Realtor vs. real estate agent: What’s the difference?

Whether you’re buying, selling or even renting a home, you may be wondering if you should enlist the help of a Realtor or real estate agent for the transaction.

Before you do, it’s important to know that these two common terms aren’t interchangeable: Realtors and real estate agents are different industry professionals.

Here’s everything you need to know about each one, including how Realtors work, how real estate agents work and which you may need most. We’ll also talk about what you need to consider when hiring either professional and where to find them.

What’s a real estate agent?

A real estate agent is licensed to assist with buying, selling or renting property. Real estate agents can work in either the residential or commercial sides of the real estate industry, and agents can represent either the buyer or the seller (or in some cases, the renter).

Real estate agents have a range of responsibilities, which may include:

• Advising sellers when pricing and preparing their home for sale
• Marketing and showing a property to potential buyers
• Offering guidance and insight to buyers who are shopping for a home
• Negotiating a sale for either buyers or sellers
• Facilitating and filing necessary documents, such as purchase offers, counteroffers, contracts and other agreements

In most states, a real estate agent is required to work under a broker. The services that the agent performs represent that brokerage and its clients.

Each state has its own qualifications and licensing requirements for real estate agents. In general, though, agents are required to complete certain real estate courses, pass a real estate agent exam, meet background check requirements and gain the sponsorship of a real estate broker in order to hold an active real estate license in that state.

What’s a Realtor?

Realtors are licensed real estate professionals who facilitate or oversee the sale, purchase or rental of a commercial or residential property.

While the responsibilities of a Realtor often overlap with those of a real estate agent, these two titles aren’t interchangeable. In order to become a Realtor, agents need to belong to the National Association of Realtors, or NAR. If the agent isn’t a member of NAR, they can only be licensed in the state where they work.

Not all real estate agents are considered Realtors, but Realtors can either serve as real estate agents or brokers. Depending on how they choose to operate, their responsibilities can include:

• Acting as brokers by overseeing a group of real estate agents and representing clients
• Acting as real estate salespeople by helping sellers prepare their home for sale, offering guidance, listing and marketing the property and fielding offers from potential buyers
• Representing buyers by showing properties, submitting offers and counteroffers and filing necessary documents
• Operating as a dual agent who represents sellers and buyers within the same agency

Each state’s Realtor requirements are different, and will even vary depending on whether the Realtor operates as an agent or a broker. Generally, though, these requirements involve completing specific courses, passing a written licensing exam, submitting for a background check and completing continuing education courses as necessary.

As a licensed Realtor, agents are required to follow the NAR Code of Ethics. This code outlines the duties and standards required of each licensed Realtor, ensuring that these industry professionals conduct themselves with integrity, competency and fairness.

In order to become a member of the National Association of Realtors, agents must first join their local association of Realtors. After acceptance, agents will agree to the NAR Code of Ethics and pay any required membership dues.

How do Realtors and real estate agents get paid?

Both Realtors and real estate agents work on commission, which means that they receive a percentage of the sale price of a property following a successful real estate transaction. Generally, Realtors and real estate agents don’t receive a salary or hourly wage for their services.

The typical commission on a property is 6% of the sales price, paid by the seller. But the listing agent doesn’t necessarily pocket that full amount.

A seller’s commission is usually split between the seller’s agent and the buyer’s agent, if one exists. If there is no buyer’s agent, the seller’s agent may be able to keep the full commission.

The commission check is often made payable to the broker who manages the listing agent, if applicable. That broker typically takes a cut and then forwards the rest on to the selling agent; if there’s also a buyer’s agent involved, the broker will split the remaining commission and disburse it to both parties.

While a 6% commission for agents is common, this isn’t set in stone. Commission fees may vary in certain parts of the country or even fluctuate based on market trends. Sellers may also be able to negotiate this fee, in some cases.

Should you hire a real estate professional?

Whether you’re buying, selling or renting a home, a real estate professional can be a huge asset. But you don’t have to hire a Realtor or a real estate agent.

As a buyer, hiring a Realtor or real estate agent to represent you is often a good idea. Because sellers pay agents, it won’t cost you anything; your agent will have extensive knowledge of the real estate market, though, and they can negotiate on your behalf. They may also be able to explain certain aspects of the process or advise you when deciding on an offer.

Buyers can also choose to work directly with the listing agent instead of hiring their own representative. But it’s often in buyers’ best interests to have their own, separate representation, especially during the negotiation, home inspection, appraisal and closing process.

As a seller, you may want to consider hiring a Realtor or real estate agent to market and show your property to potential buyers. They’ll have access to industry-specific listing platforms, understand the market and can provide you with valuable insight.

Yes, sellers are responsible for paying the commission for the agents involved in the sale. Since it can be a huge amount of work to sell your home without an agent, though — and you may wind up getting a much lower price for your property in the end — you might think twice before taking this approach.

How to find a Realtor or real estate agent

If you’re looking for a Realtor or real estate agent to help you buy, sell or rent a home, here are a few places to start.

• Ask around. Word of mouth is one of the most valuable recommendations you can get. Ask your friends, neighbors and other trusted individuals who may have bought or sold a home recently. They’ll be able to tell you about their experience, how well the agent worked for them and whether they would work with that agent again.
• Shop around. You can use a database, such as Realtor.com’s Find a Realtor tool, which helps you search through more than 1 million licensed Realtors nationwide. You can also search through local real estate associations and read online reviews to find potential agents.

Once you have a list of real estate agents to consider, it’s a good idea to meet with a few of them in person. Then you can ask any questions you may have about the market, their experience and their thoughts about your specific situation. This can help you determine if they’re the right fit for you and your home.

What’s a real estate broker?

A real estate broker is an individual who meets additional licensing requirements within their state. Brokers are able to manage and oversee a group of agents, ensuring that they’re all operating as required by law and in the best interests of their clients.

Real estate brokers must sit for their state’s broker licensing exam, as well as complete required coursework for the state in which they operate. While real estate courses cover topics such as ethics, taxes, contracts and insurance, brokers’ courses tackle these subjects with even greater depth.

There are three types of real estate brokers.

• Principal/designated broker: The principal or designated broker is responsible for overseeing all the real estate agents within a brokerage. Their job is to ensure that all agents follow all state and national real estate laws, and act according to any real estate regulations.
• Managing broker: A managing broker is responsible for managing the agents within a brokerage. They may hire and train new agents, manage administrative staff and oversee the brokerage’s daily operations.
• Associate broker: An associate broker may also be called a broker associate or affiliate broker. These brokers work under another broker and generally don’t oversee any other agents, though they do have a broker’s license.

The agents operating within the brokerage will complete real estate transactions and earn a commission. Brokers will then take a share of those commissions according to their contract with the agents under them.

Both Realtors and real estate agents can help ensure a smooth real estate transaction, whether you’re a buyer, seller, landlord or even a renter. Though these two types of professionals are often confused for one another, there are a few important differences to keep in mind when hiring one.