People use the terms Realtor® and real estate agent interchangeably, but they aren't the same thing. Not every real estate agent is a Realtor®. Both must be licensed to sell real estate, but there are some important distinctions.
What's in a Name?
An agent is an individual who has obtained a state license to assist consumers in buying or selling properties. Realtors® are agents who have gone one step further—they've also become members of the National Association of Realtors® (NAR). The NAR is the largest trade association in the U.S., and "Realtor®" is actually a trademarked term. Only about half of all licensed real estate agents in the U.S. are Realtors or members of the NAR.
A Realtor® can be a real estate agent, a broker-associate, a managing broker, or an exclusive buyer's agent, and this is just the beginning of the list.
A Realtor® must subscribe to the Realtor® Code of Ethics for membership, which includes 17 articles. The 17 Articles of the Code of Ethics contain various underlying Standards of Practice.
Education and Other Requirements:
Real estate agents must meet certain age and education requirements in the state where they want to work, although these aren't usually particularly stringent. For example, a four-year college degree is rarely or ever required.
Agents must then attend state-approved education courses and apply for and pass the state's licensing exam. They can then apply for a real estate license. Some states have ongoing certification requirements.
A Realtor® must meet all these standards, but must additionally pass a course on the NAR Code of Ethics and every four years thereafter to maintain certification.
The Code of Ethics:
The NAR Code of Ethics was adopted in 1913, and it's strictly enforced by local real estate boards. It's not just a bunch of rules that agents swear to uphold and adhere to because their brokers made them join the Association. The standards are much more restrictive and confining than state guidelines that govern agents.
Although there's no evidence 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 them. As a practical matter, even non-NAR member "real estate agents" are held to the same legal standard.
The 17 Articles:
Each of the 17 Articles carries weight, but one article typically stands above the rest: the first. It's the basis for the way a Realtor® operates, and it sets the tone. It doesn't state that a Realtor® must be fair to all parties, such as a listing agent when dealing with a buyer's agent, but that a Realtor® must be honest.
Above all, the Realtor must pledge to put the interests of her clients above her own.
These are the 17 things that a Realtor® promises to do, while non-affiliates don't:
1. Put the interests of buyers and sellers ahead of their own and to treat all parties honestly.
2. Refrain from exaggerating, misrepresenting, or concealing material facts about a property.
3. Investigate and disclose when situations reasonably warrant it.
4. Cooperate with other brokers/agents when it's in the best interests of the client to do so.
5. 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.
6. Avoid providing professional services in a transaction where the agent has a present or contemplated interest without disclosing that interest.
7. Do not collect any commissions without the seller's knowledge, nor accept fees from a third party without the seller's express consent.
8. Refuse fees from more than one party without all parties' informed consent.
9. Do not comingle client funds with the agent's own money.
10. Attempt to ensure that all written documents are easy to understand and give everyone a copy of anything they sign.
11. Do not discriminate in any fashion or for any reason on the basis of race, color, religion, sex, handicap, familial status, sexual orientation, gender identity, or national origin.
11. Be competent to conform to standards of practice and refuse to provide services for which they are unqualified.
12. Engage in truth in advertising and marketing.
13. Do not practice law unless the agent is also a lawyer.
14. Cooperate if charges are brought against them and present all evidence as requested.
15. Agree to not "bad mouth" competition, and agree to not file unfounded ethics complaints.
16. Do not solicit another Realtor's® client, nor interfere in a contractual relationship.
17. Submit matters to arbitration for settlement and not seek legal remedies in the judicial system.
If you are ready to buy or sell a home, contact us and put your home-ownership dreams in good hands.
Gina Duggan & Jody Garcia
Sisters of Real Estate Team
Realtors®