What’s the difference between a real estate broker and realtor?

When you buy new construction or sell a home, you should work with a licensed and experienced real estate professional. Depending on your choice, you will work with a real estate agent, realtor, or broker.

At first, there may be confusion regarding what each pro does explicitly. This guide will explain the simple and in-depth differences between real estate agents, brokers, and realtors.

What’s the difference between real estate agents, brokers, and realtors?

When you consult a real estate brokerage to help buy or sell a home, you get access to expert insights, the most up to date listings from the multiple listing service, and more. Overall, here are the main distinctions:

  • Real estate agents are licensed to represent you in buying and selling real estate. Licensed real estate agents must work under a broker and collect commission after completing a transaction. They can represent a variety of clients like standard buyers and real estate investors.
  • Real estate brokers are, in the simplest terms, real estate agents’ “bosses.” They can do the same things as real estate agents but can work alone and are responsible for the financial aspect of sales. They hold a real estate broker license. On top of regular sales commissions, they get a share of the commissions from the agents that work under them.
  • Realtors are simply members of the NAR, or National Association of Realtors. A Realtor can be any professional in the real estate industry, such as a real estate agent, broker, home appraiser, property manager, or loan officer. They must stick to the NAR’s code to remain Realtors.

No matter who you work with, each real estate professional is required to get continuing education in their areas of operation. These licensed professionals are qualified to navigate the real estate market on your behalf.


What is a real estate agent?

A real estate agent is someone who passed a real estate licensing exam and can represent others in buying and selling real estate. In the simplest terms, they are real estate salespeople. To achieve this status, they must pass rigorous licensing requirements. Agents must also continue their education to keep their licenses.

They must work for a sponsoring broker or brokerage firm and give a share of their commissions to the broker or brokerage. Real estate agents must be legal adults and U.S. residents, pass a background check, be sponsored by a broker, and pass their real estate exam.

Agents are just one of the many professions in real estate. They can also become realtors if they join the National Association of Realtors. In addition, they can become brokers after taking more classes and obtaining a real estate brokers license.

Since there are diverse needs in real estate transactions, agents often specialize in a particular area. Though they can be divided into many distinct groups, the two big niches are buyers’ agents and listing/sellers’ agents.

  • Listing agent:  These agents predominantly work with homeowners who want to sell. They are responsible for listing services, such as using a comparative market analysis (CMA) to set the sale price, do the bulk of the marketing, open houses, conduct showings and negotiations, make offers, and function as the diplomatic point of contact for the buyer’s agent on the other side of the transaction. They also can make offers on homes for their clients and guide them throughout the buying and selling process right up to closing day.
  • Buyer’s agent: These real estate agents work with home buyers and represent them by making offers, advising them on repairs and home staging, showing houses, negotiating the sale price and contract terms, and giving valuable advice to buyers during real estate transactions. They are also the main point of contact for the seller’s agent on the other side of the transaction. Just like listing agents, these pros are equipped to make offers on new home construction or existing homes.

What is a real estate broker?

A real estate broker is a real estate agent who decides to continue their education and passes the real estate broker exam. Brokers can do everything real estate agents can without needing to be sponsored by another broker or to work at a brokerage. Overall, brokers have more financial and legal liabilities than real estate agents. There are different tiers of real estate brokers. Each carries a different level of responsibility:

  • Associate brokers:  These are licensed brokers who have broker licenses but decide to work under another broker. Associate brokers don’t need to supervise other agents. These pros are almost identical to real estate agents in terms of duties and activities. However, they have more experience and education than real estate agents, which makes it possible to get better commission splits. Associate brokers also have fewer responsibilities and liabilities than managing or principal brokers.
  • Managing brokers: This broker oversees the day-to-day office activities and transactions at the real estate office. Managing brokers function as middle management at a brokerage, working directly under the principal or designated broker. They work with clients, train new agents, oversee marketing, meetings, listings, review and complete transactions, and other financial and business activities.
  • Principal broker /Designated broker:  All salespeople and other types of brokers work under the principal broker. The principal broker is the owner of the real estate firm that supervises real estate agents and other brokers to keep them in compliance with real estate laws. Every real estate office must have one designated broker. They are held to a higher standard than other brokers and have steep education requirements to maintain their status as principal brokers.

What is a realtor?

People often confuse the term realtor with “real estate agent,” but there are actually some big differences between the terms. While a real estate agent can be a realtor, not every real estate agent is a realtor.

Let’s take a closer look. A realtor is any real estate professional who is a member of the National Association of Realtors. However, this term has been widely and incorrectly used to refer to any real estate agent, even when they aren’t a member of the NAR. In truth, a realtor can be:

  • A real estate agent who has an NAR membership
  • A broker with an NAR membership
  • A home appraiser with an NAR membership
  • A property manager with an NAR membership
  • A real estate counselor with an NAR membership
  • A loan officer/mortgage lender with an NAR membership
  • A combination of two or more of these professions at once as long as the person in these professions is a member of the NAR

Realtors are unique because they commit to the Realtor Code of Ethics, which holds them to higher ethical standards and practices. They are often considered “next level” for the dedication they must apply to achieve and maintain membership as a Realtor. It’s a great achievement to join the NAR and it always looks good on the pro to have this credential.

Real Estate Agent vs. Broker and Realtor

As you can see, there are many types of real estate agents out there. Whether you want to work under a broker as an agent/salesperson or become a principal broker after gaining years of experience, there are many paths you can take. You can even take your career to the next level and join the NAR.

At Marketplace Homes, we have real estate agents, brokers, and realtors on our team ready to help you achieve your goals. Whether it’s to find a dream new construction home or manage a portfolio of properties, we are here for you.

get a real offer on your home