The Difference Between a Real Estate Agent Versus a Broker Versus a Realtor

written by Jennifer Chiongbian
MORTGAGE EXPERT
12 · 20 · 20
Real Estate Agents

real estate agent, broker, or Realtor™ all have one goal, to bring buyer and seller together to close a real estate transaction.

All three have the same fiduciary responsibilities to their client, which is the party they are representing. 

The six duties are:

  • Accounting: No comingling of funds and must account for all monies
  • Care: Execute their responsibilities to the best of their abilities
  • Confidentiality – Guard any confidential information, especially if it is damaging to the client’s negotiating position
  • Disclosure- Inform the client of any information that is beneficial to the client
  • Loyalty: Puts the client’s interests above their self-interest.
  • Obedience- Obey any lawful orders that the client wants to be executed.

Real Estate Agent/ Real Estate Salesperson

A real estate agent or real estate salesperson is a state assigned designation. It is when a real estate professional has passed all state requirements and is considered licensed.

This person has to hang their license with a real estate broker and cannot own or operate their own real estate agency. They are in effect, employed by the broker on record for the agency. Think of your typical large franchise names.

They are engaged to carry out services associated with any real estate transaction but under a broker.

Real Estate Broker 

A real estate broker can own and operate his or her own office and hire real estate agents or real estate salespersons to work for them.

They have undergone real estate broker exams and have amassed a certain number of points with the department of State to qualify for this designation. It requires more in-depth coursework and experience than the pre-licensing exam, giving you a real estate salesperson or agent designation. These are state designations provided by the Department of State.

  • The principal or Designated Broker: Has agents to manage and supervise under them and has executive decision-making powers. They oversee licensee compliance to the State and national real estate laws.

 

  • Associate Broker: Does not manage any licensees under them and has no decision-making powers. But has the same level of expertise and experience as the principal or designated broker, but chooses a non-managerial role.

Realtor™

This is the largest trade member association in the U.S. It is a trademarked term for a real estate licensee who is an active paying member.

A Realtor can be a real estate principal or designated broker, an associate broker, or a real estate salesperson. You cannot be a Realtor if your Department of State does not license you.

For example, in Las Vegas, you cannot join the multiple listing service (MLS) without joining the National Association of Realtors (NAR). The MLS is the largest database where buyers and sellers come together and transact cooperation for compensation between real estate brokers. 

In the borough of Manhattan, New York, for instance, there is no Realtor designation because there is no multiple listing service operated by the National Association of Realtors. There is an MLS system but not monopolized by the National Association of Realtors.

 

Author

Jennifer Chiongbian

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