What's the Difference Between a Real Estate Agent, Realtor and Broker?
How to decipher a real estate pro's title – and decide whether it makes a difference when hiring one.
Knowing the different qualifications real estate pros have should help you find the best one for you.(Getty Images)
The process of choosing a real estate agent should be a careful one. You want to work with a professional who will not only act in your best interest, but will also effectively guide you every step of the way so you feel confident about your home sale or purchase.
But when you’re browsing for potential agents, how do you decipher the differences between a licensed agent, a Realtor and a broker? Does one guarantee you an unmatched level of service, and should you take the title into account when deciding who to work with?
If you have trouble understanding the differences between an agent, Realtor or broker, don’t worry – you’re not alone.
“Everybody calls us all brokers,” says Allen Brewington, a licensed associate broker with Triplemint, a full-service real estate firm in New York City.
To help you tell them apart, we’ve broken down the types of licensed real estate professionals based on their role and experience, as well as other factors to consider as you vet potential representatives.
Read:Your Guide to the Housing Market. ]
Real Estate Agent, Sales Associate or Salesperson
Every person who is licensed to represent buyers and sellers in a real estate transaction is a real estate agent – or a licensed real estate sales associate or salesperson, as it’s more commonly known in some parts of the U.S.
The license is required to legally work on behalf of buyers and sellers in real estate transactions. It is issued by the state the agent works in, with variations on a minimum number of instructional hours, and a test is required to receive certification.
Most states additionally require a background check and fingerprinting, as Wyoming does, according to B.J. Jibben, licensing specialist for the Wyoming Real Estate Commission.
Many real estate agents practice successfully without ever seeking certification beyond the required state license. While a salesperson could have decades of experience and simply not wish to pursue a different title, she still carries the same title as another agent who just received his license. But in an industry where success is often based on reputation, the professional’s title doesn’t always carry much weight.
Real estate agents can choose to pursue a higher level of licensing after working in the industry professionally. In Wyoming, for example, a licensed salesperson must be actively engaged in real estate deals for at least two of the last four years, take additional education courses and submit fingerprints for another background check, among other requirements, to become a broker associate, Jibben says.
In terms of the role a broker associate plays in a deal, there's not much of a difference compared to a salesperson. But the impact, professionally, can be significant. "We get the broker's license because we want people to know we have the extra training," Brewington says.
While the average consumer or client may not fully grasp the difference in experience or training, Brewington says that the designation takes peer-to-peer interaction to another level. In a city like New York where new agents are always entering the real estate field, the associate broker designation ensures Brewington is never mistaken for a novice in the industry.
Many states offer an additional level of licensing: broker. In this role, occasionally specified as a principal broker or responsible broker, the individual is the head of a real estate firm, and fellow real estate agents work or him or her.
Depending on the state, however, the role of the broker could be different. Oregon has a simplified licensing structure in which the entry-level real estate licensee is known as a broker. Then with the additional education, exam and three years of experience, a broker "can move up to a principal broker," says Mesheal Heyman, communications coordinator for the Oregon Real Estate Agency, the state organization that handles licensing, education and investigation in the real estate profession.
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Any agent or broker who is a member of the National Association of Realtors can be identified as a Realtor – and that accounts for a lot of professionals, as the NAR is the largest trade association in the U.S., with more than 1.3 million members as of February.
The biggest distinction between an NAR member and an unaffiliated agent is that Realtors agree to follow a set of ethics guidelines aimed at ensuring the integrity of the agent and protecting clients.
The NAR’s code addresses a Realtor’s duties to clients and customers, the public and fellow Realtors, and some expectations include the accurate portrayal of market value to a client and refraining from lying about fellow real estate professionals. Violation of the code or standards could lead to the individual’s removal from the association.
While this code of ethics holds NAR members to a higher standard, in most cases a real estate agent can only lose his or her real estate license when convicted of a crime that prompts action from the state. Jibben says the Wyoming Real Estate Commission investigates every verified complaint filed about a licensed salesperson or broker, but the commission will also recommend complaints of a strictly ethical nature to such a trade association.
"If that real estate agent is also a Realtor, we would tell the complainant to also file a complaint with the local (Realtor) board as well," Jibben says.
In a real estate purchase, the agent representing the buyer, regardless of whether he is a licensed agent, associate broker or otherwise, is known as the buyer's agent.
While many agents represent both buyers and sellers, depending on the deal, others may choose to only represent buyers. When this is the case, the designation as exclusive buyer's agent may be applied.
On the opposite end of a deal from the buyer's agent, the professional representing the seller is typically known as the listing agent because the agreement signed with the seller to market the property for sale is known as a listing.
Leasing Agent or Landlord's Agent
Working with a professional to lease an apartment or rental home also means you'll be working with a licensed agent.
Many renters throughout the U.S. are used to inquiring with an apartment community's leasing office on their own. The leasing agents who work for the landlord or property management company are licensed to be able to facilitate the lease deal.
At times you may find you need the assistance of a professional when searching for available rentals, in which case you can enlist the help of a tenant's agent. A tenant's agent is is licensed and may be a sales agent, associate broker or broker. While some agents choose to partake in lease deals exclusively, many also take part in real estate sales and purchases.
What Type of Agent Should You Use?
A few years of experience or adherence to a specific code may make you feel more comfortable hiring one person over another, but as with any industry, there are subpar professionals at every level of real estate brokerage. It’s important to carefully vet candidates with questions specific to your needs as a homebuyer or seller.
It's natural to want to work with an experienced professional, though the title doesn't necessarily convey an individual agent's level of success. "I know plenty of people who do not have a broker's license that do tens of millions of dollars in business," Brewington says.
To narrow your search another way, the NAR and other real estate organizations offer additional training for real estate agents to specialize in particular types of deals or clients. For example, Realtors can receive the Military Relocation Professional or Certified Buyer Representative designations after taking courses relevant to a specific industry niche. The National Association of Senior Move Managers is a separate organization that licensed agents at any level may choose to train in that specialize in downsizing and moving senior clients.
Whatever your particular situation may entail – whether you’re a first-time homebuyer who wants additional guidance or you’re looking to purchase a vacation home – you can typically find a certification that makes you feel more confident when you begin your search for a real estate agent.