Agents, Brokers, and REALTORS®: What’s the Difference?
is a catchall
phrase that is used, in casual conversation, to describe the three types of
professionals who buy and sell real estate:
agents, brokers, and REALTORS®. No, they’re not really the same. Yes, you should care about what makes them different.
Here’s a breakdown:
A real estate agent is a licensed professional who helps people buy, sell, rent, or invest in homes. To become an agent, a person must take pre-licensing training from a certified institution (these vary from state to state) and pass their state’s real estate licensing exam. Once they have their license, an agent must affiliate themselves with a real estate brokerage.
Some agents specialize in representing buyers, some specialize in representing sellers. Some do both.
An agent who represents both the buyer and the seller in the same real estate transaction is called a dual agent. By law, a dual agent must disclose dual agency to both parties. (If an agent is seeing other people, you obviously need to know.)
A real estate broker is a professional who has additional education beyond the agent level, as required by state law, and who has passed a broker’s exam. In some cases, brokers also have more years of experience than agents. The biggest difference between a broker and an agent is that a broker may work independently. An agent must be overseen by a broker.
A REALTOR® is a broker or agent who belongs to the National Association of REALTORS® (NAR), the largest trade group in the country. (Full disclosure: NAR publishes HouseLogic.com). A REALTOR® commits to following a strict Code of Ethics intended to protect buyers and sellers; for example, REALTORS® pledge themselves to protect and promote the interests of their client. Agents and brokers who are not NAR members can’t call themselves REALTORS®. There are more than 1 million REALTORS® in the United States. You can use realtor.com®’s Find a REALTOR® tool to connect with one in your area.
In most cases, using an agent, broker, or REALTOR® won’t cost you a penny because the seller typically pays both the listing agent and buyer’s agent’s commissions. However, some buyers’ agents request a representation fee from the buyer. That’s rare.
The Best Agent for You Depends on … You
Before you seriously partner with anyone, you’ll probably survey family, friends, and trusted acquaintances for at least some input. Finding a real estate agent is no different: A great starting point is to ask your inner circle and neighbors for recommendations. According to recent NAR research, 52% of buyers 36 and younger found their real estate agent through a referral.
Then there’s the internet.
Each of the major property listing websites — realtor.com®, Zillow, Redfin, and Trulia — has an agent-finder tool that lets you search for agents in your area. These property sites also collect reviews and ratings from an agent’s past clients, which gives you insight into an agent’s reputation. Keep in mind, though, that the sites vary in their policies about whether agents can edit or remove reviews. (Like with Yelp, use your own discretion.)
The sites also show an agent’s sales history, so you can see how many homes a person has sold. In general, it’s best to choose an agent who has a large number of sales under his or her belt (a sign they’re committed to real estate work). Perhaps even more important: an agent who has sold homes at the price point and in the neighborhood where you’re looking to buy — a sign they understand the local market.
Whatever you do, don’t rely on online listings alone. Always interview prospective agents — at least three — in person. A meet-and-greet will give you the perspective you need on the agent’s personality and style. Is this someone you’ll like working with? Who has a sense of humor? Who has your back? Who communicates in the ways you want to be communicated with? Best to find out in person.
How to Know If An Agent Is Knowledgeable
Once you’ve gathered all the information, listen to your gut: It won’t steer you wrong about who’s the best agent for you.
But, that said, there are a few qualities you’ll want to look for in any agent (your gut would agree):
- Local expertise. Does this person know their stuff about neighborhood home value trends, shops and restaurants, schools, commute times, and geographic factors such as floodplains? These things are important, especially if you’re looking for a home in a new city or town. If the agent seems lost or like they’re winging it, keep looking.
- Responsiveness. You’ll have a lot of questions, and will be asked to produce documents at certain steps during the buying process. Think about how available you want your agent to be, and how quickly you want him or her to
respond. One way to figure that out? Contact a prospective agent online or by phone and see how long it takes them to reply. If you don’t hear back within a timeframe that works for you, it’s probably best to move on.
- Reputation. This is when to consult your inner circle again. The agent-finder tool mentioned above can also help. In addition, you’ll want to verify the agent’s license; search “[state] real estate license lookup” in your browser to find a resource for your state. If you want to confirm whether an agent is a REALTOR®, you can call NAR at 1-800-874-6500.
There are a number of
professional designations that indicate an agent has obtained additional
education beyond their licensing work. An accredited buyer’s representative
(ABR®), for instance, is someone who specializes in working with home buyers
and has taken a course on buyer-client relationships.