Couple and REALTOR<sup>®</sup> looking at a new kitchen.

REALTOR® Definition, Role And Facts

April 21, 2024 5-minute read

Author: Miranda Crace

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If you’re in the market to buy or sell a house, you might recruit the expertise of a real estate professional to help you complete the transaction. In the real estate industry, there are several titles for professionals that might sound similar but have distinct roles and skill sets – including that of a REALTOR®.

So, what is the real definition of a REALTOR® and why is it a registered trademark? Read on to learn exactly how REALTORS® differ from their industry counterparts, and when you might hire a REALTOR® instead of another real estate professional.

What Exactly Is A REALTOR®?

A REALTOR® is any real estate professional who is a member of the National Association of REALTORS® (NAR). The association was founded in 1908 and was initially called the National Association of Real Estate Exchanges. The foundation changed its name to NAR in 1972.

Professionals who hold the REALTOR® title include real estate agents, real estate brokers, property managers, appraisers or any other professional working in the real estate industry who holds membership in NAR. There are currently more than 1.5 million REALTORS® in the United States.

The word REALTOR® is a federally registered collective membership mark. The designation is widely respected, as it requires adherence to the high standards and code of ethics of the association.

REALTOR® Vs. Real Estate Agent Vs. Real Estate Broker

While a REALTOR® is any member of NAR, a real estate agent is a professional who is licensed specifically to aid in the sale of real estate. Real estate agents work for brokerage firms. If a real estate agent is a member of NAR, they would also hold the REALTOR® designation, but it’s important to note that not all agents are REALTORS®.

Agents work under brokers who run real estate firms. Like real estate agents, brokers are licensed to facilitate real estate transactions. Brokers are typically required to have several years of work experience as agents before they can take the broker’s exam and obtain licensure.

A broker would be considered a REALTOR® only if they were a member of NAR.

Real estate brokers might be confused with mortgage brokers in the real estate market. The key difference is that mortgage brokers work with lenders to help match people with mortgage financing. Real estate brokers connect home buyers and sellers.

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How Do REALTORS® Make Money?

REALTORS® help people buy, sell and rent homes. They often take care of everything from advising clients on market conditions, putting in home offers and conducting final walkthroughs.

REALTORS® make money on commission, meaning they take a portion of a property’s sale price. Generally, the buyer’s agent and seller’s agent (also called a listing agent) each take 3% of the total sales price for the home. This combined 6% comes out of the profit that the seller makes on their home sale.

What Is The Purpose Of The REALTOR® Code Of Ethics?

REALTORS® are held to a high standard of professionalism and integrity. This isn’t just lip service – REALTORS® follow a strict code of ethics, known as the Code of Ethics & Professional Standards, designed to protect consumers from dishonest business practices. The code discusses many aspects of a REALTOR’S® duties, including how to handle conflict, how to advertise and how to treat clients.

It’s worth noting that real estate agents have much of the same training and expertise based on having to pass state licensing exams.

Should You Hire A REALTOR®?

The decision whether to work with a REALTOR® comes down to each individual and what’s best for their situation. There are many advantages to partnering with a REALTOR® when buying or selling a home, including:

  • They are knowledgeable about the home buying process. Real estate transactions can be a complicated process, so having someone on your side who is knowledgeable on the ins and outs of buying or selling a home can make the process less daunting for you.
  • They will always have your best interest in mind. When you hire a REALTOR®, that individual works for you. You should be able to trust that your REALTOR® has your best interest at heart throughout every stage of the transaction, so you can count on them to provide you with guidance and advice whenever needed.
  • They have superior negotiation skills. Whether you’re buying or selling a house, a REALTOR®'s negotiation skills can come in handy and help you more easily attain whatever you’re looking to achieve.
  • They can save you time and energy. Your REALTOR® will be able to take care of all the details throughout the real estate transaction, including preparing paperwork and making and taking calls on your This can save you from the potential headaches these tasks can cause you if you try to navigate the process yourself.

Of course, these same attributes can also apply to real estate agents without the official professional designation of REALTOR®.

Alternatives To Hiring A REALTOR®

While there are undoubtedly benefits to working with a REALTOR® when buying or selling a home, doing so isn't required. If you’re looking to sell or buy a house without a REALTOR®, it’s possible to do it on your own.

However, because the processes include complicated disclosures and legal contracts, many people find that hiring a REALTOR® or other licensed real estate professional is worth it in the long run.

How Do You Find A REALTOR®?

Finding a REALTOR® to work on your behalf can be an important first step in the home buying or selling process. One of the most common ways people find REALTORS® is through word of mouth. Chances are, someone you know has used a REALTOR® they really liked in the past. Asking friends and family for recommendations can be a good way to start searching for a REALTOR®.

As you interview potential REALTORS®, don’t be afraid to ask questions about their experience and knowledge of the area you’re buying or selling in. Below is a list of questions you may want to consider when speaking with potential REALTORS®:

  • What’s your schedule and availability?
  • How many clients are you currently working with?
  • How long have you been a REALTOR®?
  • Do you specialize in any particular areas or property types?
  • What percentage of your listings do you sell?
  • On average, how long does it take for a buyer to purchase a home with you?
  • How many homes did you close on in the last year?

REALTOR® FAQs

Below, we answer some additional questions you may have about REALTORS®.

Do I have to hire a REALTOR® to buy or sell a house?

No, you don’t need to work with a REALTOR® when buying or selling a home. You may seek the expertise of a licensed real estate agent or broker. Of course, you always have the option to go at it alone and buy or sell a property yourself.

Is it better to work with a REALTOR® or a real estate agent?

In general, there isn’t much of a difference between working with a real estate agent versus a REALTOR® when navigating a real estate transaction. One title is not necessarily better than the other. The biggest difference between REALTORS® and real estate agents is that REALTORS® are members of the National Association of REALTORS® (NAR).

How do I become a REALTOR®?

To become a REALTOR®, you’ll have to secure your real estate license. Then, you’ll join the NAR association in your local area. As a REALTOR®, you’ll also have to pay annual membership dues to the NAR.

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The Bottom Line On REALTORS®

While REALTORS®, real estate agents and brokers are all real estate professionals; they are not interchangeable terms. REALTOR® is reserved solely for real estate professionals who are members of the National Association of REALTORS® (NAR).

While working with a REALTOR® isn’t required when buying or selling a home, doing so can help make the process run more smoothly and ensure you have someone looking out for your best interests.

In addition to finding a REALTOR®, another important first step in the home buying process is to get your initial approval from your lender. If you’re ready to begin, start your application online with Rocket Mortgage® today so that you’ll be ready to start house hunting once you find the right REALTOR®.

Miranda Crace

Miranda Crace is a Senior Section Editor for the Rocket Companies, bringing a wealth of knowledge about mortgages, personal finance, real estate, and personal loans for over 10 years. Miranda is dedicated to advancing financial literacy and empowering individuals to achieve their financial and homeownership goals. She graduated from Wayne State University where she studied PR Writing, Film Production, and Film Editing. Her creative talents shine through her contributions to the popular video series "Home Lore" and "The Red Desk," which were nominated for the prestigious Shorty Awards. In her spare time, Miranda enjoys traveling, actively engages in the entrepreneurial community, and savors a perfectly brewed cup of coffee.