Do you go to a real estate agent or Realtor when buying or selling a house? Some people say the former, others say the latter, but the rest don’t seem to mind. After all, there seems to be no difference as all of their responsibilities are linked to the real estate industry.
However, as far as their qualifications go, these two job titles are somewhat far apart. To put it bluntly, the ladder from bottom to top is as follows: real estate agent, real estate broker (more on this later), and Realtor (with a capital ‘R’ for a reason). Here’s a comprehensive look as to why this hierarchy appears this way.
Real Estate Agents
To start, a real estate agent is the official designation for professionals who manage transactions of real estate properties—land, buildings, and all. For a portion of the final sale price (generally between 4% and 6%), they ensure the buying or selling process proceeds without a hitch. Some agencies may use other terms like real estate associates, but they mean the same.
While some work independently, most agents work for companies like MV Realty and others. It doesn’t have a high entry bar, as even someone fresh out of high school can become one (though having a college degree helps immensely). Diploma aside, an aspiring agent must:
- Be at least 18 years of age and is a United States (U.S.) citizen;
- Complete a pre-licensing course from an accredited school;
- Pass the state-sanctioned real estate agent licensing exam;
- Have their license activated through a state agency; and
- Complete real estate post-licensing courses to keep the license.
Aspects like the required number of hours and the number of items in the exam depend on the state. For example, Florida law requires aspiring agents to finish a 63-hour pre-licensing course and score at least 50% in the Real Estate Sales Associate Examination.
After actively working as a real estate agent for a specific period (24 months activity within five years in Florida), they’re eligible to become a broker. A broker performs the same duties as an agent but with the added benefit of establishing their brokerage and hiring other agents. A broker can also work for another broker, commonly known as an associate broker, like MV Realty brokers and the like.
It’s said that becoming a broker is relatively more difficult than that for the agent. Aside from the necessary period of activity (on top of the agent requirements already completed), prerequisites for being a licensed broker in Florida include:
- Completing 72 hours of pre-licensing for brokers;
- Scoring at least 75% on the Florida Real Estate Broker Examination; and
- Completing 60 hours of post-licensing to maintain the broker license.
As explained here, brokers have more hours of education and experience than agents. On top of that, brokers may have access to a far broader property market since they’re not necessarily tied to an agency.
Realtors
The Realtor title is reserved for the 1.5 million members of the National Association of Realtors (NAR), one of the biggest trade associations in the country. This association holds a trademark to the term, so the official format is “Realtor®” (for brevity’s sake, this article will refer to it as “Realtor”).
It’s worth noting that not all Realtors are agents or brokers, as property appraisers and managers can also be Realtors. Nevertheless, as NAR puts it, what sets Realtors apart from the rest of the industry is their strict adherence to fairness and integrity. They may know the industry and tricks of the trade, yet they also have a duty not to cheat people out of their hard-earned cash.
Out of the need to uphold such values, membership into the NAR requires following the Code of Ethics and Standards of Practice. This eight-page document enshrines 17 articles and 90 sections about real estate best practices. For example, Article 2 explains the need to refrain from any form of misrepresentation of a property’s features, though not obligated to look for any defects.
Becoming an MV Realty Realtor starts with membership into a local association of Realtors, of which there are an estimated 1,400 nationwide. These associations, commonly referred to as boards, must also be members of one of 50 or so state Realtor associations. Fortunately, the NAR maintains an online directory where visitors can search for recognized groups in their respective states.
Conclusion
Qualifications distinguish real estate agents, brokers, and Realtors, but their professionalism and reliability don’t necessarily decrease down the ladder. Given the prerequisites for becoming one, federal law demands a semblance of fairness and integrity from the real estate industry as a whole. Without this crucial demand, owning a home would be extremely difficult, if not impossible.
