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Differences Among Agent, REALTOR, Broker

Titles for real estate professionals could be confusing when you are entering the market fir the time as a buyer or seller.   Some consumers use them without knowing what they mean and sometimes lead to more confusion and different expectations for both sides.  It’s not consumers’ faults, it’s just the nature of the real estate industry that makes things more complicated than necessary.[1]

First of all, the real estate profession is regulated by state governments, not national government.  Most state laws related to real estate are usually found in the state constitution.  Each state has its own ways of how the state lawmakers see the profession should be practiced[2].

Below is a brief discussion of the differences among agent/REALTOR®/broker.  These are the most common titles in public.

Real estate agent/salesperson:

These terms are used interchangeably but have the same meaning.  An agent is someone who has taken all required real estate classes and passed the licensing exam in the state in which s/he wants to work.  State requirements of those classes vary.  In Arizona the license requirement for an agent is 90 class hours.  The exam includes both national and Arizona-specific sections.

Anyone who’s got licensed can’t just work on his or her own.  The licensee has to “hang license” with a licensed real estate broker.

REALTOR®:

A real estate professional/agent who is a member of the National Association of REALTORS® (NAR).  Being a member of NAR, the real estate professional agrees to uphold its professional standards and code of ethics.  (The word “REALTOR®” is a trademark term and is supposed to be in all caps in all uses).

Real estate broker:

A real estate agent who has continued his education past the real estate agent level and fulfilled the broker education and licensing requirements.  In Arizona, agent has to take additional 90 hours of education and pass the broker exam, which (similar to exam to become licensed agent) contains both national and Arizona-specific sections.

Also in Arizona, before being licensed as a real estate broker the agent has to work at least three years (as an agent) under a supervision of a broker.

Real estate brokers can work on their own (as independent agents) (have their own clients) or hire other agents working for them.  They bear ultimate responsibilities for the actions of the real estate agents under their supervision.

Associate broker: a professional who has fulfilled all requirements of being a broker, but chooses to work for another broker.

Designated broker: the “ultimate” broker of the firm.  The title “designated” is only reserved for someone who is ultimately responsible for ALL actions of the firm.  A designated broker is usually the owner of the firm.  Each firm can have multiple associate brokers, but has only one designated broker.

There are agents who have more years of experience than their brokers’, or agents who just want to get licensed to buy houses for friends or relatives and work weekends, or agents who are committed to a full-time career in real estate, or agents who work for large national real estate firms, or agents with multiple credentials (attached to their names), etc. What counts is what that agent could do to help his/her client achieve the client’s goals.

Regardless of a title attached to a name, real estate is essentially and ultimately a service profession.  Whoever provides the best customer service and stay within the legal boundary of the laws will certainly enjoy the trust of the clients and their business.

 

[1] A more thorough discussion of all the certifications is on National Association of REALTORS https://www.nar.realtor/designations-and-certifications

[2] For example, in Arizona all purchase offers don’t need to be drafted by real estate attorneys.

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