As you’re getting ready to buy a home, you may hear some real estate titles and jargon thrown around. Do you want to work with an agent? Would you like a referral for a REALTOR®? Is there a broker in town? These terms are often used interchangeably, but they’re actually all different entities with different responsibilities. And you may benefit differently, depending on who you decide to work with for your home purchase.
Real Estate Agent
A real estate agent is a licensed real estate professional who helps clients buy or sell homes. Before becoming an agent, they must complete classes and pass a licensing exam in the state they want to work in. Agents must also work under a broker who they share commissions with. There are multiple types of real estate agents:
Buyer’s Agent
A buyer’s agent represents the homebuyer in a real estate transaction.
Listing Agent
A listing agent represents the home seller in a real estate transaction.
Dual Agent
A dual agent represents both the buyer and seller in a real estate transaction.
Responsibilities and Benefits
The real estate agent benefits buyers and sellers in many ways:
- Home Search: Buyer’s agents help homebuyers find their new home. This includes sharing listings from a multiple listing service (MLS), sharing knowledge about the neighborhood they are looking to buy in and informing buyers about what to look for in a home.
- Connect with Buyers: Seller’s agents help find qualified homebuyers and connect them with their clients for a potential sale.
- Negotiate: Buyer’s agents help negotiate prices in relation to the real estate transaction.
- Paperwork: The homebuying process entails a lot of paperwork, and agents are there to help guide their clients through each document.
- Referrals: Agents likely have worked with or have connections to other professionals that may be able to help their clients in a real estate transaction, including lenders, builders or financial advisors.
REALTOR®
A REALTOR® is a real estate professional who is a member of the National Association of REALTORS® (NAR), which is the largest trade association in real estate. A REALTOR® may be a residential or commercial real estate broker, salesperson, property manager or appraiser, and they must adhere to NAR’s Code of Ethics, have an active license, be active in the real estate industry, not have a record of unprofessional conduct and not have filed for bankruptcy.
Responsibilities and Benefits
REALTORS® typically have the same responsibilities as a real estate agent but there are some differentiators that some may find beneficial. REALTORS®:
- Must complete the NAR Code of Ethics training every three years.
- Have access to the local MLS through their local NAR membership.
- Have more education and certification opportunities.
Real Estate Broker
A real estate broker is a real estate agent who owns and manages real estate brokerages or agencies and who has passed the broker exam to become licensed. The broker exam is typically more rigorous than other real estate agent exams and involves more coursework. Although many real estate brokers are also real estate agents, not all of them are both.
Associate Broker
Associate brokers have a broker’s license but work under another broker or brokerage and do not manage other brokers.
Managing Broker
Managing brokers oversee the day-to-day happenings at a brokerage and manage staff.
Principal/Designated Broker
A principal/designated broker oversees all operations and transactions at a brokerage.
Responsibilities and Benefits
A real estate broker generally has all the same responsibilities as a real estate agent, but seller’s brokers can help determine property values for their clients and help the seller during the real estate transaction. In addition, they can:
- Hire agents or brokers to work under them.
- Be a mediator in a legal dispute.
- Move money in and out of an escrow account.
Who Should You Work With?
Who you work with depends on your own personal needs and preferences. Although there’s some overlap in the titles, not all agents are brokers, not all brokers are REALTORS®, not all REALTORS® are agents, etc.
If you’re on the search for a new home in a competitive market, you may want to work with a REALTOR® over an agent because they may have access to properties that an agent doesn’t. If you’re selling your home, you may want to work with a broker who can help you determine the market value of your home.
Work with a Reputable Professional
No matter who you work with, it’s imperative to understand what your own needs are. After determining them, you may have a better picture of what kind of real estate professional you want to work with. Make sure you employ a knowledgeable and dependable person who’s on your side throughout the process.
This information is intended for educational purposes only. Products and interest rates subject to change without notice. Loan products are subject to credit approval and include terms and conditions, fees and other costs. Terms and conditions may apply. Property insurance is required on all loans secured by property. VA loan products are subject to VA eligibility requirements. Adjustable Rate Mortgage (ARM) interest rates and monthly payment are subject to adjustment. Upon submission of a full application, a mortgage banker will review and provide you with the terms, conditions, disclosures, and additional details on the interest rates that apply to your individual situation.
