What is a REALTOR®…
Whether you want to buy or sell a home, you’ll want some help. So who should you hire? Real estate professionals go by various names, including real estate agent, real estate broker, or REALTOR®. So what’s the difference between a REALTOR®, real estate agent, and broker? Sometimes these titles are used interchangeably, but rest assured, there are some important differences, as well as varying requirements for using particular titles. Here’s a rundown of the real estate professional titles you’ll come across, and what they mean.
Difference between a real estate agent and broker:
What is a real estate agent?
A real estate agent is someone who has a professional license to help people buy, sell, or rent all sorts of housing and real estate. To get that license, Wisconsin requires individuals to have 72 hours of pre-license training. Once that training is done, aspiring agents take a written licensing exam. This exam is typically divided into two portions: one on federal real estate laws and general real estate principles, and the second on state-specific laws. Once they pass their exam, they’ve earned a license, the title of a “real estate agent (salesperson),” and they might join a brokerage where they can begin working with home buyers, sellers, and renters.
Broker vs. REALTOR®
A real estate broker is someone who has taken education beyond the agent level as required by state laws and passed a broker’s license exam. Additionally, Wisconsin requires candidates have at least of two years experience as a licensed “salesperson” and have a minimum of 8 closed transactions or other combinations of representing clients. The extra coursework covers topics such as ethics, contracts trust funds, and management—at a more in-depth level than what’s taught in a real estate agent pre-licensing course.
Prospective brokers also learn about real estate legal issues and how the law applies to operating a brokerage, real estate investments, construction, and property management. As a result, brokers are prepared to oversee a brokerage and manage salespersons.
There are three types of real estate brokers, each with subtle differences in the role they perform:
- Managing broker: Each real estate office has a managing broker or sometimes referred to as designated broker. This person oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. This person also oversees the day-to-day operation and transactions of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff.
- Associate broker: This real estate professional—sometimes called a broker associate, broker-salesperson, or affiliate broker—has a broker’s license but is working under a managing broker. This person typically is not responsible for supervising other agents.
So all agents are REALTORS®?
In order to become a REALTOR®—a licensed agent with the ability to use that widely respected title—an agent needs to be a member of the National Association of REALTOR®. As a member, a person subscribes to the standards of the association and its code of ethics.
Essentially, the NAR holds members to a higher, more respected standard. Membership in the NAR also comes with access to real estate market data and transaction management services, among other benefits. REALTORS® belong to not only the National Association but also the Wisconsin REALTOR® Association and our local board.
Listing agent
A listing agent is a real estate agent who represents a home seller. These professionals help clients who are selling with a wide range of tasks, including pricing their home, recommending home improvements or staging, marketing their home, holding open houses, coordinating showings with home buyers, negotiating with buyers, and overseeing the home inspection process and closing procedures.
Buyer’s agent
True to their name, buyer’s agents represent home buyers and assist their clients through every step of the home-buying process, including finding the right home, negotiating an offer, recommending other professionals (e.g., mortgage brokers, insurance agents, settlement companies), and troubleshooting problems (e.g., home inspection or appraisal issues).
Fortunately for home buyers, they don’t need to worry about the expense of hiring a buyer’s agent. Why? Because the seller usually pays the commission for both the seller’s agent and the buyer’s agent from the listing agent’s fee.
Rental agent
In addition to helping people buy and sell homes, some real estate professionals help consumers find properties to rent. But what these agents do depends on the location—whether it’s a large city or a small town—and the agent.
Sometimes a rental agent will guide your search from the very start, helping you find the right neighborhood, apartment size, and price range, and then go with you to open houses. More likely, though, you’ll already have a lot of that information decided, and the agent will send you listings that might be of interest to you. Once you’ve decided on a rental and have been approved by the landlord or management company, your agent should help you read and understand your lease. As a general rule, a reputable agent will NEVER ask you to send any type of payment without seeing a unit first. If you come across this type of situation online, it is most likely too good to be true.