You’ve probably heard of the titles “real estate agent,” “broker,” or “REALTOR®.” Aren’t they all just different words meaning the same thing? Actually, no. While each of these titles pertain to professionals in the real estate industry, there are subtle differences between them that you might be interested in understanding before you hire one to represent you in a purchase or sale.
Real Estate Brokers
Real estate agents who wish to open up their own brokerage to work by themselves or have other associates work for them must become brokers. This is the main difference between a broker and an agent. While a broker may run his or her own business, an agent must work for a broker.
Usually, this means obtaining additional education and licensing in order to achieve the title of broker. In California, there are a few ways to get a broker’s license. Those who have a four-year degree can complete eight real estate courses, after which the broker’s real estate exam needs to be taken and passed. Those without a four-year degree will still need to take the eight college-level courses, as well as clock in two years of real estate sales experience. Additionally, lawyers can skip the college courses and go straight to the broker’s exam.
There is also the title of “real estate associate broker” who is essentially still at an agent level but is working towards obtaining a broker’s license. Associate brokers still have to work under a broker, but can share the profits of the brokerage in addition to agent commissions.
Real Estate Agents
Agents can call themselves “agents,” “salespersons,” or “consultants,” all of which essentially mean the same thing. However, they cannot call themselves “brokers.” Real estate agents cannot work for themselves, and instead need to work under a broker who is responsible for the actions of their real estate agents.
In order to become a salesperson in the state of California, applicants must be at least 18 years old and have successfully completed three college-level real estate courses.
Real estate agents and REALTORS® are often used interchangeably. The only difference between the two is that “REALTOR®” is simply a title given to real estate professionals who become members of the National Association of REALTORS® (NAR). In order to maintain membership, REALTORS® must pay annual fees and abide by the entity’s Code of Ethics. Not all real estate agents are members of the NAR, and therefore do not have the title of “ REALTOR®.”
Listing and Buyer’s Agents
Any one of the above three professionals can act as the listing or buyer’s agent. Listing agents represent the seller, and are also referred to as “seller’s agents.” Buyer’s agents, on the other hand, represent the buyers, and are often known as “selling agents” (which is not the same as a “seller’s agent”).
These real estate professionals have something in common in that they all owe their clients a fiduciary responsibility to protect their best interests in a real estate transaction. Some real estate professionals work with both buyers and sellers (though not in the same transaction, which would then be known as “dual agency”), while others work exclusively with one or the other.
The Bottom Line
While there are some differences between these titles, all of these professionals are licensed to represent you when buying or selling real estate, regardless of what side of the deal you happen to be on. The most important aspect for you to be concerned with is that the professional you choose to work with is not only properly educated and licensed, but acts in good faith to protect your best interests in a real estate transaction.