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Isn’t a real estate agent the same as a realtor? If you ask anyone in the general public, many of them would believe these titles are just the same. In fact, consumers often use these terms interchangeably.
However, if you were to ask a real estate professional, they would tell you there are major differences between the two.
Not all real estate agents are Realtors. To use the title “Realtor”, you need to join the National Association of Realtors, comply and receive training on their Code of Ethnics, pay the membership dues.
In this guide, we will go over the differences between a real estate agent and a realtor, so that you could educate your clients.
What is a Real Estate Agent?
A real estate agent is a licensed professional who works for clients in transactions that involve buying, selling or renting of real properties.
In many instances, the title “real estate agent” is used interchangeably with real estate salesperson, or real estate sales associate.
Depending on whether you are representing the sellers or buyers, your duties could include gathering market data in the neighborhood, house showings, negotiating/presenting offers, marketing the listed properties, and many more.
How to Become a Real Estate Agent?
To become a real estate agent, you need to fulfill the pre-licensing course work, pass the salesperson exam and obtain the real estate license from the regulatory board in your state.
The regulatory board in every state has its own education requirement when it comes to getting the real estate agent license. The pre-licensing course load is typically around 60 hours to 90 hours.
But some states could demand more studying – for example, you would need to complete 180 hours of classes to get the real estate salesperson license in Texas.
You are also required to fulfill the continuing education courses for each license renewal cycle.
[Here are some resources in helping you to get the real estate license]
What is a Realtor?
The Realtor is a trademarked title given by the National Association of Realtors (NAR) to its members. A realtor could be a real estate agent, associate broker, or a broker.
When you become A Realtor, you are required to run your real estate practice with a more stringent code of ethics and higher continuing education requirement.
At the same time, you can enjoy a wide range of benefits from NAR, which we will go over in more details later in this post.
Since not every real estate agent are members of the NAR, therefore, not every real estate agent is a Realtor.
The National Association of Realtors (NAR)
The National Association of Realtors is actually the largest trade association in the United States. It represents over 1.3 million members!
Their members do not only consist of real estate agents, associate brokers, and managing brokers, but NAR also has members who are appraisers, property managers, counselors and other professionals in the real estate industry.
NAR has over 1400 local chapters across different states where you could join and connect with like-minded real estate professionals. Their mission statement is simple and clear, which is to help their members become more successful and profitable.
In addition to providing tremendous value-added benefits, NAR also advocates on behalf of their members and homeowners. They would voice out their thoughts, concerns, and rights to the federal, state, and local policymakers.
More Stringent Standard of Professional Practice
Once you become a Realtor, you will subscribe to NAR’s Code of Ethics & Standards of Practice.
These requirements may be stricter than those mandated by laws. (But of course, if in any instance of law conflict, the obligations of the law always take precedence.)
Your commitment to exercise this Code of Ethics & Standards could demonstrate to your clients that you are running your real estate practice with integrity and putting their best interest as an utmost priority.
There are 17 articles in the NAR’s Code of Ethics and Standards of Practice. The first 9 describes your duties to clients and customers, 10-14 to the public, and 15-17 to the Realtors.
If you want to become a Realtor, here are the things you need to keep in mind:
- When you are representing a buyer, seller, landlord, tenant, or other client as an agent, you should pledge yourself to protect and promote the interests of the client. Keep in mind you are also required to treat all parties honestly.
- You must avoid exaggeration, misrepresentation, or concealment of pertinent facts about the property or the transaction.
- You should cooperate with other brokers, but only given when it is in the client’s best interest.
- If the real estate transaction involves any of your immediate family members or you are the actual seller or purchaser of the property, you need to properly disclose the relationship or ownership interest in writing.
- You shall not provide professional services concerning a property or its value if there could be a present or contemplated interest unless you disclosed them to all affected parties.
- You cannot accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent.
- For example, if you are recommending products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), and you are receiving financial benefits (i.e.: referral fees), then you need to disclose this to your client.
- In a transaction, you cannot accept compensation from more than one party without obtaining the informed consent of all parties.
- The clients’ monies must be kept separately from your own funds.
- You need to make sure the documents are written in an easy-to-understand manner. This allows all parties to clearly understand the specific terms, conditions, obligations and commitments involve. Everyone should get a copy of what they signed.
- You must not discriminate any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.
- The services which you provide to clients and customers shall conform to the standards of practice and competence.You shall not provide any specialized professional services that you are unqualified for.
- You must be honest and truthful in your advertising, marketing, and other representations.
- You cannot engage in activities that constitute the unauthorized practice of law.
- If there is a complain against you with unethical practice, you shall cooperate and provide evidence for the purpose of investigation.
- You shall not make false or misleading statements about other real estate professionals, their businesses, or their business practices.
- You may not solicit another Realtor’s client.
- When there is any dispute between other REALTOR in different firms, you shall mediate the dispute if the Board requires its members to mediate. If the dispute is not resolved through mediation, or if mediation is not required, you shall submit the dispute to arbitration in accordance with the policies of their Board rather than litigate the matter.
To make it easier to read, the above is a simplified version that we rephrased from the NAR’s Code of Ethics and Standards of Practice. However, this is not the exact wording, and the actual Code contains more terms and conditions.
For more info, here’s their Code of Ethics online training. (Disclosure: affiliate link)
Code of Ethics Training Requirement
To ensure you understand the up-to-date Code of Ethics, it is mandatory that you complete the training of not less than 2.5 hours of instructional time within a two-year cycle.
Will the Code of Ethics Change?
Absolutely. Since the real state industry is dynamic, the Code of Standards will be amended to adopt the changes. The above articles are effective as of Jan 1st, 2019.
Realtors Membership Benefits
When you become a Realtor of NAR, there is a wide range of benefits available to you.
Market Yourself as a Realtor
You can use their trademarked logos on in your marketing materials, who otherwise would not be allowed for non-members.
This can distinguish yourself from other real estate agents as you commit to holding a higher standard of practice.
Connect with Other Real Estate Professionals
NAR has local associations all across the country. There will be conference meetings and trade expos every now and then.
By participating in these events, you’ll have the chance of building a connection with like-minded professionals. As you are starting your real estate career, you could be learning a lot of industry news, updates and practical business skills from other Realtors.
This could also be an excellent opportunity to establish your referral network as you’ll have the chance to meet with appraisers, home inspectors and others in the real estate industry.
Access to NAR Products and Services
You can get access to their CE approved courses, research & statistics reports, designation & certificate programs, and the Realtor University school.
Although you still need to pay for each product or service, you can enjoy the exclusive member discounts.
Here’s a link to check out their products and courses. Sometimes, there are free webinars available.
Savings on Business Tools
Furthermore, NAR is partnering with many reputable companies so that you could enjoy significant savings for them. For example, you could get huge discount on tax software, laptop, tablets, marketing services, and other business-related tools.
How to Become a Realtor?
Not everyone could join the association.
First, if you have filed for filed for bankruptcy before, or if a bankruptcy case is currently pending, then you will not be admitted to becoming a NAR member.
Furthermore, your records must be clear of sanctions for professional misconduct.
Next, there must be a principal in your real estate firm who is also a NAR member.
So who are the principals?
They could be sole proprietors; partners in a partnership; corporate officers or majority shareholders of a corporation; or branch office managers acting on behalf of the principal.
Once the principal joins the association, then all the agents, brokers or other real estate professionals in your company will have the option to choose whether to join or not.
If you decide to do so, you would need to join a local association of Realtors.
How much is the NAR membership fee?
As of 2019, the National Dues per member is $150. It is billed on every Jan 1st. However, if you join another month, then it would be pro-rated monthly.
In addition, there is a $35 fee for Special Assessment. This is an advertising campaign to help the public aware of the benefits of hiring a REALTOR. But this assessment is not pro-rated.
The Bottom Line
Although real estate agents are licensed to work with their clients on real property transactions, they are not all Realtors. To use the title “Realtor”, you need to join the National Association of Realtors.
Not only you could distinguish yourself from other non-member real estate agents, but you can also get access to a wide range of member benefits.
Most importantly, you get to interact with other real estate professionals who are committed to contributing positively to the industry.
Of course, we are not suggesting non-member real estate agents necessarily have a lower standard of practice. However, the like-minded colleagues within the NAR can help one and another to keep accountable.
If you are serious in building your real estate career, we believe becoming a NAR member would be a good investment.
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Disclaimer: The information in this post is for general information only, and not intend to provide any advice. They are subjected to change any notice, and not guaranteed to be error-free. For full and exact details, please contact the National Association of Realtors or the regulatory commission in your state.
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