REALTOR® definition, role, and facts

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^®?

If someone is a REALTOR^®, it means that they are a 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

There are many different professionals who work in the world of real estate. Some of them can play similar roles, but their experience, licensing, and regulations surrounding them can differ.

For example, 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. 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.

What is the purpose of the REALTOR^® Code of Ethics?

REALTORS^® are held to a high standard of professionalism and integrity. They 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.

Some things included in the Code of Ethics are:

• REALTORS^® must protect and promote the interests of only their client, but also treat all parties honestly
• REALTORS^® may not mislead homeowners about their property’s value
• REALTORS^® may represent both the buyer and seller in the same transaction only after disclosing that to both parties and getting informed consent
• REALTORS^® must avoid exaggerating, misrepresenting, or concealing pertinent facts in a transaction
• REALTORS^® must not accept a commission, rebate, or profit on expenditures made on their client’s behalf without the client’s knowledge, nor accept compensation from multiple parties in one transaction
• REALTORS^® must not deny equal service based on race, color, religion, sex, disability, familial status, national origin, sexual orientation, or gender

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 about the ins and outs of buying or selling a home can make the process less daunting for you.
• They will always have your best interests in mind. A REALTOR^® must work solely on your behalf and in your best interest. That means that you can trust that your REALTOR^® has your best interest in mind throughout every stage of the transaction, so you can count on them to provide you with guidance and advice, such as how much to offer when purchasing a home or helping you decide what contingencies to waive.
• They have strong 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, whether that be a lower price for a home or concessions from the seller, such as a commitment to repair issues with the property.
• 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 for things like making an offer on a home and making and taking calls on your behalf. 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.

For example, you can sell your home for sale by owner (FSB), meaning you aren’t working with any real estate professionals. That can help you save on commissions, but you’ll be on your own without someone to help with pricing and showing your home or negotiating with buyers.

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. On the other hand, you can also employ a real estate lawyer to assist with these tasks.

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 a REALTOR^® 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^®.

You can also use online search tools, such as Redfin’s real estate agent search or Rocket Mortgage’s own search tool. If you’re working with a mortgage broker, the broker may also be able to point you toward agents who have been easy to work with in the past.

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?

FAQ

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 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.

The bottom line: A REALTOR^® makes home buying and selling easier

A REALTOR^® is a real estate professional who has taken the additional step of joining NAR and agreeing to its code of ethics. Working with any real estate professional can be a big help with buying or selling a home, but hiring a REALTOR^® can offer extra peace of mind because you can feel confident that they have experience and are truly working in your best interest.

If you’re ready to find out what kind fo loan you may qualify for, you can start an application with Rocket Mortgage today.