Differences Between Real Estate Agents and REALTORS
The 17 Ways REALTORS Stand Out From Real Estate Agents
People use the terms REALTOR® and real estate agent interchangeably, but they aren't alike. Not every real estate agent is a REALTOR® and not every REALTOR® is a real estate agent. Although both must be licensed to sell real estate, the main difference between a real estate agent and a REALTOR® is the latter is a member of the National Association of REALTORS®.
A REALTOR® can be a real estate agent, a broker-associate, a managing broker or an exclusive buyer's agent, among a variety of other common terms.
A REALTOR® must subscribe to the REALTOR® Code of Ethics, which includes 17 articles. To many consumers, this is the part that matters. If you're wondering why the Code of Ethics matters to a consumer, read on.
Adopted in 1913, the Code of Ethics is strictly enforced by local real estate boards. The 17 Articles of the Code of Ethics also contains various underlying Standards of Practice. It's not just a bunch of rules that agents swear to uphold and adhere to because their broker made them join the Board. The standards are much more restrictive and confining to conduct than those state guidelines governing agents who simply hold a real estate license.
While there is no evidence nor guarantee that all REALTORS® are morally or ethically better than unaffiliated real estate agents, the Code of Ethics is an attempt by the industry to regulate and, as such, deserves recognition. Keep in mind, of course, that even the non-NAR member "real estate agent" is held to the same legal standard as a practical matter.
Each of the 17 Articles carries weight to a REALTOR® in her everyday business practice, but one article typically stands above the rest. It's the basis for the way a REALTOR® operates. Fortunately, it is the first article, which sets the tone. Nowhere does it state the REALTOR® must be fair to all parties, such as a listing agent dealing with a buyer's agent, but a REALTOR® must be honest.
Above all, however, the Realtor must pledge to put the interests of her clients above her own.
Here are 17 things that a REALTOR® promises to do, which non-affiliates don't:
- Pledge to put the interests of buyers and sellers ahead of their own and to treat all parties honestly.
- Refrain from exaggerating, misrepresenting or concealing material facts about a property; and is obligated to investigate and disclose when situations reasonably warrant.
- Cooperate with other brokers/agents when it's in the best interests of the client to do so.
- Disclose if they represent family members who own or are about to buy real estate, or if they themselves are a principal in a real estate transaction, that they are licensed to sell real estate.
- Avoid providing professional services in a transaction where the agent has a present or contemplated interest without disclosing that interest.
- Not collect any commissions without the seller's knowledge nor accept fees from a third party without the seller's express consent.
- Refuse fees from more than one party without all parties' informed consent.
- Not co-mingle client funds with the agent's own.
- Attempt to ensure that all written documents are easy to understand and will give everybody a copy of what they sign.
- Not discriminate in any fashion for any reason on the basis of race, color, religion, sex, handicap, familial status, sexual orientation, gender identity or national origin.
- Be competent, to conform to standards of practice and to refuse to provide services for which they are unqualified.
- Engage in truth in advertising and marketing.
- Not practice law unless the agent is a lawyer.
- Cooperate if charges are brought against them and present all evidence requested.
- Agree to not bad mouth competition and agree not to file unfounded ethics complaints.
- Not solicit another REALTOR'S® client nor interfere in a contractual relationship.
- Submit to arbitration to settle matters and not seek legal remedies in the judicial system.
The National Association of REALTORS® was founded in 1908 and its members number more than one million. If an agent is not a member, often it's because they don't do enough business to justify the expense of membership.
Full disclosure: Elizabeth Weintraub is a REALTOR®.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.