Remember that funny scene from “Modern Family” where Gloria tells Aunty Alice Phil’s not a real estate agent, “He’s a Realtor; there is a difference somehow?” Turns out, Gloria was onto something! She was, in fact, subtly pointing out the real distinctions in the professional titles of Real Estate Agent vs Broker vs Realtor.
The terms real estate agents, realtors, and brokers are often used interchangeably, yet they signify different levels of expertise, education, and licensing in the real estate profession.
While all these professionals—real estate agents, realtors, and brokers—assist clients in buying, selling, or renting properties, only realtors are members of the National Association of Realtors (NAR) and are bound by its code of ethics
But this is just the tip of the iceberg. There are many differences between these three professions that you must know about if you are looking to build a career in real estate. So, let us decode the mystery of Real Estate Agent vs Broker vs Realtor right away!
1. Who is a Real Estate Agent?
A real estate agent is a licensed professional who helps clients buy, sell, or rent properties. Well, that is something that you know already, what else? Well, these agents are typically affiliated with a brokerage firm and work under a licensed broker.
To become a real estate agent, individuals must complete pre-licensing coursework and pass a state licensing exam. In many states, license holders are required to continue their education to keep their licenses valid.
1.1 Types of Real Estate agent
When it comes to buying or selling a property, there are different types of real estate agents with specialized skill sets. Here are some of the most common types of real estate agents:
- Seller Representative Specialist (SRS): An SRS is a real estate agent helping homeowners sell their properties. This kind of real estate agent has advanced specialization and experience in pricing, staging, and marketing homes to potential buyers.
- Accredited Buyer’s Representative (ABR®): An ABR® is a real estate agent working with buyers. They have advanced training in buyer representation, negotiation, and contract preparation.
- Certified Residential Specialist (CRS): A CRS is a real estate agent who has completed advanced training in residential real estate, including topics like marketing, technology, and ethics.
- NAR’s Green Designation: A real estate agent with NAR’s Green Designation has full training on sustainability and energy-efficient home features. They aid buyers and sellers in making informed decisions about eco-friendly properties.
- Seniors Real Estate Specialist (SRES): An SRES is a real estate agent who specializes in working with clients 50 years of age or older. They have specialized knowledge of the unique needs and challenges of this demographic.
1.1.1 Listing/Seller’s Agent
Responsibilities of Listing agent
A listing or seller’s agent is a real estate professional who represents the seller of a property. Their primary responsibility is to help the seller market and sell their property for the best possible price. They work with the seller to set a price for the property, develop marketing strategies, and negotiate offers from potential buyers.
As per the US Bureau of Labor Statistics, The responsibilities of a listing agent include:
- Conducting a comparative market analysis to determine the value of the property
- Developing a marketing plan that includes online and offline advertising
- Staging the property to showcase its best features and make it more appealing to potential buyers
- Holding open houses and private showings for interested buyers
- Responding to inquiries and providing information about the property to potential buyers
- Negotiating offers on behalf of the seller to get the best possible price and terms
- Preparing and reviewing all necessary paperwork and contracts
- Coordinating inspections, appraisals, and other necessary tasks
- Facilitating the closing process and ensuring a smooth transaction for all parties involved
1.1.2 Buyer’s Agent
Responsibilities of a Buyer’s Agent
A buyer’s agent is a real estate professional who represents the interests of the buyer during the home-buying process. Their major focus is to assist the buyer find and help them purchase a property that meets their needs and fits within their budget.
As per Naeba The responsibilities of a buyer’s agent include:
- Helping the buyer find suitable properties based on their preferences, needs, and budget
- Arranging showings and accompanying the buyer on property visits
- Providing information on the local real estate market and comparable sales data
- Conducting research and due diligence on properties of interest
- Drafting and submitting offers on behalf of the buyer
- Negotiating with the seller or the seller’s agent to secure the best possible price and terms
- Reviewing and explaining all necessary paperwork and contracts to the buyer
- Coordinating inspections and other necessary tasks, such as title searches and surveys
By working with a buyer’s agent, homebuyers can benefit from their expertise and knowledge of the local real estate market. A buyer’s agent can help buyers navigate the often complex and overwhelming home-buying process, and ensure that they get the best possible deal on their new home.
Note: With the help of the internet has caused the availability to a massive pool of information. It is now easier for the agents to operate and hence they don’t have to work as hard as before. Also as per a recent NAR report, almost 86% of buyers who are interested in buying and selling a property still close the deal with an agent- the reason being simple- the agents aid them in terms of paperwork, and legalities.
1.1.3 Dual Agent
A dual agent is a real estate professional who represents both the buyer and the seller in a real estate transaction. Both parties in this scenario require the dual agent to act in their best interests and remain neutral throughout the transaction.
As per Forbes, The responsibilities of a dual agent include:
- Providing equal representation to both the buyer and the seller
- Maintaining confidentiality for both parties
- Disclosing any conflicts of interest that may arise during the transaction
- Advising both parties on the legal and financial implications of the transaction
- Assisting with the negotiation of the terms of the sale
- Coordinating all necessary tasks, such as inspections and appraisals
- Ensuring that all necessary paperwork and contracts are completed and filed correctly
It is important to note that the responsibilities of a dual agent are unique and require a high level of skill and expertise. Suppose you are considering using a dual agent. In that case, it is important to do your due diligence and ensure that you are working with someone experienced and qualified to represent both parties fairly and ethically.
Talking about the dual agency concept, dual agency is considered illegal, in some of the states of America the reason is simple, it leads to the compromising of the seller’s and buyer’s interests and creates a conflict of both the party interests simultaneously. As per Homelight, these states are- Alaska, Colorado, Florida, Kansas, Maryland, Texas, Vermont, and Wyoming.
1.2 What are the general requirements to become a real estate agent?
To become a licensed real estate agent, there are general requirements that must be met. These may vary slightly from state to state, but the following are some common requirements:
1.2.1 Age:
The applicant must be at least 18 years old, and should be a legal US resident.
1.2.2 Education:
As per Zillow, most states require completion of a certain number of hours of pre-licensing education, typically ranging from 30-200 hours. These hours need to be spent on various courses that include real-estate-focused options such as Master of Professional Studies in Real Estate, Doctor of Business Administration / Real Estate Development, etc.
1.2.3 Background check:
Applicants must pass a criminal background check.
1.2.4 Prelicensing education requirements:
Every state has its own qualification-related guidelines and requirements. But one common thing is the prelicensing education requirements. To get a license, applicants must need to go through specific pre-licensing courses.
1.2.5 Exam:
As per Investopedia, Applicants must pass a state licensing exam, which typically includes both national and state-specific components. The exams have computerized formats and cover the general principles associated with real estate. In the case you fail the exam there is no limit to the number of times you give the exam.
1.2.6 Licensing and education fee:
Applicants must pay licensing fees, which vary by state. However, there are a few other options available to choose from such as Live online classes which would cost you anywhere between $300 – $900+. If we consider other options such as on-demand classes ranging from about $200 – $800+. Talking about the last option which is home study, costs around $180 – $600.
1.2.7 Continuing Education:
Most states require licensed agents to complete continuing education courses to maintain their license.
| State | Continuing Education Requirement |
|---|---|
| New York | contact hours every 2 years |
| South Dakota | contact hours every 2 years (more requirements depending on specialty) |
1.2.8 Sales Experience:
Some states may require applicants to have a certain amount of experience in real estate sales before becoming licensed.
| State | Requirements |
| California | 135 hours of pre-licensing education, pass the salesperson examination, submit a license application and fee, and complete a background check. |
| Florida | 63 hours of pre-licensing education, pass the sales associate examination, submit a license application and fee, and complete a background check. |
| Illinois | 75 hours of pre-licensing education, pass the state and national portions of the broker exam, submit a license application and fee. |
| New York | 75 hours of pre-licensing education, pass the salesperson examination, complete a background check, and submit a license application and fee. |
| Texas | 180 hours of pre-licensing education, pass the state and national portions of the licensing exam, submit a license application and fee. |
| Virginia | 60 hours of pre-licensing education, pass the licensing examination, complete a background check, and submit a license application and fee. |
1.2.9 Sponsorship:
In some states, applicants must have a sponsoring broker before they can be licensed.
Becoming a licensed real estate agent can be a rewarding and lucrative career, but it requires dedication and hard work to meet the requirements and maintain the necessary skills and knowledge to succeed in the field.
| Read More: Can You Be a Part-Time Real Estate Agent? |
1.3 What are the prerequisites to becoming a real estate agent?
To become a licensed real estate agent, you do not typically require prior field experience. However, some states may have additional requirements that applicants must meet in order to be eligible for a license.
In some states, applicants may be required to have a certain amount of real estate sales experience before becoming licensed. For example, in California, an applicant must have completed at least three college-level courses in real estate and have accumulated at least two years of full-time real estate sales experience within the last five years. In Texas, an applicant must have four years of experience as a licensed real estate salesperson or broker during the four-year period before applying for a broker license.
In other states, there may be no specific experience requirements, but applicants may be required to have a sponsoring broker who can vouch for their knowledge and abilities in the field. This is because real estate agents typically work under the guidance of a licensed broker, who is responsible for overseeing their work and ensuring that they comply with relevant laws and regulations.
This coursework typically covers topics such as property ownership, contracts, finance, and real estate law. The licensing exam usually consists of two parts: a national portion and a state-specific portion.
1.4 What is the required course and training to become a real estate agent?
Becoming a real estate agent requires the completion of a pre-licensing training course. The courses are mandated by the state regulatory authority and provide aspiring agents with knowledge of local and state real estate regulations.
The duration of the training courses varies depending on the state, ranging from 63 hours in Florida to 135 hours in California. The courses cover a variety of topics that are essential to becoming a successful agent.
The courses cover state and local laws and regulations. It is crucial for a real estate agent to understand the legal requirements and guidelines for selling and buying property. Real estate agents need to be familiar with zoning laws, property taxes, and regulations that vary from one state to another.
Real estate financing is another topic covered in these courses. It provides the students with an understanding of the various mortgage programs, credit scoring, and loan processing procedures. A comprehensive understanding of real estate financing can help agents in guiding clients through the financing process.
Contracts and sales are also critical aspects of the training course. Agents must understand how to create and interpret contracts, including purchase agreements and lease contracts. The courses teach the students how to navigate and negotiate the sales process to secure the best deal for their clients. Additionally, the course covers the pricing and valuation process, where students learn how to determine the market value of a property.
The assessment and taxes topic helps agents understand the tax implications associated with buying and selling property. They learn about property tax assessments, capital gains tax, and other taxes that may affect a real estate transaction. Understanding this helps agents to guide their clients on how to minimize their tax liabilities.
To become a successful real estate agent, additional training beyond the pre-licensing courses is recommended. Advanced courses are available in various topics such as real estate marketing, property management, real estate investment, and property appraisal. These courses help agents develop specialized knowledge in their field, which can set them apart from the competition and build credibility among clients.
| Also Read : Do Real Estate Agents Get Drug Tested? |
1.5 What can you do with a real estate agent’s license?
With a real estate agent’s license, one can pursue several different career paths and opportunities. Here are some of the most common things you can do with a real estate agent’s license:
- Work as a Real Estate Agent: The most obvious career path for someone with a real estate agent’s license is to work as a real estate agent. As a real estate agent, you can work for a brokerage or start your own real estate business.
- Property Manager: Property management is another popular career path for those with a real estate license. As a property manager, you would be responsible for managing and maintaining a property on behalf of the owner.
- Real Estate Appraisal: Real estate appraisers use their knowledge of the local real estate market to determine the value of a property. As an appraiser, you could work for a real estate appraisal firm or start your own appraisal business.
- Work in Real Estate Development: Real estate developers are responsible for creating new real estate projects, such as housing developments or commercial properties. With a real estate license, you could work in real estate development or start your own real-estate development company.
- Work in Real Estate Finance: Real estate finance is a growing field that involves working with clients to secure financing for their real estate transactions. With a real estate license, you could work in real estate finance or start your own finance business.
- Work in Real Estate Education: Many real estate agents and brokers go on to work in real estate education, either as instructors or as curriculum developers.
1.6 What is the cost of getting a license and becoming a real estate agent?
The cost of becoming a licensed real estate agent varies depending on the state you are in and the education provider you choose. The national average cost for a pre-licensing course is around $350 to $500, while the exam fee ranges from $15 to $200. In addition, state license fees range from $25 to $300. These fees do not include additional expenses such as fingerprinting, background checks, and continuing education courses.
Tabular view of Pre-licensing cost for some major states:
| State | Cost of Pre-Licensing Course |
| California | $119 to $799 |
| Florida | $200 to $500 |
| Texas | $495 to $825 |
| New York | $250 to $499 |
| Illinois | $519 to $650 |
Tabular view of exam fee cost for some major states:
| State | Cost of Pre-Licensing Course |
| Florida | $36.75 |
| California | $60 |
| Texas | $54 |
Online and on-demand courses are becoming increasingly popular, and they offer flexible learning options for those who want to become a real estate agent. The cost of online courses ranges from $200 to $1,000, depending on the state and the provider. Many education providers offer online study materials, practice exams, and live support for an additional cost. Some providers even offer home study options, which may be a good choice for those who prefer self-paced learning.
| State | Cost of Pre-Licensing Course |
| California | $379 to $909 |
| Florida | $169 to $550 |
| Texas | $485 to $930 |
| New York | $295 to $497 |
For example, in California, the cost of a 135-hour online pre-licensing course ranges from $109 to $545. The exam fee is $60, and the state license fee is $245. In New York, a 75-hour online course costs between $379 to $909.
1.7 What Are The Responsibilities of a Real Estate Agent?
As per Indeed, a real estate agent is responsible for managing property transactions between buyers and sellers. The responsibilities of a real estate agent are varied and can include the following:
- Provide guidance and expertise to clients on buying or selling a property.
- Create and manage property listings.
- Schedule and conduct property showings for clients.
- Negotiate offers and contracts between buyers and sellers.
- Ensure that all legal and financial paperwork is complete and accurate.
- Work with other professionals, such as home inspectors and appraisers, to ensure a smooth transaction process.
- Stay up-to-date with changes in the real estate market and adjust strategies accordingly.
- Build and maintain relationships with clients to ensure future business.
Real estate agents are responsible for ensuring that all parties involved in a property transaction are satisfied with the outcome. They must possess excellent communication and negotiation skills to navigate the complex process of buying or selling a property.
1.8 How do real estate agents get paid?
Real estate agents are typically paid on a commission basis, which means they earn a percentage of the sale price of a property. Here are some key points to know about how real estate agents get paid:
- Commission rates: The commission rate is typically between 5% and 6% of the sale price of the property, and is usually split between the buyer’s agent and the seller’s agent. This is not the final price that the real estate agents receive. They first have to share this 5-6% of the total commission with the brokers they are associated with and then these brokers pay the real estate agents. However, commission rates can vary depending on the location, type of property, and other factors.
- Who pays the commission: The seller is typically responsible for paying the commission, which is deducted from the sale price of the property. The commission is then split between the buyer’s and seller’s agents.
- When the commission is paid: The commission is paid at the closing of the sale, which is when the property officially changes ownership. The funds are typically distributed by the escrow company or the title company.
- Other compensation models: Some real estate agents may also earn a salary or receive bonuses from their brokerages, but this is less common than the commission-based model.
| Read More: Do Real Estate Agents Work on Weekends? |
2. Who is a Realtor?
Real estate agents that are associated with NAR and can work independently without any restriction of woking under a broker or third-party firm are known as Realtors Realtors are associates with National Association of Realtors (NAR) and are paid on a commission basis, for instance they receive a percentage of final sales price whenever they help their client buy or sell any property.
As per a report by Leads Deposit there are currently over 1,563,502 licensed realtors in the United States. Almost all real estate agents are realtors but it is not simply that all real estate agents are realtors. Realtors also hold more educational qualifications than real estate agents. Realtors also need to work under specific guidelines given by NAR and uphold a code of ethics.
Talking about the salary of the realtors so according to the NAR, the median gross income of Realtors was $43,200 in 2020. Realtors have access to a variety of resources and tools through the NAR, including industry data and research, networking opportunities, and marketing resources. One of the main benefits of working with a Realtor is that they have a fiduciary duty to their clients, meaning they are legally obligated to act in their client’s best interests in all transactions.
2.1 What is the general requirement to become a realtor?
As per Indeed, to become a Realtor, one must fulfill certain requirements, including:
- Educational Requirements: To become a real estate agent, you must complete a pre-licensing course, which varies by state. In some states, this course can be taken online, on-demand, or through home study, while in others may require offline classroom attendance.
- Licensing Exam: After completing the pre-licensing course, one must pass a state licensing exam. The exam typically consists of both national and state-specific sections.
- Background Check: Many states require background checks to be performed on those seeking a real estate license.
- Continuing Education: To maintain their license, real estate agents must complete continuing education courses every few years, which vary by state.
- Membership with the National Association of Realtors (NAR): To become a Realtor, one must become a member of the National Association of Realtors (NAR). This requires adherence to a code of ethics and standards of practice set by NAR.
2.2 How do you join NAR?
As of August 2021, the National Association of Realtors (NAR) had an impressive membership of almost 1.5 million real estate professionals nationwide. Among this number, 65% of NAR members hold a license as a sales agent, while 22% are licensed brokers, and 15% hold broker associate licenses.
Membership with NAR is lot beneficial as it comes with a sense of achievement and provides listing reosurces. Here are the general requirements to become a member of NAR:
- Have a valid and active real estate license: To join NAR, you must have an active real estate license in the state where you practice. Your license should not be inactive, suspended, or revoked.
- Be actively engaged in the real estate business: You must be currently engaged in the real estate business either as a licensed real estate agent, broker, or appraiser. It should also be mandatory for you to derive the main income from real estate activities.
- Not have a record of official sanctions involving unprofessional conduct: You must not have any disciplinary sanctions or revocations on your license or have been found guilty of any unprofessional conduct by a real estate regulatory authority.
- Not have filed for any recent or pending bankruptcy: You must not have filed for bankruptcy within the past three years or have any outstanding debts or tax liens that could negatively impact your membership.
2.3 What is the membership fee for a realtor?
Becoming a member of the National Association of Realtors (NAR) involves paying various fees and costs. These fees are different from the cost of becoming a licensed real estate agent. To become a realtor, one must first be a licensed real estate agent.
Here are the membership fees and costs associated with becoming a realtor:
- Application Fee: There is a one-time application fee of $75 to apply to become a realtor.
- NAR Dues: NAR also requires its members to pay annual dues, which are currently $120 per memeber.
- Multiple Listing Service (MLS) Fees: MLS is a database of real estate listings that only realtors have access to. Many real estate agents join an MLS system through their local association. The fees for joining MLS systems can vary, but they can range from a few hundred dollars to over a thousand dollars per year.
- Continuing Education: Realtors are required to complete continuing education courses to maintain their license. These courses can cost anywhere from a few hundred dollars to over a thousand dollars per year.
- Exam and Pre-Licensing Course Fees: The cost of pre-licensing courses and exams varies by state and can range from a few hundred dollars to over a thousand dollars.
| Fee Description | Estimated Cost |
| Pre-Licensing Course | $200-$1,000 |
| Real Estate Exam | $50-$200 |
| NAR Membership | $150-$500 |
| MLS Access | $20-$50/month |
| Lockbox Access | $100-$200/year |
| Errors and Omissions (E&O) | $300-$500/year |
| Continuing Education (CE) | $200-$500/year |
2.4 What are the requirements to join NAR?
To become a member of the National Association of Realtors (NAR), there are several requirements that applicants must meet. These requirements are in place to ensure that NAR members are qualified and professional individuals who uphold the values and standards of the organization.
First and foremost, individuals must hold a valid and active real estate license in the state where they conduct business. This means that they must have completed the necessary education and passed the state real estate exam.
Additionally, applicants must be actively engaged in the real estate business, which includes buying, selling, leasing, or managing real estate. This requirement is in place to ensure that only individuals who are actively working in the field can become members of NAR.
Applicants must also not have a record of official sanctions involving unprofessional conduct. This means that they must have a clean record of ethical conduct and not have been subject to any disciplinary action or revocation of their real estate license.
As stated above, the candidate should not be bankrupt as this might hamper the honour of the organisation.
Joining the National Association of Realtors (NAR) can be an excellent opportunity for real estate professionals. It not only grants access to a vast network of industry professionals but also provides access to essential resources, training, and support that can help boost the success of one’s business.
Here are some of the benefits of NAR membership:
2.4.1 Access to a vast network of industry professionals:
NAR members gain access to a community of more than 1.5 million real estate professionals, including brokers, salespeople, property managers, and other industry experts. Members can use this network to connect with others in the field, share knowledge and experiences, and build relationships.
2.4.2 Business and career resources:
NAR membership provides access to a variety of tools and resources that can help real estate professionals build and grow their businesses. This includes access to educational programs, market research, legal resources, and industry news.
2.4.3 Discounts on products and services:
NAR members can save money on everything from office supplies to marketing services. Members can also take advantage of discounts on continuing education courses, conferences, and other professional development opportunities.
2.4.4 Professional standards:
As a member of NAR, real estate professionals agree to adhere to a strict code of ethics and professional conduct. This helps to maintain high standards of professionalism and ensures that members are held accountable for their actions.
2.4.5 Advocacy:
NAR advocates on behalf of its members on issues related to the real estate industry. This includes lobbying for legislation that benefits real estate professionals and homeowners, fighting against policies that could harm the industry, and advocating for the rights of property owners.
NAR membership comes at a cost, and fees vary based on location and membership level. As of 2021, the national dues for a REALTOR® member were $120 per year, while state and local association fees vary. Additional fees may also apply for MLS access or other services.
2.5 What are the ethical codes for a realtor?
Realtors are required to abide by a code of ethics that governs their professional conduct. The National Association of Realtors (NAR) has established a comprehensive set of ethical standards for real estate agents, which comprises 17 articles. These articles set forth the basic principles and responsibilities that all Realtors must uphold to maintain the integrity of the profession. Here are all of the 17 ethical codes for Realtors:
2.5.1 Article 1:
Realtors must pledge to protect and promote the interests of their clients while treating all parties honestly.
2.5.2 Article 2:
Realtors must avoid exaggeration, misrepresentation, or concealment of pertinent facts related to property or transactions.
2.5.3 Article 3:
Realtors must cooperate with other real estate professionals to advance their clients’ best interests and preserve the integrity of the profession.
2.5.4 Article 4:
Realtors must disclose any interest they have in a property or transaction, such as ownership or familial relationships.
2.5.5 Article 5:
Realtors must avoid discriminating against any person or group based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.
2.5.6 Article 6:
Realtors must not provide professional services outside their field of competence or expertise.
2.5.7 Article 7:
Realtors must promote and protect the interests of their clients while treating all parties honestly.
2.5.8 Article 8:
Realtors must not commingle their clients’ funds with their own or use their clients’ funds for personal expenses.
2.5.9 Article 9:
Realtors must not accept any commission or compensation that is contingent upon a particular transaction’s success.
2.5.10 Article 10:
Realtors must only make truthful, accurate, and non-misleading statements about other real estate professionals and their businesses.
2.5.11 Article 11:
Realtors must not engage in any practice that would harm the public or discredit the profession.
2.5.12 Article 12:
Realtors must not make any false or misleading statements about their qualifications or services.
2.5.13 Article 13:
Realtors must only use their professional designations, such as “Realtor,” in a manner that accurately reflects their membership status.
2.5.14 Article 14:
Realtors must not engage in any practice that would violate antitrust laws or other laws governing real estate practices.
2.5.15 Article 15:
Realtors must not refuse to cooperate with other real estate professionals based on their affiliation with a particular organization or group.
2.5.16 Article 16:
Realtors must not engage in any conduct that would bring discredit to the real estate profession.
2.5.17 Article 17:
Realtors must remain up-to-date on real estate laws, regulations, and standards of practice in their area of business.
These ethical codes for Realtors help to establish a professional standard that benefits everyone involved in a real estate transaction. They promote fairness, honesty, and transparency, which are crucial for maintaining the trust of clients and the public.
2.6 What is the education and training for a realtor?
As per NAR, To become a successful realtor, you need to have a certain level of education and training. The industry requires a unique combination of skills that can be acquired through different courses and certifications. Let’s dive deeper into the education and training requirements for realtors.
2.6.1 Residential Accredited Appraiser / RAA
The Residential Accredited Appraiser course is one of the most popular courses in the real estate industry. It covers essential topics like real estate appraisal, market analysis, and report writing. This course is essential for those looking to specialize in real estate appraisal and earn the RAA designation.
Application fee- $100
Annual dues- $125
2.6.2 Seller Representative Specialist / SRS
The Seller Representative Specialist course teaches agents how to effectively represent sellers in the real estate market. It covers various topics like property pricing, negotiation, and contract drafting. This course is perfect for real estate agents looking to specialize in seller representation.
Annual dues
Waived for the first year
$99 each subsequent year
2.6.3 REALTOR® Association Certified Executive / RCE
The REALTOR® Association Certified Executive course is designed for real estate executives looking to advance their career. It covers a range of topics like leadership, governance, and strategic planning. This course is essential for those looking to become successful real estate executives.
Application fee- $375
Certification fee- $195
Re-certification fee (every four years)- $125
Annual dues- $85
Exam module re-take fee – $50 per module
2.6.4 Accredited Land Consultant / ALC
The course structure of the Accredited Land Consultant (ALC) requires the candidate to complete the rigorous LANDU education program. This designation is usually hold by realtors that are slightly more experienced, professional.
Exam- The fee is $100 and covers two attempts.
Courses- $535
Designation- $350
Annual Dues- $445.
2.6.5 Certified Commercial Investment Member / CCIM
The Certified Commercial Investment Member is a special designation that is considered as a commercial real estate’s global standard. This designation is achieved by following a successful currcicualm of 200 classes.
Annual due-
$650 for U.S. professionals
$600 U.S. membership with government discount
$420 for Canadian membership
$195 International membership
2.6.6 Certified International Property Specialist / CIPS
The Certified International Property Specialist requires the candidate to finish five full-day courses that are focused on vital aspects of the transaction in the international real-estate domain.
Online courses- $149 each
Application fee- $75
Annual dues- $95
2.6.7 Certified Residential Specialist / CRS
This is byfar considered one of the best designations for an individual to gain. This designation is given to a sales person, realtor when they earn three times more than the gross sales than the other realtors.
Application fee- $99
Annual Dues- $195
2.6.8 NAR’s GREEN Designation / GREEN
In this designation the Green Council of Nar provides tools, education and other liberties to the realtors that helps them in selling properties with green features.
Dues- First year free, $98.50 per year after that
2.6.9 Performance Management Network / PMN
This designation is slightly different from the other ones as this focuses on the negotiation skills and the networking tactics of realtors and help them improve in this domain. Shaping them for the overall leadership development and become better relators.
Application fee- $125
Annual dues- $50
Cost of courses- $150-$199
2.6.10 Society of Industrial and Office REALTORS® / SIOR
The Society of Industrial and Office REALTORS is provided to the realtor that exhibit extreme performance. This designation is presented to the most experienced, and successful realtors.
Application fee- $175
Initiation fee- $725
Annual Dues- $1,280
Continued education: Even after getting a license and completing various courses, there are further requirements. As per the state laws, each state mandates a certain required number of courses that are needed to be completed in order to maintain the real estate license. Statewise details can be found here.
The cost of real estate education and training varies depending on the type of course and the delivery method. Online courses and home study options are usually more affordable than on-demand courses. On-demand courses provide the most flexibility, but they tend to be more expensive than other options.
2.7 What are the responsibilities of a realtor?
Market analysis
A realtor conducts market analysis to help clients understand the current real estate market. They analyze various factors like property prices, market trends, and competition to help clients make informed decisions.
Property pricing
Realtors help clients determine the appropriate price for their property. They use their knowledge of the local real estate market to ensure that the property is priced appropriately.
Property marketing
Realtors market properties to potential buyers by creating engaging listings and showcasing the property through various channels. This includes online platforms, print media, and open houses.
Negotiation
Realtors are skilled negotiators who help clients get the best possible price for their property. They use their experience and knowledge of the market to negotiate on behalf of their clients.
Contract drafting
Realtors draft contracts that outline the terms and conditions of the real estate transaction. They ensure that the contract is legally binding and that all parties involved understand the terms and conditions.
Transaction management
Realtors manage the real estate transaction from start to finish. This includes coordinating with other professionals like lawyers, home inspectors, and mortgage brokers to ensure that the transaction is completed smoothly.
2.8 How do realtors get paid?
One of the most commonly asked questions about realtors is how they get paid. Let’s explore this topic in detail.
Commission-based
Realtors are typically paid on a commission basis. This means that they receive a percentage of the sale price of the property that they help sell. As per Clever, the commission rate is usually 5% to 6% of the sale price, which is split between the buyer’s and seller’s agents.
Paid by the seller
The seller pays the real estate commission fees. This is typically done at the time of closing, and the commission fees are deducted from the sale price of the property.
No payment for rental properties
Realtors are not paid for helping clients find rental properties. This means that clients do not have to pay any fees to a realtor for helping them find a rental property.
Payment for additional services
Realtors may charge additional fees for services like home staging, professional photography, and property appraisals. These fees are negotiated between the realtor and the client and are typically paid by the seller.
Let me give you an example to help you understand how realtors get paid. Meet John, a homeowner who wants to sell his house. He hires a realtor, Bary, to help him with the sale. Bary helps John price the house, market it, and find potential buyers. He also negotiates with potential buyers and helps John finalize the sale.
When John’s house sells, Bary is entitled to a commission fee, which is usually 5% to 6% of the sale price. Let’s say John’s house sells for $500,000, and Bary’s commission rate is 5%. This means that Bary’s commission fee would be $25,000, which is split between Bary and the buyer’s agent. The seller (John) is responsible for paying the commission fee. So, at closing, $25,000 would be deducted from the sale price of the house, and $12,500 would go to Bary.
Now, let’s say John decides to hire Bary to help him find a rental property instead of selling his house. In this case, Bary would not be entitled to a commission fee. Instead, John would simply pay Bary for her services, which may include helping him find a suitable rental property.
So, in summary, realtors get paid on a commission basis, and the commission fee is paid by the seller. Fees for services like home staging, professional photography, and property appraisals. By understanding how realtors get paid, clients like John can make informed decisions and negotiate fees that are suitable for their needs.
3. Who is a Real estate broker?
A real estate broker is a licensed professional who represents buyers or sellers of real estate. They oversee real estate transactions and provide guidance to clients throughout the process. A broker can work independently or manage a team of real estate agents.
The main difference between a real estate agent and a broker is that a broker has completed additional education and licensing requirements. Brokers are authorized to oversee and manage real estate agents, while agents are required to work under the supervision of a broker. In short, a broker is a higher-level licensed professional who has completed more education and has more responsibilities than a real estate agent.
3.1 Types of Brokers
There are different types of real estate brokers because the real estate industry has different business models that require different types of brokers to manage them.
3.1.1 Associate brokers
Associate brokers are individuals who have completed the necessary coursework and passed the real estate broker exam, which is no easy feat. However, they are slightly lower experienced and qualified when it comes to qorking as independent brokers. As a result, associate brokers work under the supervision of a managing or principal broker, who provides them with guidance and direction on how to conduct their business.
3.1.2 Managing brokers
Managing brokers play a crucial role in the real estate industry by serving as the backbone of a brokerage firm. They are responsible for managing a team of real estate agents and associate brokers, which requires them to possess excellent leadership skills and knowledge of the industry. Managing brokers are responsible for the successful operation of the brokerage firm, which includes ensuring that the agents are following the best practices of the industry, and the firm is compliant with state laws and regulations. They are the go-to persons for the agents, and clients seek their advice on various real estate-related matters.
3.1.3 Principal/designated brokers
Principal or designated brokers play a critical role in the real estate industry. They are the ones who own and operate their own brokerage firms. In other words, they are the big guns in the real estate world. They have a significant impact on how their firms are run and how they operate. They have a higher level of responsibility and liability as compared to associate or managing brokers.
One of the main responsibilities of principal brokers is to oversee agents and associate brokers. They guide and train them to be the best in the business. They also manage the finances of the firm, which includes setting budgets, allocating funds, and ensuring that the firm is financially sound.
3.2 What are the general requirements for a broker?
The requirements for becoming a broker can vary depending on the state, but some general requirements include:
- Age and Residency: Most states require you to be at least 18 years old and a legal resident of the state to become a broker.
- Experience: Many states require you to have a certain amount of experience as a licensed real estate agent before you can become a broker. This experience can range from one to four years, depending on the state.
- Exam: Brokers must pass a broker’s exam in addition to the real estate agent’s exam. This exam typically covers more advanced topics, such as real estate law, finance, and property management.
3.3 How to get broker license?
There are significant differences between a real estate realtor and a broker. These requirements vary by state, but here are some general requirements:
- Salesperson License: In most states, you must hold an active real estate salesperson license for a minimum period of time (usually two to three years) before applying for a broker’s license.
- Experience: Along with holding a salesperson license, you need to have a certain amount of experience in the real estate industry. This experience can include working as a salesperson, closing real estate transactions, managing properties, or working in a related field.
- Education: You must complete a certain number of real estate education courses. The number of courses and the topics covered vary by state, but they typically include real estate law, finance, and appraisal.
- Exam: You must pass a state-administered broker’s exam. This exam covers real estate law, ethics, and brokerage principles.
- Application and Fees: You must complete an application and pay a fee to your state’s real estate regulatory agency.
3.4 What is the required education to get a license for a broker?
To become a licensed real estate broker, one must fulfil certain educational requirements. The specific educational requirements for a broker license may vary by state, but generally, brokers are required to complete several courses related to real estate.
Here are some of the required courses to become a licensed broker in most states:
- Real Estate Practice: This course covers the practical aspects of real estate, including how to manage real estate transactions, working with clients, and ethical and legal issues.
- Legal Aspects of Real Estate: This course focuses on the legal aspects of real estate transactions, including contract law, property law, and real estate regulations.
- Real Estate Finance: This course provides an understanding of real estate financing, including the various types of loans, mortgage options, and financing options.
- Real Estate Appraisal: This course covers the basics of real estate appraisal, including property valuation, market analysis, and appraisal methods.
- Real Estate Economics or Accounting: This course teaches the basics of real estate economics and accounting, including property valuation, market analysis, and financial analysis.
3.5 What are the responsibilities of real estate brokers?
Real estate brokers play a crucial role in the buying and selling of properties. Here are some of the main responsibilities of real estate brokers:
- Client Representation: One of the primary responsibilities of a real estate broker is to represent clients who are buying, selling or leasing property. This includes understanding their needs and preferences, identifying suitable properties, and negotiating deals that meet their goals.
- Marketing: Real estate brokers are responsible for creating marketing plans to promote properties that are up for sale or lease. They may use various marketing strategies such as social media, advertising, and direct mail campaigns to reach potential buyers or renters.
- Property Management: Brokers who specialize in property management are responsible for managing rental properties on behalf of landlords. They are responsible for collecting rent, handling maintenance and repairs, and dealing with tenant issues.
- Financial Management: Real estate brokers are responsible for managing finances related to real estate transactions, including escrow accounts, security deposits, and rental payments. They must ensure that all financial transactions are carried out accurately and transparently.
- Legal Compliance: Real estate brokers must ensure that all transactions comply with federal and state laws related to real estate transactions. They must also adhere to ethical standards set by their industry and be well-versed in legal issues related to real estate transactions.
- Networking: Real estate brokers must establish a network of contacts, including other brokers, lenders, appraisers, inspectors, and contractors. These relationships can help brokers find suitable properties, identify potential buyers or renters, and navigate real estate transactions more efficiently.
3.6 How do real estate brokers get paid?
Real estate brokers earn money through commissions, which are paid by the seller of the property. The commission amount is usually a percentage of the total sale price and is split between the buyer’s and seller’s agents. Here are some important points to understand how real estate brokers get paid:
3.6.1 Commission percentage:
The commission percentage varies, but it is typically around 5-6% of the total sale price of the property. This is not the final commission that the real estate brokers receive. This commission amount is then splitted into half-half for each of the seller’s and the buyer’s agent. After that this amount is transferred to the brokerage these agents work with and then finally the brokerage firm pays the agent accordingly.
Let’s understand this with a quick example: If a house is sold in $300,000. Considering 6% commission for the real estate agents and the total amount comes out to be $18,000 and then this $18K will split in half between both the seller’s and the buyer’s agent. So both the parties get $9,000 each and they pass the amount to their respective real estate broker they are associated with. After that the brokers keeps the cut and then pays their respective agents.
3.6.2 Who pays the commission:
The seller of the property is responsible for paying the commission. This means that the seller’s agent will receive a commission from the seller, and the buyer’s agent will receive a commission from the seller’s agent.
3.6.3 Commission split:
The commission split between the buyer’s and the seller is about 6%, but it is usually split between the buyer’s agent, listing agent and with the firm they are associated with. However, this split can be negotiated between the agents and their respective brokerages.
3.6.4 The incentive for higher sale price:
Since the commission is based on the sale price of the property, real estate brokers have the incentive to sell the property for as high of a price as possible. This is because a higher sale price means a higher commission for the broker.
Other ways brokers can earn money: Real estate brokers can also earn money by charging administrative fees, transaction fees, or other fees related to the sale of a property. However, commissions are the primary way that brokers earn money.
4. Real Estate Agent vs Broker vs Realtor: The Key Difference
| Parameter | Real Estate Agent | Realtor | Real Estate Broker |
| Age | 18 yrs/ 18+ yrs | 18 yrs/ 18+ yrs | 18 yrs/ 18+ yrs |
| Salary/Commission | 4% to 6% | 6% | 5% to 6% |
| Education | High school diploma or equivalent, completion of a pre-licensing course | Same as real estate agent | Same as real estate agent, plus additional education and experience requirements |
| Licensing | State-specific licensing requirements | Same as real estate agent | Same as real estate agent, plus additional licensing requirements |
| Affiliation | Not affiliated with any professional organizations | Member of the National Association of Realtors (NAR) and local Realtor associations | Not affiliated with any professional organizations, but may own or manage a real estate brokerage |
| Code of Ethics | Required to follow state-specific real estate laws | Required to follow state-specific real estate laws and the NAR Code of Ethics | Required to follow state-specific real estate laws and NAR Code of Ethics |
| Scope of Practice | Facilitates buying, selling, or renting of real estate for clients | Required to follow state-specific real estate laws and the NAR Code of Ethics | Same as a real estate agent |
| Negotiation | Same as real estate agents, but may also negotiate on behalf of their agents and their clients | Negotiates on behalf of their client but cannot provide legal advice | Same as real estate agent may also manage properties or own a real estate brokerage |
| Experience | Typically has less experience in the industry | Same as a real estate agent | Typically has more experience in the industry due to additional licensing requirements |
| Liability | Personally liable for their actions and any legal disputes that arise from their transactions | Same as a real estate agent, but may have more experience due to additional education requirements | May be held liable for the actions of their agents and any legal disputes that arise from their transactions |
| Roles and Responsibilities | Facilitates buying, selling, or renting of real estate for clients | Same a real estate agent, may also manage properties or own a real estate brokerage | Same as a real estate agent |
5. When Is a Real Estate Agent a REALTOR?
So, when can a real estate agent be a REALTOR? The answer is simple: anytime they meet the membership requirements of the NAR. This includes being licensed to practice real estate, completing the NAR’s mandatory ethics training, and agreeing to follow the Code of Ethics.
Becoming a REALTOR has several benefits. They gain access to exclusive tools, resources, and training opportunities, which can help them better serve their clients. They also have access to a vast network of fellow REALTORS, which can be helpful in finding new clients and sharing industry insights.
For clients, working with a REALTOR can provide added peace of mind. They know that their agent is committed to upholding the highest standards of professionalism and ethics. They also have access to the latest market trends and insights, which can help them make informed decisions about buying or selling a property.
| Read More: 20 Obvious Signs of a Bad Realtor |
Conclusion
Real estate agents, realtors, and brokers might sound similar, but are not. People often mistake one for the other due to the fine line of differentiation between them. Moreover, it is very necessary for a person to have a clear understanding of what a realtor, a broker, and a real estate agent are. As this might be possible that you are hiring a wrong person for a wrong job or choosing a career mistaking it for the other.