Realtor Vs. Real Estate Agent: Know the Differences
Thinking about getting or selling a property? You might team up with a real estate agent, broker, or realtor. Even though they’re all licensed to help with buying, selling, or renting, each one has their own qualifications and level in the job.
Many people confused about the difference between real estate agents vs. Realtors. You’re not the only one! Let’s clear up the confusion and make it simple to understand.
Share this friendly guide with your clients to make understanding the difference between realtor vs. real estate agent.
Key Difference Between Realtor Vs. Real Estate Agent
The main difference that sets a real estate agent different from a realtor is the certifications they have. You might have heard these words used together and wondered what makes them different. In simple terms, even though they do similar work, they have to meet different standards set by the National Association of Realtors. To really get the idea of ‘Realtor vs. agent,’ let’s first look at what a real estate agent does, then check out what a realtor does and what they need to qualify.
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Who are Real Estate Agents?
Real estate agents are like friendly helpers with a special license. They assist people in buying, selling, and renting commercial or residential property. Their main job is to bring together folks who want to buy or sell property. When they successfully help in selling a property, they get a payment called a commission, which is a small part of the house’s selling price. Some people also call them real estate associates or salespeople.
Real estate agents can work with residential as well as commercial properties depending on what they’re good at. They might focus on selling or finding property for people to buy. Some also specialize in helping with rentals.
Becoming a real estate agent is like passing a special state examination test after learning about the needed coursework. The rules can be a bit different in each state, but usually, agents study for 30 to 90 hours. They need to know about the laws for local, state, and national real estate. After they pass the test, some states ask them to keep learning and renew their license every one to two years. It’s like staying updated on how things work in the world of real estate!
Work of Real Estate Agents
Real estate agents help people who want to buy or sell properties, and also those who want to rent or lease. They talk between the people involved, passing on their offers and questions. When a deal is agreed upon, they team up with another agent to help with all the paperwork. They make sure their clients know everything they need to do, like home inspections and moving, and remind them about important dates, like when everything will be finalized. They’re like friendly guides through the whole process!
Agents who work with people selling their properties are called listing agents. They do lots of helpful things like figuring out the right price for the home, suggesting ways to make it more valuable and appealing to buyers, and showing it off on websites and other places. They also talk about prices with buyers, take care of paperwork, and make sure everything gets submitted and filed correctly. They’re like the superheroes of selling houses!
How Does Real Estate Agents Generate Income?
Real estate agents make money by getting a payment each time they help someone buy or sell a property. This payment is called a commission, and it’s usually about four to six percent of the property selling price. Let’s imagine a house sells for $350,000 with a six percent commission. The agents and their bosses (called brokers) would each get about 1.5 percent of that money, adding up to around $5,250. Both the agent helping the seller and the one helping the buyer get a share. Agents often work with different clients at the same time to make sure they have a steady income from these commissions.
What is a Realtor?
A Realtor is a special kind of real estate agent who is part of a big group called the National Association of Realtors (NAR). This group started way back in 1908 and is the biggest one for this job in the United States. If a real estate agent wants to join, they need to have a valid license and a really good professional record. Being part of this group is great for agents because it has a good reputation, which can bring in more clients.
All Realtors have to follow a set of rules called a Code of Ethics. It’s like a promise to do things the right way. This means people can feel confident that they are working with agents who have been checked out and have promised to keep high standards in their work. It’s like having a trustworthy friend in the world of buying and selling properties.
Around half of all real estate agents in the United States are called Realtors, according to the NAR. Many agents like to be Realtors because this group really looks out for them. The NAR is like a big team that can talk with the government and make sure Realtors get good legal protections and benefits. Even though it’s not a must for agents to become a realtor, some choose to because it helps them out in the long run. It’s like being part of a helpful club.
NAR Code of Ethics
The National Association of Realtors (NAR) made the Code of Ethics as a set of rules that realtors must follow. These rules are like promises and are checked by real estate boards. The Code says what realtors should do for their clients, the public, and other realtors, and it’s even stricter than the rules set by the state. It’s like a guide to doing the right things in real estate.
The code has 17 main rules, 71 extra guidelines, and 131 explanations. It’s all based on the “Golden Rule,” which means Realtors should treat others how they want to be treated. The code says Realtors have to work together for the good of the people they help and their clients.
It also says Realtors must respect each other’s relationships with clients. If there’s a problem between members, they have to sort it out within their group. The association puts out a new version of the code every January in Realtor Magazine. It’s like a guidebook for doing real estate in a fair and friendly way.
How do Realtor Earn Money?
Realtors earn money the same way as other real estate agents – through commission. Usually, the commission is around 6% of the price when a house is sold. But that 6% is shared between the two agents involved, so they each get 3%.
However, each agent has to give some of their 3% to their company and cover other costs. These things can take up almost half of the total commission, leaving the Realtor with about 1.5% of the money.
Remember the example? If a house sells for $300,000, a 1.5% commission would be $4,500. That’s the amount the Realtor would get.
Why Choose a Real Estate Professional?
Whether you’re buying or selling, teaming up with a real estate professional is a smart move. Here’s why:
Experience: Real estate professional’s main role is to knowing everything about the buying and selling process, they will guiding you through the process with ease.
Local Know-How: A real estate professional knows the insights and outsides of the local markets from comparable properties to schools and crime rates. Plus, they can help you set the right price.
Master Negotiators: Real estate professionals are very expert in making a real estate deal. They keep things cool between buyers and sellers, smoothing out the bumps.
Connections: With a network of professionals and past clients, they can offer references and connect you with potential buyers or sellers. Your real estate journey just got a whole lot easier.
Frequently Asked Question (FAQs)
What’s the difference between a realtor and a real estate agent Canada?
In Canada, a real estate agent and a Realtor both help with property transactions. However, a Realtor is a member of the Canadian Real Estate Association (CREA) and adheres to a higher code of ethics, while a real estate agent may not be a CREA member.
How Do You Ask Someone to Be Your Real Estate Agent?
Express your interest by saying, ‘I’ve been impressed with your expertise. Would you consider being my real estate agent?’ Clear, straightforward, and respectful, it opens the door for a positive response.
Can You Negotiate a Real Estate Agent Commission?
Yes, you can negotiate a real estate agent’s commission. Discuss expectations, market conditions, and services to find a mutually agreeable rate. Many agents are open to adjusting their fees for a successful partnership.
Do I need to hire a Realtor specifically, or can I work with a Real Estate Agent?
It depends on your preference. Both can assist in property transactions, but a Realtor may offer additional ethical standards and professional advantages.
How do I verify if someone is a licensed Realtor or Real Estate Agent?
Check with your local real estate licensing board to verify an individual’s credentials. For a Realtor, you can also confirm membership with the National Association of Realtors.
Are there cost differences between hiring a Realtor or a Real Estate Agent?
Commission rates vary, and both Realtors and Real Estate Agents can negotiate fees. It’s essential to discuss costs upfront and reach a mutually agreeable arrangement.
