What's the Difference: Real Estate Brokers, Agents, and Realtors What's the Difference: Real Estate Brokers, Agents, and Realtors
If you're thinking about buying or selling a home, you've probably heard one or more of these terms already -- real estate broker, real estate agent, and realtor. But what's the difference? While each of these real estate professionals provide services to support real estate transactions, there are important distinctions to be aware of before you start the process of buying or selling a home.
Below, we'll dive into what each of these professionals do, their qualifications, and the differences between them to provide a more complete understanding of how they fit into the homebuying landscape.
What is a Real Estate Agent?
Real estate agents work with both buyers and sellers, performing several services throughout the homebuying and selling processes depending on which side of the transaction they are working on.
An agent who is working with homebuyers is known as a buyer's agent. Buyer's agents work with homebuyers to find properties that align with the buyer’s homeownership goals (price range, location, desired features, etc.). They will assist buyers in submitting offers, negotiating with seller’s agent, act as an intermediary with the seller's agent, help set a closing date, and provide general guidance until closing on things like the appraisal process and home inspection.
Real estate agents working with sellers are known as seller's or listing agents. Listing agents help sellers set the price for their home, help prepare the home for sale, put the home on the market through the Multiple Listing Service (MLS), host open houses, interact with interested buyers and their agents, and suggest any price adjustments to the home based on potential interest from buyers. Once an offer is made, a seller's agent will negotiate with the buyer's agent, help set the closing date, and provide guidance leading up the closing like home inspections.
What is a Real Estate Broker?
If a real estate agent continues their professional development, they can receive a real estate broker's license from the state in which they operate. Brokers can work independently to start their own real estate brokerage and hire other real estate agents to work for them.
In terms of the services that they offer homebuyers and sellers, real estate brokers are similar to real estate agents. Brokers who work with homebuyers help their clients find suitable properties that meet their criteria, help with submitting offers, negotiate with the buyer’s agent, and assist with all of the details that go into closing. Brokers who work with sellers help their clients set the price of their home, list the property with MLS, conduct open houses, negotiate with prospective buyers’ agents, and help their clients prepare for closing.
Becoming a real estate broker provides different career paths. There are associate brokers who obtain a real estate broker license but work on behalf of a more experienced broker and don't supervise other agents, managing brokers who supervise brokerage offices including daily operations and staff management, and principal brokers (also known as designated brokers) who work to ensure real estate agents comply with federal and state real estate law. Broker owners own real estate brokerages and employ other brokers and agents to work directly with homebuyers and sellers on their behalf. If you're buying or selling a home, you may interact with one or more of these types of real estate brokers, and it can be helpful to know the distinctions between each.
What is a Realtor?
While the term "realtor" is commonly used interchangeably with "real estate agent", there is an important difference to note between the two. A realtor is a real estate professional who has membership with the National Association of Realtors, also known as NAR, which is the preeminent trade organization for real estate professionals. The term "realtor" can encompass a variety of professionals including residential real estate brokers, commercial real estate brokers, licensed real estate agents, property managers, appraisers, sales agents, and property managers. To become a realtor, professionals must have an active real estate license, currently be working in the real estate business, have no record of unprofessional conduct, never have filed for bankruptcy, and be a member of one of NAR's local associations.
Banking Services for Real Estate Broker Owners
Real estate broker owners require unique, innovative banking solutions to meet the needs of their businesses. Real estate is the foundation of Leader Bank, and as the #1 home purchase lender among Massachusetts banks, our team is committed to supporting the industry with tailored banking solutions specifically for real estate brokerages.
