Are the terms “real estate agent” and “Realtor” interchangeable? Those inside the industry know that’s not the case, but they also know that it seems to be a bit of an industry secret – many consumers have no idea what the difference is between a realtor and a realtor, or if there is even one.
Here’s a guide you can share with clients to help you explain how this realtor vs. realtor thing works.
What is the difference between a real estate agent and a real estate agent?
A real estate agent is someone licensed to help people buy and sell commercial or residential property. A realtor is a branded term that refers to a real estate agent who is an active member of the National Association of Realtors (NAR), the largest trade association in the United States.
Why do people use the terms interchangeably if they mean different things?
Because using the term “real estate agent” can be a bit clunky and wordy, those who may not be familiar with the differences between the two designations often use the term “real estate agent” as shorthand for anyone who is in the business of helping people buy and sell real estate.
But they are different, aren’t they?
Yes. Although both real estate agents and real estate agents are licensed to sell real estate, each title refers to a specific type of real estate professional, and there are notable distinctions between the two.
A real estate agent is someone licensed to help people buy and sell commercial or residential property. The agent can do this as a sales professional, an associate broker or a broker.
How do you become a real estate agent?
In order to obtain a real estate license, agents must complete a certain minimum number of courses and pass a state-mandated exam. State licensing requirements vary.
According to the Bureau of Labor Statistics, applicants for a real estate license must complete between 30 and 90 hours of classroom instruction at an accredited college, university, or technical school, depending on the state.
Applicants must also pass an exam that covers national, state, and local real estate law, standards, and practices.
All real estate agents must pay an annual license fee and renew it every one or two years, depending on the state. In some states, agents may have to complete a number of continuing education courses before their licenses can be renewed.
What is a real estate agent and why is this title different from real estate agent?
A realtor is a branded term that refers to a real estate agent who is an active member of the National Association of Realtors (NAR), the largest professional association in the United States.
Where does the term “real estate agent” come from?
NAR was founded over a century ago, but has only been using the term “real estate agent” for about 40 years. The association was originally founded in 1908 as the National Association of Real Estate Exchanges and changed its name in 1916 to The National Association of Real Estate Boards.
That same year, Charles N. Chadbourn, a realtor in Minneapolis and vice president of the National Association of Real Estate Boards, proposed the use of the term “realtor” to give members of the association a way to distinguish from non-members.
To protect the title from abuse, the association obtained a copyright and trademark on it in 1950.
The association adopted its current name in 1974.
Have there been any legal challenges regarding the brand name?
There have been – NAR has faced legal challenges arguing that “Realtor” is a generic term and should not be a trademark. However, to date, the United States Patent and Trademark Office (USPTO) has confirmed the registration of the title.
What is a real estate broker?
Realtors are real estate agents who have expanded their resume with additional licensing and education requirements and can hire other real estate agents. Realtors with the proper credentials and licenses must work for management brokers or brokerage firms.
What does it take to become a real estate agent?
Who can join NAR?
Based in Chicago, NAR has more than one million members nationwide – and membership isn’t limited to just real estate agents and brokers. Members can also be property managers, appraisers, real estate consultants and other professionals involved in the real estate industry.
How to join NAR?
Anyone interested in joining NAR must first join one of NAR’s more than 1,400 local real estate associations. Applicants pay a one-time application fee and then pro-rated membership fees after the Board of Directors approves membership.
What are the requirements to join NAR?
NAR requires members to hold a valid real estate license, be actively engaged in the real estate industry, have no history of official sanctions involving unprofessional conduct, and have no recent or impending bankruptcy.
Directors of a real estate company – including sole proprietors, partners in a partnership, corporate officers, majority shareholders of a company or branch managers acting on behalf of the principal – must first join an association of estate agents before any non-principal can join.
If a principal decides not to join the association, none of the people associated with this company can become a member. Each company appoints a principal to serve as the “designated real estate agent” for the company.
Once a principal has joined, all agents, brokers and appraisers licensed or affiliated with that principal may choose to join the association. If these individuals choose not to become real estate agents, NAR charges the “designated real estate agent” a non-member assessment for each non-member.
What is the NAR Code of Ethics?
According to NAR, the code “is what separates real estate agents from non-member real estate agents.”
How is the Code of Ethics presented to members?
New members must attend an orientation and agree to abide by NAR’s Code of Ethics and Professional Standards, which outlines duties to clients and clients, the public and other realtors.
Members may be required to complete periodic training on the Code of Ethics as a condition of continued membership.
What’s in the code and how was it written?
The code consists of 17 articles, 71 supporting standards of practice and 131 explanatory case interpretations.
It was founded on the principles of the “Golden Rule” and requires real estate agents to cooperate with each other to promote the best interests of consumers and their clients.
The code demands respect for others’ exclusive dealings with clients and keeps disputes between members “in the family” by requiring realtors to arbitrate or mediate disputes.
The association publishes an updated version of the code each January in Realtor magazine..
Has the code ever changed?
NAR considers its code a “living” document and has amended it many times over its century-old history to ensure it remains relevant to real estate practitioners today.
NAR has also amended the code to reflect changes in equal opportunity and fair housing standards and laws.
Why is code important to NAR?
“Part of the incentive to become a real estate agent is to capitalize on the good reputation of NAR members. The idea is that consumers will choose to work with a real estate agent who is sworn to treat all parties fairly and honestly” , says NAR.
Local and state associations of real estate agents are primarily responsible for ensuring that members adhere to the code, and some have developed methods for dealing with member infractions.
How much does it cost to become a real estate agent? What are the membership fees used for?
Annual membership dues for the NAR are currently $120 per member.
Brokers must also pay NAR dues multiplied by the number of non-member sellers, if any, in their office.
Where is this money going?
Of that $120 fee, 42%, or $50, goes to NAR’s lobbying efforts. This part of the contribution is considered non-deductible for income tax purposes, in accordance with the Tax Reform Act 1993.
The NAR’s Political Action Committee (PAC), considered one of the strongest lobbying efforts in the nation and the largest contributor of direct contributions to federal candidates, works on behalf of members to develop, advance and implement the federal legislative objectives of the association.
PAC works with Congress and the executive branch through lobbying, policy development, political field representatives, policy communications, and grassroots advocacy.
NAR also charges members an annual “special assessment” fee of $35 for its consumer advertising campaign, an initiative launched by NAR in 1997 to help consumers understand the value real estate agents can bring to the transaction. real estate, local communities and markets and public policies related to the transfer and ownership of real estate.
The fee for 2015 and 2016 is $35, but it’s not pro-rated if you become a realtor after January 1, 2015 – you still owe the full $35 when you sign up.
NAR’s current campaign, “Get Realtor”, aims to build awareness of the Realtor brand and specifically aims to reach millennial buyers and sellers through the use of social, digital, online and social media channels. traditional.
What are the NAR fees for?
NAR’s fee makes a variety of resources available to realtors, including online Code of Ethics training, informational webinars, residential listings at realtor.com, international US listing exposure with translation services and area/currency conversion, Realtor magazine subscription, union account credit, market research and technology reports, library and research services, historical data requests, and marketing and advertising services.
Members also receive discounts on items such as certification courses, books and brochures, conference attendance, car rentals, cell phones, dental and medical insurance, and prescription coverage.
Email Amy Swinderman