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Difference Between a REALTOR and a Real Estate Agent

Difference Between a REALTOR and a Real Estate Agent

What's the difference between a REALTOR and a regular real estate agent? Many real estate students working toward their real estate license wonder about the distinction. It's a common source of confusion for those not already embedded in the industry, and the terms are often used interchangeably outside it, which adds to the confusion. Is it an important difference? Is one better than the other? Keep reading to learn about the differences between these two types of real estate professionals and why it matters.

What is a REALTOR®?

Real estate agents and REALTORS® are both licensed real estate professionals who have gone through an intensive educational process to learn the legal, financial, and regulatory requirements of the process. A real estate agent has finished this education and licensing process through the state. However, becoming a REALTOR® requires additional steps, which can add to the time required to achieve the designation beyond what is required to become a real estate agent, and both can buy and sell homes for their clients.

A REALTOR® is an active member of the National Association of REALTORS®, a national organization that oversees real estate professionals and provides industry guidance. To become an active member of the National Association of REALTORS®, a real estate agent must have an active license and a record of professional conduct. They are also required to agree to a code of ethics from the organization. Because a high level of dedication is needed, it's estimated that half of all real estate agents have achieved this designation.

What is the National Association of REALTORS®?

Founded in Chicago in 1908, the National Association of REALTORS® started its life as the National Association of Real Estate Exchanges with 120 members, 19 Boards, and one state-wide organization. It was started with the idea "to unite the real estate men of America for the purpose of effectively exerting a combined influence upon matters affecting real estate interests." The association has held annual conferences in different cities around the country every year since that point.

Within five years, in 1913, the Association adopted its Code of Ethics, including its Golden Rule, "Whatsoever ye would that others should do to you, do ye even so to them." In 1916, the Association changed its name to the National Association of Real Estate Boards, and at the same time, the designation of REALTOR® was created. Finally, in 1972, the organization's name was changed to the National Association of REALTORS®.

The designation of REALTOR® is capitalized because it has been registered as a trademark by the National Association of REALTORS® to show which real estate agents have passed their stringent requirements for active membership within the organization. The term was coined by Charles Chadbourne, the head of the Minneapolis Board, in 1916. The prevalence of Latin in Victorian education inspired him to combine the English real, from real estate, with the Latin -tor, a suffix indicating an individual who does something, such as a protector, actor, or creator.


Realtor Code of Ethics


The REALTOR® Code of Ethics

Though the original REALTOR® Code of Ethics is now over 100 years old, it focuses on timeless concepts of integrity and business ethics. However, as times have changed, the Association makes regular changes to update business practices, communications, consumer preferences, and technology. The current Code of Ethics includes a preamble and 17 articles to discuss a wide range of ethical topics, including those dealing with clients or customers, the general public, and other REALTORS®.

The Code, in many circumstances, holds the REALTOR® to a higher standard. However, in circumstances where the Code of Ethics and the law conflict, the law will always supersede the Code of Ethics, preventing intrusion into the legal realm. That being said, the prevalence of the organization throughout the real estate sector means that it also has a strong voice in determining policy, regulations, and laws that are passed. This helps keep the Code of Ethics in line with or at a higher standard than federal laws.

Are REALTORS® Better than Real Estate Agents?

Though all real estate agents try to protect their professional reputation, REALTORS® have additional requirements with the designation showcasing verification of their integrity, trustworthiness, and ethical behavior. Because of this designation, some clients, customers, and businesses prefer to work with a REALTOR®, so they know they will receive this verified level of service and integrity in their business dealings. They know that this designation is hard-won and will be protected by continuing their record of impeccable professional behavior for many years to come, providing additional reassurance that the REALTOR® will work hard to ensure their business is handled ethically.

However, that doesn't mean that a real estate agent that has not yet become or does not wish to become a REALTOR® is not worthy of trust. Most states require a background check on top of extensive education and examination before licensing. The licensing process itself ties the new agent to their business, with significant consequences if the real estate agent works outside what they have been taught and agreed to in standardized real estate practices. New real estate agents may not have sufficient work and customer history to document their professional conduct, requiring them to work as real estate agents before pursuing the REALTOR® designation.

Understanding the differences between a real estate agent and a REALTOR® provides an automatic indication of the real estate professional's experience, integrity, and reputation when handling a real estate transaction, whether the customer is buying or selling. Real estate agents can still find plenty of work without becoming a REALTOR®, but many find that the time and effort involved in the process can provide certain rewards. When considering a real estate career, this knowledge provides an understanding of the education and experience of other real estate professionals.


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