Real Estate Agent, Broker, Realtor or Commercial Broker – what do they all mean and who are you looking for?
These are all titles of real estate professionals. The general public tends to often use them interchangeably. They indicate differences in education, professional affiliation, and specialty. The requirements for each will also be different from state to state. Let’s break them down so the next time you’re looking for a real estate professional you’ll have a better understanding of what they bring to the party.
Real Estate Agent: A real estate agent is an individual who is licensed to negotiate and arrange real estate sales. An agent is a person who can represent a buyer or a seller in a real estate transaction, in exchange for a commission. Their tasks include but are not limited to: showing property, listing property for sale, negotiating contracts and marketing properties. Agents are generally licensed but must operate under the supervision of a real estate broker.
Real Estate Broker: A licensed professional that is permitted to manage all legal intricacies of real estate transactions, both the buying and selling. Brokers also can hire agents to work for them while they manage the whole process. To be a broker one has to pass a longer more intense exam and have either: several years of experience – depending on the state’s requirements or have a bachelor’s degree. In most states more course work is required as well. As a broker you are also required to complete continuing education courses to keep your license. There are benefits to being a broker, such as taking a leadership role, managing a team, being the exclusive recipient of commissions, and earning commissions from the agents that work under you, just to name a few. A broker also has a higher level of exposure to liability.
Realtor: A Realtor can be a Broker or an Agent. Of all the real estate professionals all over the world, only about 1 million are members of the NAR – National Association of Realtors and can use the designation of REALTOR. According to the NAR: “The term ‘REALTOR’ is a registered collective membership mark that identifies a real estate professional who is a member of the NAR and abides by its strict Code of Ethics.”
This code of ethics is what entices many customers to seek out a licensed REALTOR. This code is a pledge to protect and promote the interests of their clients. They pledge to avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or transaction; they must follow certain standards in order to keep their membership.
The question really comes down to, “Who do you trust with your time and money?” It is always wise to deal with agents who have extended credentials, such as being a REALTOR. These are professionals who are bound to a specific set of standards and pay to be part of this elite organization.
Commercial Broker: When talking about real estate agents, brokers and those that are REALTORS we are focusing on the residential side of real estate (one to four units). If you are looking to buy an apartment building, retail space or office building, you would look to hire a commercial broker. In many states to be a commercial broker requires additional education and perhaps a different license. The biggest difference in a commercial broker is the knowledge base and expertise. Knowledge of commercial real estate law, finance, contracts, leases, agency law, property management and development are necessary.
As with any profession there are those who rise to the top of their industry and those who just go through the motions. Real Estate is a service industry. If these professionals want to grow their businesses, it will be by referrals. So the real estate professional who treats you as a client and not just as a deal is the one you’re looking for.
Looking forward to meeting many of you online or in the classroom.