Realtor vs Real Estate Agent

This is one of the most searched terms that I see on Google is: “What is a realtor?”

Realtors versus real estate agents.

Realtors are involved in the real estate business. 

So, is a realtor the same as a real estate agent?

Yes and no is the short answer. But, let’s get into it. 

So, there are state licensing requirements to become a real estate agent. You have to be licensed by the State of Texas, as well as a license holder with the Texas Real Estate Commission. You have to be paying dues, as well as continuing education requirements.

Oftentimes, real estate agents, in order to do business and make money, you need to be a member of a local MLS or a Local Board of Realtors. This is the multiple listing service. This is how realtors post homes for sale as well as search for homes for sale. And we’re going to get into some more details on that. 

But, some of the more well-known examples of that in Texas would be HAR, which is the Houston Association of Realtors, as well as the Austin Board of Realtors, and really there’s probably about a hundred more in Texas.

So, to be a realtor and to have the name realtor, not just a real estate agent, you have to be a dues-paying member of the trade organization. This is a national trade organization of the National Association of Realtors or NAR.

Member of National Association of Realtors

NAR was founded with a Code of Ethics. It’s kind of like bylaws of how real estate agents conduct business. And this kind of sets the rules of engagement and it’s just an overall guide on how to conduct business.

Looking at a brief definition is, the term realtor is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors and subscribes to its strict Code of Ethics.

NAR has been promoting a very successful business model that is still alive and well even today, over a hundred years later, and the summary of this business model is it’s based on cooperation between brokers. Normally, there’s going to be a seller’s broker and a buyer’s broker, and this cooperation stresses compensation and the commission roles. 

So, part of the Article 3 of the Code of Ethics says realtors acting as exclusive brokers of sellers establish the terms and conditions of offers to cooperate with other agents.

Member of a Multiple Listing Service (MLS)

Now, the local MLS is a very strong organization that real estate agents and realtors become a part of. Following NAR’s Code of Ethics, they agree to do business using the co-op shared commission model. The local MLS, because of its affiliation with so many successful real estate agents, is the number one way to sell a home in the United States. 

So, in summary, what is a realtor? It’s a licensed real estate agent who’s a dues-paying member of the National Association of Realtors and also, almost certainly, is a member of a local MLS Board of Realtors.

Hopefully you found this presentation helpful and informative. If you ever have any questions about the commission structure, or the duties of a real estate agent, or if we can help you, please reach out and I’ll be happy to answer any questions that you have. Thanks so much.