Planning to buy or sell a home?
There's a good chance you'll work with a real estate agent, broker, or Realtor. Though all of these real estate pros are licensed to help you buy, sell, or rent a home, they are distinct from one another, especially when it comes to their qualifications and which rung of the professional ladder they occupy. Here's how to differentiate them from each other.
Real Estate Agents
Real estate agents are individuals who are licensed to help people buy, sell, and rent real estate. They are ultimately responsible for bringing buyers and sellers together and are paid a commission—usually a percentage of the property's sale price. Real estate agents are also called real estate associates and real estate salespeople.
Agents who represent sellers are called listing agents.
A seller's agent lists and markets a property for sale. They may stage the property, host open houses, or feature the home online.
Agents who represent buyers are known as buyer's agents.
A buyer's agent assists a potential homebuyer in their housing search. They will typically be able to gain access to properties for sale via other agencies, as well as their own.
Agents can act as both listing and buyer's agents (known as dual agency), though typically not for the same transaction because that can create a conflict of interest. When a house is sold, the commission paid by the seller is usually split equally between the buyer's and seller's agents (with their cuts potentially split with their respective agencies).
Real Estate Brokers
A real estate broker is a real estate agent who continues their education and successfully receives a state real estate broker license. Unlike real estate agents, brokers can work independently and start their own brokerage and hire other real estate agents.
Real estate brokers do many of the same things that agents do. Brokers who work with buyers normally look for properties that match the criteria set forth by their clients, conduct negotiations, prepare offers, and help the buyers with any other issues leading up to the closing date. Seller's brokers, on the other hand, determine the market values of their clients' properties, list and show properties, communicate with sellers about offers, and assist in the offer process.
There are three main tiers of real estate brokers, with varying degrees of responsibility:
1. Associate brokers have broker licenses but choose to work under another broker. In general, associate brokers do not supervise other agents.
2. Managing brokers oversee transactions and daily operations in the office. They also hire agents, train new hires, and manage administrative staff.
3. Principal/designated brokers supervise real estate agents to make sure they are in compliance with state and national real estate laws. Each real estate office has one designated broker.
A Realtor is a real estate professional who is a member of the National Association of Realtors (NAR), the largest trade association in the U.S. Although the term "Realtor" is commonly confused with that of "real estate agent," the designation is open to a variety of professions within the real estate industry, including:
• Residential and commercial real estate brokers
• Property managers
Anyone who wants to become a Realtor must meet four requirements:
1. Have a valid and active real estate license
2. Be actively engaged in the real estate business
3. Not have a record of official sanctions involving unprofessional conduct
4. Not have filed for any recent or pending bankruptcy
Next, the person needs to join one of the National Association of Realtors' local real estate associations, pay a one-time application fee, and pay annual membership dues to maintain their Realtor status. All Realtors must adhere to the National Association of Realtors' strict Code of Ethics.
So the question now arises, "Is it Better to Hire an Agent, a Broker or a Realtor?"
Often, the distinction will not matter much for the buyer or seller of a home. Though an independent broker may have access to more properties listed by various agencies and may also be able to provide a little bit of wiggle room with their fees because they don't have to share a cut with an agency; However a Realtor is a real estate professional (a real estate agent or a broker) that has no bad record and is bound by the National Association of Realtors Strict Code of Ethics.
By choosing a Realtor from The Lovato Group, we ensure you that you have someone who is transparent and honest and will surely uphold your best interests in all transactions.