Navigating the real estate industry can be confusing, especially when you hear terms like agent, broker, and REALTOR® used interchangeably. We’ll explain the key differences among these roles and what this means for your real estate business.
Key takeaways
- Real estate agent: A professional who has passed their state real estate exam and holds a valid sales agent license to help clients buy or sell property.
- REALTOR® designation: A licensed agent who also holds an active NAR membership and adheres to a strict code of ethics.
- Broker license: A professional who has completed additional training and licensing to manage their own real estate brokerage and oversee other agents.
- Code of Ethics: A mandatory set of rules for REALTORS® that guarantees fair treatment and honesty for all clients.
- Continuing education: A requirement for agents and REALTORS® to keep their skills sharp and maintain their active professional license.
Quick definitions: real estate agent vs broker vs REALTOR®
Understanding the hierarchy of real estate professionals helps you know exactly who you are working with or what career path you want to take.
Each title requires a different level of education and commitment.
Real estate agent
To become a real estate agent, you must complete a state-approved pre-licensing course, pass a licensing exam, and submit an application to your state’s real estate commission, which typically includes a background check.
This professional license enables you to help people buy, sell, or rent residential or commercial real estate. Agents must work under the supervision of a sponsoring broker to conduct business legally.
Real estate broker
A broker is someone who has taken their career a step further by earning a broker license. This requires extra education and passing a more difficult exam.
Brokers can work independently, hire other sales agents, and manage a real estate brokerage. You might also hear the term associate brokers, which refers to people with a broker license who choose to work under another managing broker.
REALTOR®
A REALTOR® is a licensed agent or broker who has chosen to join the National Association of Realtors® (NAR). By paying annual dues and joining their local board, they earn the REALTOR® designation. They also gain access to exclusive NAR benefits, such as networking opportunities, marketing materials, and the REALTOR® logo.
What being a REALTOR® signals to the public
While all licensed agents are bound by state laws and regulations designed to protect consumers, the REALTOR® title signals an additional layer of accountability. This designation shows clients that you voluntarily subscribe to a nationally recognized Code of Ethics, reinforcing your commitment to their best interests.
For many buyers and sellers, this provides extra peace of mind, as they know their representative is accountable not only to the state but also to a prominent national organization.
The Code of Ethics in plain English
The NAR Code of Ethics is the core framework that separates a REALTOR® from a standard real estate agent. It outlines strict rules for how professionals must treat their clients and the public.
The Code of Ethics is broken down into clear standards of practice. Here are the main areas it covers:
- Duties to clients and customers: You must protect your client’s best interests while treating all parties honestly.
- Duties to the public: You cannot provide false or misleading advertising.
- Duties to other REALTORS®: You must refrain from making false statements about other real estate professionals and respect their exclusive representation agreements.
Who typically needs the ethics requirement and how often?
Staying compliant with ethical standards is a crucial part of maintaining your active status as a REALTOR®.
To keep your NAR membership in good standing, you must complete mandatory ethics training. The NAR requires all members to complete an approved Code of Ethics course every three years. If you fail to meet this requirement by the deadline, your membership and MLS access could be suspended. This means that you would not access or add to the database of homes for sale.
The easiest way to complete it
When evaluating your training options, look for a provider that bundles your state CE requirements with your ethics training.
A great real estate school will offer:
- Courses that explicitly meet the NAR Code of Ethics requirement
- Flexible online formats so you can study at your own pace
- Membership plans that give you access to all your required hours for one price
- Additional professional development content like webinars, checklists, and transaction management guides
FAQs
Clients often ask questions about titles and responsibilities when they start their property journey. Here are the most common questions and how to answer them clearly.
1. Are all real estate agents REALTORS®?
No. All REALTORS® are licensed real estate agents, but not all real estate agents are REALTORS®. A REALTOR® must be an active member of the National Association of REALTORS®.
2. Do REALTORS® get paid a higher average salary?
Real estate professionals, including REALTORS®, don’t receive a salary. Instead, their income is based on commissions from closed sales. This means earnings can vary widely depending on experience, local market conditions, and the number of transactions completed.
3. What does MLS access mean?
The Multiple Listing Service (MLS) is a private database created by real estate professionals to share information about properties for sale. Agents use this tool to find homes for buyers and advertise listings for sellers.
4. Do I have to pay extra to use a REALTOR®?
No. Choosing to work with a REALTOR® versus a non-member real estate agent does not mean you will pay extra. A REALTOR®’s compensation follows the same commission structure as any other real estate agent. Commissions are negotiated between the client and their agent.
5. Can a REALTOR® help me with commercial real estate?
Yes. Many real estate agents and REALTORS® specialize in commercial properties, while others focus on residential real estate or work as property managers and real estate counselors.
6. What happens if an agent violates the Code of Ethics?
If a REALTOR® violates the standards of practice, a client or colleague can file a complaint with the local board. The board will review the case and can issue fines or suspend the agent’s membership.
Complete your NAR Code of Ethics requirement and protect your reputation
Real estate continuing education should help you grow your business and increase your credibility. With a McKissock CE Membership, you gain unlimited access to state-approved continuing education courses, including your mandatory ethics training.
Take the guesswork out of your renewal process. You can complete your NAR Code of Ethics requirement and your state CE hours with one simple package. Our membership also provides exclusive tools, scripts, and career-advancing resources designed to help you stay competitive. Visit McKissock Learning today to enroll in your ethics course and secure your professional reputation.
