What is the Difference Between a Real Estate Agent, Broker, and a Realtor?

The terms real estate agent, broker and Realtor are often used interchangeably, but interestingly they don't mean the same kind of professional.

All three of these terms refer to a professional who is licensed to sell, lease, or help you buy a property, but their qualifications are different.

Let's start with a real estate agent, who are also often called real estate associates or salespeople. These professionals have a license to help others buy, sell or lease property, however they must work underneath a broker under what is called an agency agreement. Licensed real estate agents have completed the pre-qualification education and exam in their state to get their license.

Agents are responsible for bringing business to the brokerage and in exchange, they will receive a portion of the commission paid to the brokerage. They guide clients through their real estate transactions including marketing, inspections, offers, negotiations, and getting to closing.

A real estate agent who represents sellers is called a listing agent, while an agent who represents buyers is called a buyer's agent.

A real estate broker has a higher qualification than an agent. Each state has its own set of requirements to become a broker. However, a broker's license enables a professional to work independently. They can either open their own office or work independently, but they do not need to ‘hang their license' under another broker.

There are three different levels of being a broker. First, there is an associate broker who still needs to work under another broker while they have a broker's license. Their day-to-day tasks are typically the same as an agent. In some states, the introductory license is a broker's license instead of a sales agent license, however people in these states still need to work under a managing broker until they reach the next level of their career.

The next level is a managing broker. These brokers will lead an office, oversee transactions, and office operations. However, rarely will they get involved in normal selling and leasing tasks. Instead, they hold a managing and administrative role within a brokerage.

The last level is a principal or designated broker. Each real estate office has one principal broker. Their role is to oversee the sales staff and ensure that they stay compliant with all laws and regulations.

Brokers earn an income that is based on a share of the commissions that the agents and associate brokers bring to the brokerage.

Finally, let's discuss the term Realtor. A Realtor is a real estate professional who is a member of the National Association of Realtors (NAR), a US trade association. Realtors and real estate agents are commonly used interchangeably. However, a Realtor can also be a broker, appraiser, or property manager.

To become a realtor, individuals must have a real estate license, be actively working in a real estate profession, have a clean record of professional conduct, and not have any recent or pending bankruptcy filings. When they meet these requirements, they can join their local NAR association subject to a joining fee, annual fee, and maintaining their professional standing.

Whether you want to be a real estate agent, broker, or Realtor depends on your professional aspirations. Often, buyers and sellers will not know the difference. However, if you wish to work independently of a managing brokerage, you will need a broker's license, and if you want to be called a Realtor, you will need to join the National Association of Realtors.

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