real Estate Agent - Key Differences
While planning to sell/buy/ rent a place, you must have come across a lot of titles being thrown your way. You must have encountered many real estate agents and realtors.
Since the two titles are used interchangeably in everyday life, there is a common misconception that these two mean one and the same thing.
However, it is not the case. Even though the two professions have many overlapping similarities yet there are many key differences which set them apart. In this article, we will try to learn address just that, the key differences between Realtor vs. Real Estate Agents.
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Who is a Real Estate Agent?
A real estate agent is a person who holds a valid real estate license and assists people in buying selling or renting the properties. They act as intermediaries in property transactions and bring together buyers and sellers. They are generally paid a percentage of the property’s cost as commission.
In order to become a real estate agent, a person has to undertake some requisite coursework after which they will appear in an examination.
After passing the examination, the real estate license will be issued to them. Certain states require real estate agents to continue the course work for renewing their license after a specific period of time.
Real estate agents are sometimes also referred to as real estate salespersons or real estate associates. Their job involves carrying offers and their respective counter offers to the different parties involved in the transaction of a property.
Other roles of a real estate agent includes making arrangements for home inspection and appraisal, guiding clients through the associated paper work, addressing their queries regarding the property, and ensure that their client understands all the requirements of the transaction
Based upon who they are representing, real estate agents can be identified as listing agents and buyers agents, respectively. The listing agents assist the sellers in setting the price, suggest updates that will enhance the value of the property and market the home.
A buyer’s agent provides assistance to a buyer in finding a house that suits their budget and helps them in home inspection and appraisal. Both the listing agent as well as the buyer’s agent negotiate the final price and help their clients in the paperwork involved.
Who is a Realtor?
A real estate professional is referred to as a realtor when he becomes a member of the National Association of Realtors (NAR). NAR was founded in 1998 and is the largest trade association in the US.
In order to become its member, a person must have a valid real estate license and must be a member of any local real estate board or association. Alongside these two conditions, a real estate agent must also hold an impeccable record of professional conduct.
A person who satisfies all these requirements can become a member of the NAR on the payment of the one-time application fee. In order to continue the membership, an annual maintenance fee is to be paid.
The NAR upholds high standards of ethics and therefore enjoys a good reputation. Therefore, being a member brings your way more clients. Not only this, but NAR also enjoys strong bargaining power with the government. It brings a lot of benefits for the realtors.
Besides being a member of the NAR, a realtor also needs to observe a code of ethics and 17 other articles.
Code of Ethics
Drafted by the National Association of Realtors, the code of ethics is a set of guidelines that the realtors need to abide by. It is enforced upon by the various real estate boards. It comprises of 17 articles which cover all the different aspects of the professional standards of the real estate industry.
The professional code is revised every year in order to keep into consideration all the recent developments in the industry. The key message of the various points of the code is to "treat all parties honestly."
The summary of all the 17 articles that a realtor has to abide by is given here:
- To treat all the parties involved in the sale/ purchase of a property with honesty and put clients’ interests before their own.
- To not exaggerate, misrepresent, or withhold any facts about the transaction that lay within the scope of their real estate license.
- To cooperate with brokers for upholding the interests of the client.
- To inform the client about any other clients who are member of their family.
- To avoid rendering professional services for a property that a client has an interest in, unless it is disclosed to them.
- TO seek clients, consent before agreeing to accept any commission or any other form of payment.
- In case multiple parties are involved in a real estate transaction, then to disclose to all parties about any payment that is to be received, beforehand and seek their consent.
- To keep their personal funds, separate from that of clients’.
- To ensure that all the agreements are clearly communicated and understood by all the parties involved in a transaction. Also, to make sure that all the parties receive a copy of agreement.
- To not discriminate with any person based on their color, race, religion, sex, physical disabilities, family status, nation of origin, sexual orientation, or gender identity.
- To competently uphold the standards of practice in the discipline of real estate, and to not provide services that they might not be qualified for.
- To remain truthful in all the respective advertising and marketing materials.
- To not practice law unless they are authorized to do so.
- In case they are charged with unethical practice, they must ensure cooperation and to present all the available evidence.
- To refrain from making false or misleading statements about fellow professionals from the real estate industry.
- To not interfere in another realtor’s contractual relationships.
- To employ arbitration rather than litigation while handling disputes with other realtors.
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Realtor vs. Real Estate Agent: Key Differences
While understanding the Realtor vs. Real Estate Agent: key differences, the first and the most important criteria is the NAR membership. Only those who are a member of the NAR can be identified as realtors.
It is to be noted here that all realtors are not necessarily real estate agents. They can belong to other categories of professionals in the real estate industry such as real estate brokers (both residential and commercial), salespersons, property managers and real estate appraisers.
Besides the membership of NAR, realtor and real estate agent can also be distinguished on the basis of the strict code of ethics that the realtors have to observe as mandated by the NAR. Realtors are required to maintain a clear record, not involving any kind of ethical misconduct.
Furthermore, realtors enjoy the freedom of using the trademark realtor as a part of their name, provided that they do not use it as a designation on their professional license.
In order to enjoy the status of being a realtor, a professional needs to take an online course on the code of ethics after every 4 years or they will lose the certification and therefore, their NAR membership.
This is one of the key points that sets a Realtor vs. Real Estate Agent apart. Real estate agents do not need to maintain any such certifications.
When it comes to professional duties, you can say that the Realtor vs. Real Estate Agent distinction ceases to exist. There is not any difference in the discharge of duties by the two professionals.
Realtor vs. Real Estate Agent: Takeaway
Although, on a professional basis, the roles of Realtor vs. Real Estate Agent do not have much differences, yet as a member of the prestigious NAR, a realtors enjoys many privileges in terms of having a good reputation in the real estate market. A realtor also enjoy many legal advantages that come with the NAR membership.
A realtor needs to observe a strict code of ethics and maintain a certification for the same, failing which he will cease to enjoy the benefits of being a member of the NAR. A real estate agent does not need any such certifications.
A realtor gets the benefit to use the trademark Realtor in their name. A real estate agent does not enjoy any such perks.
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