Real Estate Agent Vs. Realtor® : Is There Really a Difference?
All Realtors® are real estate agents, but not all real estate agents are Realtors®. It sounds like the beginning of a logic question on the LSAT, but actually that little sentence represents a truism many first-time buyers find mysterious. When I started looking for an agent, I didn’t know the word “Realtor” had any distinction from the words “real estate agent.”
But does it matter? Look at this way: if you’re about to buy a house, you should be as educated as possible about the process. Knowing everything you can about the kind of support available to you can only help you become a homeowner more easily. Understanding an agent from a Realtor® is part of your education. Once you know the difference, you can better decide whom you want on your side as you embark on your home-buying adventure.
Real Estate Agent Vs. Realtor ®
Real Estate agents are people who have passed a state exam and received a license to engage in the practice of real estate for that given state. Every agent must have this license to engage in real estate transactions, so that means Realtors®, who are also agents, also have passed the exam and obtained the license.
But from there, Realtors® further distinguish themselves. Realtor.com puts the difference most simply: " A real estate agent is a REALTOR® when he or she is a member of the NATIONAL ASSOCIATION OF REALTORS® [NAR] The Voice for Real Estate® -- the world's largest professional association.”
What Does Being a Member of the NAR Mean?
What’s involved with becoming a member of the NAR is more than just paying dues—because the NAR is more than just an association of Realtors®. From the official NAR website:
- “The NAR is composed of residential and commercial REALTORS®, who are brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry.” Members sit on boards and committees together to share information about their respective expertise in the real estate industry. “Members belong to one or more of some 1,700 local associations/boards and 54 state and territory associations of REALTORS®.”
- The NAR constantly offers professional development to its members. The association offers institutes and councils in all facets of real estate, everything from changes in lending practices to appraisal to international real estate.
The Code of Ethics
We have likely heard that Realtors® also must prescribe to a legally enforceable code of ethics. Yet what are those ethics, and how do they affect us as buyers? Again from the NAR’s own site, here is what your Realtor® pledges to do:
- 1) Pledge to put the interests of buyers and sellers ahead of their own and to treat all parties honestly.
- 2) Shall refrain from exaggerating, misrepresenting or concealing material facts; and is obligated to investigate and disclose when situations reasonably warrant.
- 3) Shall cooperate with other brokers / agents when it is in the best interests of the client to do so.
- 4) Have a duty to disclose if they represent family members who own or are about to buy real estate, or if they themselves are a principal in a real estate transaction, that they are licensed to sell real estate.
- 5) Shall not provide professional services in a transaction where the agent has a present or contemplated interest without disclosing that interest.
- 6) Shall not collect any commissions without the seller's knowledge nor accept fees from a third-party without the seller's express consent.
- 7) Shall refuse fees from more than one party without all parties' informed consent.
- 8) Shall not co-mingle client funds with their own.
- 9) Shall attempt to ensure that all written documents are easy to understand and will give everybody a copy of what they sign.
- 10) Shall not discriminate in any fashion for any reason on the basis of race, color, religion, sex, handicap, familial status, or national origin.
- 11) Expects agents to be competent, to conform to standards of practice and to refuse to provide services for which they are unqualified.
- 12) Must engage in truth in advertising.
- 13) Shall not practice law unless they are a lawyer.
- 14) Shall cooperate if charges are brought against them and present all evidence requested.
- 15) Agree not to bad mouth competition and agree not to file unfounded ethics complaints.
- 16) Shall not solicit another REALTOR'S client nor interfere in a contractual relationship.
- 17) Shall submit to arbitration to settle matters and not seek legal remedies in the judicial system.
While the code of ethics can’t actually force a person to be intrinsically ethical, the NAR recognizes the seriousness of the Realtor’s® position and seeks to ensure high professional standards, which is comforting to we new buyers who need so much assurance.