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Tuesday, November 5, 2013

How Realtor services differ from real estate agents'

By Dave Landry Jr.

The term Realtor and real estate agent are almost synonymous, but in all actuality they are two different things. When it comes down to it, both serve the function of selling a house. But what are the differences between a realtor and a real estate agent? How does a realtor service differ from a real estate agency? 

These questions are important for those that are looking for options into selling or buying a house. By looking into the specific services that both provide and the different tools they use, one can formulate an idea on why someone would rely on one over the other, or if using both is ever an option.

What is a Realtor and how does it differ from a real estate agent?

Realtors have more ethical requirements than real estate agents
Image Courtesy of pixabay.com

When it comes down to it, all real estate agents are not realtors but all realtors are real estate agents. To put it lightly, that may sound confusing but at the core anyone who is designated a realtor is a real estate agent.

Real estate agents are people who have passed an exam through the state and have received a license to practice real estate sales for that given state. Each agent must have this license to engage in transactions of any real estate nature, which means that realtors have also passed the exam and attained their license.

To obtain the license, most states require a minimum of 30-90 hours of instruction in real estate fundamentals from a college, technical school, or a university. After the person has completeted real estate school, they need to pass an exam covering standards and practices, state real estate laws, and national real estate laws. An agent needs to pay an annual fee for their license, which is renewed every one or two years, with some states requiring a continuing education in order to renew said license.

After completing an education and obtaining the license, a person becomes a real estate agent, which allows them to sell real estate.

For more about the various differences and definitions pertaining to jobs in the real estate industry, check out SamDebord’s list on zillow.

So what’s the difference between a real estate agent and a Realtor?

The National Association of Realtors endorse and guide Realtors
Image Courtesy of Pixabay.com

Realtors are real estate agents that have become members of the National Association of Realtors. Unlike other associations, when to become a member is solely based on paying dues, the NAR is a group that is composed of members of all aspects of the real estate agency. Realtors belong to one or more of 1,700 associations/boards and can join 54 state and territory associations. DaveRoo’s article from HowStuffWorks provides more information about the types of boards and associations realtors can join.

To become a Realtor, one must first join a local real estate board, which then extends into the possibility of membership into the national organization. To qualify, a real estate agent must adhere to a strict code of ethics and standards of practice. New members must take an online course and pass an exam, with current members required to retake the ethics exam every four years. Membership in the board requires an annual fee that covers dues for the NAR and state-level associations.

Besides being a member of this group, realtors can be active in appraisal and international realty sections, and attend meetings about the state of the real estate business. This is important in times of economic crisis, everyday people can turn to a group like National’s Debt Consolidation team, a service proven to help in time of financial need.

At the core, what is the difference between a realtor and a real estate agent?

Both are agents and are allowed to sell houses. The benefit of using a Realtor is that they are a part of the national organization which adheres to a strict code of ethics. The ethical code is what separates a Realtor from a real estate agent.

This is the code of ethics from NAR’swebsite:

  1. Pledge to put the interests of buyers and sellers ahead of their own and to treat all parties honestly.
  2. Shall refrain from exaggerating, misrepresenting or concealing material facts; and is obligated to investigate and disclose when situations reasonably warrant.
  3. Shall cooperate with other brokers / agents when it is in the best interests of the client to do so.
  4. Have a duty to disclose if they represent family members who own or are about to buy real estate, or if they themselves are a principal in a real estate transaction, that they are licensed to sell real estate.
  5. Shall not provide professional services in a transaction where the agent has a present or contemplated interest without disclosing that interest.
  6. Shall not collect any commissions without the seller's knowledge nor accept fees from a third-party without the seller's express consent.
  7. Shall refuse fees from more than one party without all parties' informed consent.
  8. Shall not co-mingle client funds with their own.
  9. Shall attempt to ensure that all written documents are easy to understand and will give everybody a copy of what they sign.
  10. Shall not discriminate in any fashion for any reason on the basis of race, color, religion, sex, handicap, familial status, or national origin.
  11. Expects agents to be competent, to conform to standards of practice and to refuse to provide services for which they are unqualified.
  12. Must engage in truth in advertising.
  13. Shall not practice law unless they are a lawyer.
  14. Shall cooperate if charges are brought against them and present all evidence requested.
  15. Agree not to bad mouth competition and agree not to file unfounded ethics complaints.
  16. Shall not solicit another REALTOR'S client nor interfere in a contractual relationship.
  17. Shall submit to arbitration to settle matters and not seek legal remedies in the judicial system.

By choosing a Realtor, you are getting a real estate agent that follows this ethical code of business practices, but at the core both a realtor and a real estate agent both provide the same service to people.

About the author: Dave Landry Jr. is a personal finance expert and small business owner who enjoys blogging on anything relating to those fields as well as economics, politics and real estate. He hopes you enjoy this article and now understand the difference between Realtors and Real Estate agents, allowing you to select the service that best suits you!