Realtor Vs. Real Estate Agent: Salaries, Differences & SimilaritiesJul 12, 2023
It is time to officially put the Realtor vs real estate agent debate to rest. Far too many people are inclined to think all real estate agents are Realtors, but the truth is a bit more involved.
According to the latest estimate by the Association of Real Estate License Law Officials (ARELLO), there are more than 3 million active real estate licensees in the United States. At the same time, the National Association of Realtors estimates they have about 1,600,886 members. The number of Realtors is almost half that of licensed real estate agents. The numbers don’t add up—case in point: they aren’t the same.
While the terms "Realtor" and "real estate agent" are often used interchangeably, they possess unique characteristics and qualifications that set them apart. The confusion about their actual distinctions is understandable, as both professionals play essential roles in buying and selling properties, but inherent differences warrant our considerations.
If you've ever wondered about the difference between a Realtor vs real estate agent, or if you're curious about their respective salaries and similarities, this article is here to provide clarity on everything, including:
- What Is A Realtor?
- What Is A Real Estate Agent?
- Realtor Vs. Real Estate Agent: What’s The Difference?
- How Do Real Estate Agents & Realtors Make Money?
- Realtor Vs. Real Estate Agent Salaries
- How To Become A Real Estate Agent
- Should A Real Estate Agent Become A Realtor?
- How Do You Become A Member Of NAR?
- Final Thoughts
Whether you are a potential homebuyer or seller, an aspiring real estate professional, or simply someone who wants to learn the difference between Realtor and a real estate agent, exploring the differences between Realtors vs. real estate agents can empower you to make more informed decisions in an already complex industry.
Ready to start your successful career in real estate? Join Alex Martinez at his FREE training to learn how to get started with house flipping and wholesaling!
What Is A Realtor?
A Realtor is a distinguished type of real estate agent who holds an active membership with the National Association of Realtors (NAR), the largest trade association of its kind in the United States. The NAR is highly regarded for its pristine reputation and serves as a professional barometer for real estate agents nationwide.
To become a Realtor, an active real estate agent must possess a valid real estate license and exhibit a propensity for integrity. Joining the NAR allows real estate agents to enhance their credibility and attract more clients due to the organization's esteemed standing in the industry.
The NAR gives Realtors a reputable status and wields considerable influence in state and federal governments. This influential position enables the NAR to advocate for legal protections and benefits that serve the interests of its members nationwide.
While becoming a Realtor is not a requirement for real estate agents, many choose this path because of its advantages. One key distinction that sets Realtors apart from regular real estate agents is their commitment to a Code of Ethics, which includes 17 additional Articles outlining ethical conduct and professional practices.
NAR Code Of Ethics
Membership with the NAR is a significant responsibility, as Realtors are expected to adhere to a comprehensive Code of Ethics. This Code of Ethics sets forth professional standards that Realtors must uphold, ensuring that consumers can trust and rely on the agents they work with. Approximately half of all real estate agents in the United States have chosen to become certified Realtors, recognizing the benefits and protections that come with this designation.
Here is the Code of Ethics each Realtor agrees to abide by:
- Prioritize clients' best interests and maintain honesty in all dealings with all parties involved.
- Provide accurate and complete information about the property or transaction within the scope of their real estate license, avoiding any exaggeration, misrepresentation, or withholding of facts.
- Collaborate with other brokers when it serves the client's best interest, fostering cooperation within the industry.
- Disclose to the client if they are working with another family member, ensuring transparency and avoiding conflicts of interest.
- Refrain from offering professional services related to a property in which they have a personal interest—unless such interest is disclosed to the client.
- Obtain the client's consent and knowledge before accepting any payment or commission.
- Disclose to all parties involved and seek consent from the client if receiving payments from more than one party in a transaction.
- Keep personal funds and clients' funds separate to ensure financial integrity.
- Clearly and effectively communicate all agreements between parties in a transaction, ensuring understanding and providing each party with a copy of the arrangements.
- Avoid discrimination based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.
- Adhere to professional standards in their real estate discipline and refrain from providing services for which they are unqualified.
- Maintain truthfulness in advertising and marketing materials, providing accurate and honest representations.
- Refrain from practicing law unless authorized to do so, respecting the boundaries of their expertise.
- Present all evidence and cooperate in cases involving charges of unethical practice.
- Avoid making false or misleading statements about other real estate professionals, promoting professionalism and respect within the industry.
- Refrain from interfering in another Realtor's contractual relationships, respecting the business relationships of others.
- Resolve disputes with other Realtors through arbitration rather than litigation, seeking fair resolutions professionally.
What Is A Real Estate Agent?
A real estate agent is a licensed professional who specializes in assisting individuals with buying and selling properties. With their in-depth knowledge of the real estate market, agents play a crucial role in guiding clients through the complex process of property transactions.
Depending on their expertise, real estate agents can work with various properties, including residential and commercial. They may also have specific focuses within the field, such as listing agents who work with sellers to list homes, buyer's agents who help prospective homeowners search for properties or rental agents who assist tenants in finding suitable rental units.
Becoming a real estate agent requires meeting specific licensing requirements and passing a state examination. Although the specific criteria can vary by state, aspiring agents typically complete anywhere from 30 to 90 hours of coursework, providing them with a solid understanding of local, state, and national real estate laws and practices. Additionally, agents must stay updated on their knowledge with continuing education. Doing so is required to renew their licenses every one to two years, depending on the state's regulations.
Once licensed, real estate agents work under the supervision and sponsorship of a brokerage firm, which provides guidance and support throughout their careers.
Read Also: How To Become A Commercial Real Estate Agent
Realtor Vs. Real Estate Agent: What’s The Difference?
When examining the differences between a Realtor vs. real estate agent, it's important to understand their certifications and professional standards. Therefore, let's take this time to dive into the roles and qualifications of each to better grasp the disparity between a real estate agent vs. Realtor.
A real estate agent is an individual who holds a license to assist clients in buying and selling residential or commercial properties. They have completed the necessary requirements and obtained the appropriate license to engage in real estate transactions.
On the other hand, a Realtor is a real estate agent who is an active member of the National Association of Realtors. Being a Realtor signifies that they have chosen to adhere to the standards and Code of Ethics mentioned above.
The term "Realtor" is a trademarked designation used to differentiate real estate agents who are members of the NAR from those who are not. The NAR distinction implies that Realtors are committed to upholding higher professional conduct and ethical practices in their real estate dealings. While real estate agents and Realtors share the same licensing to engage in real estate transactions, the Realtor designation signifies a commitment to a higher standard of professionalism and accountability.
How Do Real Estate Agents & Realtors Make Money?
Real estate agents and Realtors earn their income through commissions from successful real estate transactions. The commission is typically a percentage of the sale price of a property and is divided between the brokers and agents involved in the transaction. Although specific commission percentages may vary, it typically ranges between four and six percent.
It's important to note that while there are alternative payment models where agents may charge a flat fee or work hourly, these approaches are more of an exception than the rule. The prevailing practice involves a commission split between the listing broker and the buyer's representative, often following a 50/50 arrangement.
For instance, if the listing agent procures a six percent listing fee, both the buyer's and seller's agents would typically receive three percent each upon the completion of the transaction.
Realtor Vs. Real Estate Agent Salaries
What about the Realtor vs real estate agent salary debate? The salaries of real estate agents and Realtors can vary based on various factors such as location, property managers, appraisers, sales volume, real estate salesperson, associate broker, managing broker, commission rates, and the local real estate market. Nonetheless, we’ll provide a general overview of the salary ranges for real estate agents and Realtors in the United States to give aspiring professionals an idea of what they may be able to expect.
According to recent data from ZipRecruiter, as of June 23, 2023, the average annual salary for a Real Estate Agent in the United States is approximately $86,356, which translates to around $41.52 per hour. That said, the salary range for real estate agents can vary significantly, with salaries ranging from $65,000 to $100,000. However, the top earners in the field make around $125,000 annually.
For Realtors, the average annual salary is reported to be approximately $78,350, equivalent to about $37.67 per hour. The salary range for Realtors also varies, with salaries ranging from $50,500 to $100,000. The top Realtors make around $134,500 annually.
Salary differences between the two professions are primarily due to home prices in the region, commission rates charged, sales volume, and the commission split with their real estate brokerage. However, Realtors are expected to make slightly more because of their affiliation with the National Association of Realtors.
Start investing in real estate with NO cost to you! Join Alex Martinez at his FREE training to learn how to get started with house flipping and wholesaling.
How To Become A Real Estate Agent
Becoming a real estate agent involves meeting specific requirements and completing the necessary steps to obtain a license. The specific process may vary depending on the state you're in. Still, here is a general guide on becoming a real estate agent:
- Research your state's age and education requirements: Begin by understanding the minimum age and educational qualifications needed to become a real estate agent in your state. These requirements can vary, so make sure you meet the criteria.
- Enroll in approved real estate education courses: Complete the required real estate education courses approved by your state. These courses are typically in-person or online and cover real estate principles, practices, laws, and ethics.
- Apply for the licensing exam: Once you've completed the required education, submit an application and any necessary paperwork to register for the final exam. This exam tests your knowledge of national, state, and local real estate laws, regulations, and practices.
- Take and pass the licensing exam: Prepare for the licensing exam by studying the material covered in the courses. The exam will assess your understanding of real estate principles and laws. Achieve a minimum passing score as determined by your state to pass the exam successfully.
- Gain experience under a licensed real estate broker associate: After passing the licensing exam, you'll need to work under the supervision of someone with a broker license. Years of experience will provide valuable knowledge and mentorship in the field. Find a designated broker to work with and learn from their expertise.
- Apply for your real estate license: Once you have fulfilled the experience requirement set by your state, you can apply for your real estate license. Submit the necessary documents and fees to your state's real estate regulatory authority. Upon approval, you will receive your official license to practice as a real estate agent.
- Continue education and renew certifications: Real estate agents must participate in continuing education courses to renew their licenses periodically. Stay current with real estate industry developments, laws, and regulations by completing the required continuing education credits. Renew your license within the specified timeframe and pay the necessary fees to maintain your licensed real estate agent status.
Remember to consult your state's specific guidelines and licensing board for accurate and detailed information on becoming a real estate agent in your area.
Read Also: Colibri Real Estate Review
Should A Real Estate Agent Become A Realtor?
When considering whether a real estate agent should become a Realtor, there are several factors to weigh. Here are the key points to consider:
- Ethical Standards: Realtors are committed to upholding a strict Code of Ethics established by the National Association of Realtors. This code sets higher standards for professional conduct and promotes integrity, honesty, and fairness in real estate transactions. By becoming a Realtor, agents signal their dedication to these ethical principles, which can enhance their reputation and credibility in the industry.
- Industry Perception: The Realtor designation carries a certain level of prestige and professionalism. Being recognized as a Realtor can convey more trustworthiness and expertise to clients and peers. This perception can impact an agent's business positively, leading to more opportunities and referrals.
- Access to Resources & Networking: Realtor membership grants access to a wide range of resources, educational opportunities, other real estate agents, and industry events provided by the NAR (beyond the Multiple Listing Service). These resources can help agents stay updated on market trends, best practices, and legal changes, enabling them to serve their clients better.
- Financial Considerations: It's crucial to weigh the financial aspects of becoming a Realtor. Membership in the NAR comes with annual dues, which can vary depending on the local association and market. Agents should evaluate the cost of membership and determine whether the benefits and resources provided by the NAR justify the financial investment.
Ultimately, deciding to become a Realtor should be based on individual preferences, goals, and values. Assessing the potential benefits, costs, and alignment with ethical standards can help agents determine whether pursuing a Realtor membership is the right choice for their professional path.
Read Also: How To Get MLS Access: The (Ultimate) Guide
How Do You Become A Member Of NAR?
Becoming a National Association of Realtors member involves a specific process and particular requirements. Here are the essential steps to join the NAR:
- Join a local real estate association: To become a NAR member, aspiring Realtors must first join a local real estate association.
- Find a local chapter of the NAR: Begin by identifying and joining the local chapter in your state. These local associations are affiliated with the NAR and serve as the entry point for membership.
- Submit a membership application: Once you have selected a local association, complete the membership application provided by the association. The application may require personal information, proof of a valid real estate license, and details about your involvement in the real estate business.
- Pay membership dues: Membership in the NAR involves paying annual dues, which vary based on the local association and market. Upon approval of your membership application by the Board of Directors, you must pay the prorated membership dues.
- Adhere to the Code of Ethics: As a member of the NAR, you must adhere to the organization's Code of Ethics; this entails taking and passing an online course on the Code of Ethics, which outlines the ethical standards and professional conduct expected of Realtors. The pre-licensing course ensures that members are aware of their obligations and responsibilities.
- Practice ethical standards: Throughout your career as a Realtor, it is essential to adhere to the NAR's standards of practice and uphold the Code of Ethics; this includes conducting business with honesty, integrity, and professionalism.
- Continuing education: To maintain your Realtor membership, you may be required to engage in continuing education courses periodically. These courses help you stay updated on industry developments, enhance your skills, and demonstrate your commitment to ongoing professional growth.
By following these steps and meeting the requirements set by the NAR and your local association, you can become a National Association of Realtors member and enjoy the benefits and privileges of a Realtor membership.
What is the difference between real estate agent and Realtor? While both real estate agents and Realtors play essential roles in the housing sector, their differences lie in two key areas: membership and adherence to NAR's ethical standards. Due to their similarities, however, both can earn attractive incomes through real estate commissions, and aspiring professionals should carefully weigh their options based on career goals, state requirements, and personal preferences.
Do you have a side in the Realtor vs real estate agent debate? At Real Estate Skills, our team of experts is ready to provide the tools you need to make your own decision. We're committed to providing the knowledge, resources, and support you need to understand the difference between real estate agent and Realtor, and how it can benefit your career in the housing sector.