In order to choose the best type of real estate professional for yourself, here is what you need to know.
The process of buying or selling your home is a complex one; for that reason, you should hire a real estate expert who will help you and guide you through the experience. By hiring a professional, you can avoid a major headache involved in buying/selling a home.
However, if you are not an expert in the field, you might feel overwhelmed right at the beginning. Even searching for potential agents can feel like a nightmare. That’s why you should understand the differences between a real estate agent, a broker, and a Realtor.
Also, once you understand the differences between the titles, you should be able to determine whether hiring one type of agent over the other will prove to be advantageous for you or not.
Real Estate Agent
Simply put, a real estate agent is anyone who is licensed to represent sellers and buyers in their state. All real estate agents are required by the state to have a license; to obtain one, they normally have to take classes and pass an exam. It’s also important to note that real estate agents aren’t allowed to work on their own; they have to be employed by real estate brokers.
It doesn’t matter whether you want to buy or sell a house; a real estate agent can represent both sides. The main responsibility of your real estate agent is to act in your best interest.
If you want to purchase a home, that means your agent will find houses, show them to you, submit offers, negotiate, draw up sales agreements, and help close the deal.
On the other hand, if you wish to sell a home, your real estate agent (also known as a listing agent in this case) should clear the way for the sale of your property. That includes helping you set an asking price, listing your home, hosting open houses, and negotiating with potential buyers.
Also, the so-called “dual agency” exists in some states. When an agent enters into a dual agency role, that means he is representing both the seller and the buyer.
As mentioned above, a real estate broker is someone who runs their own real estate company and hires real estate agents. In order for someone to become a broker, they first need to work as a real estate agent for a certain period of time (differs from state to state), gain experience, complete advanced courses on real estate, and pass a state-administered exam.
The main role of a broker is to manage agents, recruit and train new agents, resolve conflicts, establish escrow accounts, manage properties, compliance, the brokerage office and staff, relationships with sellers, etc.
Also, as a rule, brokers earn a higher income than real estate agents, have better commission splits, can run property management companies, and have more marketing opportunities.
While brokers can employ licensed real estate agents to work for them, they don’t have to; if they prefer, they can work independently, too.
In addition, brokers can sometimes work as associate brokers for other real estate agencies. An associate broker typically has identical qualifications as an agency owner or an independent broker, but they aren’t responsible for real estate agents with whom they work.
The National Association of Realtors (NAR) has more than 1.2 million members; any licensed real estate agent or broker that’s a member of the NAR is a Realtor.
In order to protect the clients and preserve the integrity of the agent, all NAR members agree to follow a specific code of ethics. The code serves to impose mainly moral rules, not legal ones. Any violation of the code could lead to expulsion from the association.
Real estate agents and brokers who belong to the NAR are considered to be of a higher standard than those who aren’t affiliated with the association.
Is a Broker a Better Choice than an Agent? Is a Realtor the Best Choice?
In the end, in order to make the best choice, you should consider your needs. Agents, brokers, and Realtors all perform similar functions but they might differ in the level of education and experience.
If you want to buy a home, it’s best to go with an agent who writes good offers and has connections in the industry. On the other hand, if you are selling a house, you should find an agent who has a good sales track record.
In the end, you should hire someone you trust and feel comfortable with. Also, their qualifications should be in accordance with your needs.