Whether you’re buying or selling a home, it’s essential to have a trained professional on your side.
Real estate professionals have a variety of titles. They might be called an agent, or a broker, or a realtor, and although many people think these terms are interchangeable, each one is quite different.
Before you choose who the right professional is to represent you in your home buying (or selling) journey, you’ll want to understand the differences between a real estate agent, a broker, and a realtor.
Real Estate Agent
A real estate agent is a general term for anyone who is licensed to help people buy, sell or rent any kind of housing or real estate.
Most states require that an individual complete a certain number of hours of pre-licensing training to become a licensed real estate agent. The number of hours can differ drastically from state to state. In New York, for example, an individual can obtain a real estate license after only 75 hours of pre-licensing training, while in California a minimum of 135 hours is required.
After completing the training period, potential agents are required to pass a written licensing exam that covers federal real estate law, general real estate principles, and state-specific real estate laws. Upon passing said exam, the individual is given the title of real estate agent and is legally allowed to begin working independently with home buyers, sellers, and renters.
Real estate agents can either represent the seller – which would give them the title of listing agent – or the buyer, in which case they would be called a buyer’s agent.
Real Estate Broker
Real estate brokers have taken their education above and beyond the minimum training required by their home state and have passed a broker’s licensing exam, which goes further in-depth into the world of real estate. In Long Island, an additional 45-hour state-approved, real estate broker course is required after the 75-hour agent course.
A broker’s education goes in-depth into topics such as tax law, insurance, contracts and ethics in real estate, and various other topics that are covered on the agent’s exam on a more superficial level.
Brokers are also obligated to learn about real estate law, potential legal issues, and how both federal and state laws apply to real estate investments, property management, and construction.
This in-depth training gives real estate brokers a more holistic knowledge of the real estate business, meaning that the information they can offer a potential client is more complete.
However, you can’t become a broker right out of the gate. Real estate professionals are required to have a certain amount of experience under their belt as an agent to be eligible to sit for a broker’s exam. In Long Island, a broker must have at least two years of experience as a licensed real estate salesperson or at least three years of experience in the general real estate field.
Once licensed, brokers have the option to take on a myriad of different roles inside of their agency’s structure.
A Principal or Designated Broker supervises and often mentors the real estate agents in their firm and are frequently paid based on the sales commissions of the agents they manage. A managing broker oversees the day to day activities of the office, and typically have a more administrative role, while an Associate Broker works under a managing broker and is rarely responsible for supervising agents.
Becoming a Realtor requires that the agent be a member of the National Association of Realtors ®. The title of Realtor is widely respected in the industry, as Realtors are required to subscribe to a strict code of ethics and maintain specific professional standards. NAR members also have access to real estate market data and transaction management services, among other benefits.
Once you know what type of agent you’re looking for, search for one that you can trust via recommendations from friends or online professional websites. Every agent is different, so you’ll want to speak to at least three to make sure you’re finding the right fit for your real estate needs.