If you’re considering buying or selling a home, unless you are doing a For-Sale-By-Owner, you will most likely want someone to help you through the real estate transaction process. But, who should you turn to? A real estate agent or a realtor?
Are all licensed real estate agents realtors?
In order to earn a real estate license in any given state, a person must complete the required number of educational hours and pass the state licensing exam. E&O coverage (errors and omissions insurance) is required and in addition, continuing education is required on an annual basis. However, while the terms realtor and real estate agent are often used interchangeably, there is actually a difference between them. Not all agents are realtors. “Realtor” is a trademarked term used to refer to a real estate agent who is an active member of the National Association of Realtors (NAR), the largest trade association in the United States. So to make it super simple, the difference between a realtor and real estate agent is simply being a member of the National Association of Realtors.
Should I care if my agent is a member of NAR?
Let’s start with the basics. What is the purpose of a trade association, like NAR? Once you understand the purpose, you’ll be able to decide whether a real estate agent’s status as a Realtor is important to your transaction.
The purpose of a trade association is to bring together members of an industry to develop policies that benefit the industry, to ensure the industry is promoted in a positive light and to lobby the government on behalf of the industry through political action committees like RPAC, the REALTORS(r) Political Action Committee. In fact, 42 cents of every dollar spent on NAR dues goes to lobbying efforts, and NAR is the largest direct financial contributor to federal political candidates.
Some consumers do benefit from the work of trade associations, but it is important to know that the purpose of any trade association’s activities (NAR included) is the machination of positive industry PR, the squelching of negative coverage of the industry, and powerful lobbying action toward achieving political movement in favor of the industry and those working within it.
Requirements for membership of NAR
To join NAR, you need to join your local real estate association or board. Real estate associations are often organized by county or region. You can look up your local board by searching the NAR website. Once you’ve joined and are a member of your local association or board, you’re automatically extended membership into the national organization.
After this, new NAR members must take an online course on the ethics code and pass the test. And then after that, ongoing members are required to take an online ethics refresher course every four years. Membership on a local real estate board or association also requires an annual fee that covers membership dues for the NAR.
By passing the ethics code test, you must agree to adhere to NAR’s ethics code and standards of practice. And while this code is changed yearly to follow along with the latest issues in real estate practice law, it has a core message at its center and that is to “treat all parties honestly.”
For example, when representing a buyer, seller, or other client, a realtor pledges themselves to protect and promote the interests of their client to be sure, but it does not relieve them of their obligation to always treat all parties honestly, and never mislead or withhold information from anybody involved in the real estate transaction – including the other real estate agent and their clients.
How it separates realtors from real estate agents
And this code is what separates realtors from other non-member, real estate agents. And although these principles are taught in a variety of other real estate situations, courses and programs, only with the NAR is this code of ethics enforced and made abundantly clear to its members.
Of course, this is also the selling point of the realtor for a client, the knowledge that supposedly the realtor is held to a higher standard than the average real estate agent. And also this is why real estate agents participate in this program, because they are aware of the advantage that this affiliation may bring in this regard, since clients may have more of a tendency to want to work with an agent that has sworn to treat them and everybody else fairly.
Then what is a real estate broker?
A real estate broker is a level up from the average real estate agent. And they have educated themselves beyond the agent level as required by whatever state they are in in order to pass a broker’s license exam.
Similarly to real estate agent exams, each state sets its own broker education and exam requirements. The extra studying often covers topics such as ethics, contracts, taxes, and insurance. These topics also include real estate legal issues, operating a brokerage, real estate investments, construction, and even property management.
To qualify to take the broker’s exam, real estate agents must have at least three years of experience already as a real estate agent.
Why you should work with a real estate professional
Regardless of whether you hire a real estate agent, a real estate broker, or a realtor, finding the right agent with a proven track record is the most important thing of all to help you navigate the sometimes tricky waters of your real estate transaction. And while agents may have many different levels of qualification via testing and codes of ethics, there is no real substitute for actual experience. You always want somebody that is most familiar with your circumstances, with your neighborhood, with your market and so on in order to help you get the best possible results in your real estate transaction.
If you’re looking for a top agent in Arizona, Colorado, North Carolina, or Washington state, do your homework and find someone that does more than a few deals per year. Look for experts who can help you. When you hire Trelora you’ll get best-in-class customer service, and a team of expert agents who close hundreds of deals per year.