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

When I write articles on this site I refer to real estate agents and Realtors often. Many people feel that a real estate agent and a Realtor are the same thing, however there are some big differences. If you are a home buyer or home seller, there will be a difference in the ethical responsibility of a Realtor versus a real estate agent. There are also many differences for the agents and Realtors themselves on whether they choose to be a Realtor or stay a real estate agent. Realtors generally have more ethical responsibilities than real estate agents, but does that really make a difference to a buyer or seller? I used to be a Realtor for 14 years, but I recently became just a real estate agent.

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Why would a real estate agent want to be a Realtor?

Being a real estate agent involves getting licensed in the state you want to work in and hanging your license with a broker. There are 1,150,141 Realtors as of March 25, 2016, out of about 2,500,000 real estate agents. About half of all agents are Realtors. Being a Realtor comes with many perks besides just being able to say you are a Realtor. Many MLS boards require their members be a Realtor to gain access to the MLS or charge more for those who are not Realtors.

Being a Realtor also gives you access to many organizations.

  • NAR: National Association of Realtors.
  • State Board of Realtors: Most states have a state board of Realtors.
  • Local Board of Realtors: Most areas have a local board of Realtors specific to your market location.

I am in Northern Colorado, and used to belong to CAR (Colorado Association of Realtors) and GARA (Greeley Area Realtor Association). When I was a member of those boards, I could attend local meetings, luncheons, classes and charity events put on by those boards. I could also run for leadership roles on those boards.

Here is a great site that can help you get your real estate license.

How much does it cost to become a Realtor?

One drawback to becoming a Realtor is it is more expensive as opposed to a real estate agent. Here are the breakdown of fees I pay for various boards. These will vary on the board you belong to and the state you are in.

  • NAR:   $120 per year
  • NAR:   $35 special assessment per year
  • CAR:    $165 per year
  • GARA: $209.17 per year
  • Total:   $519.17

These fees are separate from any MLS dues and fees that must be paid. As you can see, it is expensive to become a Realtor, and I also pay for the agents on my team to be Realtors as well so it costs me thousands of dollars a year. This is one reason I am no longer a Realtor.

Here is a great article with more information on what it costs to become a real estate agent.

Why would buyers and sellers prefer to work with a Realtor?

Realtors are also supposed to be held to a higher level of ethics.

Below are the pledges a Realtor makes, that a real estate agent is not required to make:

  • Pledge to put the interests of buyers and sellers ahead of their own and to treat all parties honestly.
  • Shall refrain from exaggerating, misrepresenting or concealing material facts; and is obligated to investigate and disclose when situations reasonably warrant.
  • Shall cooperate with other brokers / agents when it is in the best interests of the client to do so.
  • Have a duty to disclose if they represent family members who own or are about to buy real estate, or if they themselves are a principal in a real estate transaction, that they are licensed to sell real estate.
  • Shall not provide professional services in a transaction where the agent has a present or contemplated interest without disclosing that interest.
  • Shall not collect any commissions without the seller’s knowledge nor accept fees from a third-party without the seller’s express consent.
  • Shall refuse fees from more than one party without all parties’ informed consent.
  • Shall not co-mingle client funds with their own.
  • Shall attempt to ensure that all written documents are easy to understand and will give everybody a copy of what they sign.
  • Shall not discriminate in any fashion for any reason on the basis of race, color, religion, sex, handicap, familial status, or national origin.
  • Expects agents to be competent, to conform to standards of practice and to refuse to provide services for which they are unqualified.
  • Must engage in truth in advertising.
  • Shall not practice law unless they are a lawyer.
  • Shall cooperate if charges are brought against them and present all evidence requested.
  • Agree not to bad mouth competition and agree not to file unfounded ethics complaints.
  • Shall not solicit another REALTOR’S client nor interfere in a contractual relationship.
  • Shall submit to arbitration to settle matters and not seek legal remedies in the judicial system.

Realtors are able to market themselves as abiding by these standards, where real estate agents may not have to abide by these standards (depending on state laws). In my experience I have seen many Realtors and real estate agents not be ethical. In my experience I have not seen a difference in one or the other being more ethical. When we have had problems with Realtors being unethical the boards did not do much to help us out.

While Realtors can advertise that they are held to a higher level than just agents, I do not think it makes much difference to a buyer or seller.

Why you should always use a real estate agent.

Why did I stop being a Realtor?

I was a Realtor for almost 15 years, but this year (2016) I dropped my membership. Being a Realtor was costing me thousands of dollars a year, but was not giving me much benefit. Most buyers and sellers do not care if I am a Realtor and I had a few issues with how NAR handled some issues. My primary business is listing foreclosures for banks. I worked really hard to build my business with banks and REO companies. I worked for years to build relationships and do an awesome job. I built by business up to where I was selling 200 homes a year. A few years ago NAR decided that REO brokers like myself had too much business and that every agent should be able list REO homes without putting the work in. NAR lobbied to force banks and REO companies to include more agents and take business away from the existing agents. That did not sit well with me and I have thought a few other decisions they have made have been questionable.

Conclusion

Becoming a real estate agent is not cheap, it takes money to get your licenses, insurance, and you may have to pay part of your commissions to a broker. Becoming a Realtor is even more expensive, and I do not see a huge advantage in becoming a Realtor.

For more information on what it takes to be an agent, how to make money as an agent and how to be one of the most successful agents, check out my book How to Make it Big in Real Estate, from a Millionaire Agent.

12 thoughts on “What is the Difference Between a Realtor and a Real Estate Agent?”

  1. Those code of ethics that realtors pledge too, are already standard ethics in the industry. What happens when you develop an agency? Are you not bound by Real Estate Commission to have the best interest of your clients. And disclosure of an agent owned property in the transaction is already required. So I don’t see the benefit of paying 600 dollars a year to a board that will do nothing for me. My firm and most firms out there have attorneys that work full time in the brokerage, to answer all questions. I don’t need to waste time going to seminars, while I could be prospecting. And I have access to ReColorado, the access any realtor has is no different, the only thing is I paid 75 dollar initial set up fee. I put the 600 towers marketing. And none of clients care that I’m not a realtor, along as I meet their standard of service.

  2. Many thanks for explaining the difference between a realtor and a real estate agent on this article, Hopefully people would find very useful information from this post. Keep sharing this type of an informative blog.

  3. FYI as I learned the hard way by a stern phone call…. If you have not completed your indoc class with the association you are with don’t use the word Realtor on your advertising or website.

    I was building my site and used Realtor before my class was finished and they call me to inform me that I wasn’t a full Realtor yet.

    Just some advise so you don’t get in trouble.

  4. Realtors are in no way better then Real Estate Brokers. It is a person to a person that makes a difference. I have access to everything a Realtor does . The only difference is that I do not support a lobby organization that works for Realtors, NOT THE BUYERS AND SELLERS OF REAL ESTATE!

    • I agree that no one is better than someone else. But, the more tools you have, the more successful you can be. It is not true that you have access to everything a Realtor does. I do not know about your MLS, but you cannot attend board meetings or advertise that you are a Realtor

  5. Here is something to think about if you are a real estate agent that is not a REALTOR.

    As a REALTOR, I have attended seminars taught by attorneys on the subject real estate broker/agent liability. The point that was made is that in a courts, judges often look to the ethics and moral code prescribed by the National Association of REALTORS (NAR) to be an industry “standard of care” to which all agents are measured in determining accountability. In the courts, as a defendant, this “standard of care” will apply to a broker/agent irrespective of their association with NAR or not. Ignorance of the professional code of conduct, that has been recognized for over 100 years, is a weak defense at best!

  6. To get access to any residential online listings you need MLS…to get MLS you need to be a REALTOR… They are essentially a monopoly over internet listings.

    REALTORs are simply people who have to pay money in order to actually function as a Real Estate Salesperson. Most people never interact with the monopoly except to pay their fee once a year. Just a huge waste of money really.

    • Well, the Realtors create the MLS, so it makes sense they would charge for people to use something they created. People can have access to public records, but it is nearly impossible to tell what kind of sales and what houses were like from just a price. Realtor’s created a system to be able to value homes. Car dealers have a similar system where they can see sale prices of cars, that the general public cannot.

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