What is the DIFFERENCE BETWEEN a Real Estate Agent, Real Estate Broker and Realtor? In short- a Real Estate Agent is a “salesperson” who can’t work on their own, they MUST work under a licensed Real Estate Broker. A Real Estate Broker is one who has advanced their career beyond the level of a Real Estate Agent and is held to a higher level of accountability, knowledge and skillset. A “Realtor” is the designation assigned to EITHER an Agent or Broker who opts to pay fees to join the TRADE ORGANIZATION known as the National Association of Realtors (NAR).
BELOW IS A MORE DETAILED BREAKDOWN OF THE INFORMATION DELINEATED ABOVE.
WHAT IS A REAL ESTATE AGENT?
A Real Estate Agent is a salesperson who has completed the licensing requirements to assist clients who wish buy, sell or rent properties on behalf of the Broker.
While licensing regulations vary state to state, in order to become a Real Estate Agent in Ohio, the candidate MUST be US citizen or legal alien 18 years or older, with a high school diploma or GED, sponsored by a Real Estate Broker, must not have any disqualifying offence as per Ohio Department of Commerce, not been adjudged by a court to have violated any municipal, state, or federal civil rights laws as per regulations or, if so adjudged, the superintendent has disregarded the adjudication, satisfied a criminal records check of both state & FBI records, passed state-mandated courses specifically designed for Real Estate Agents and pass all required State testing associated therewith.
Once a Real Estate Agent is licensed in Ohio, they will work with their Broker to determine what would be the best role for that Agent to serve within the Brokerage. Knowing the Broker is ultimately liable for actions of the Agent, it is crucial they work together as team players. Such rolls may include one or all of the following three options, however many Brokerages do not participate in dual agency-a subject that will be discussed in another blog.
Listing Agent: Listing Agent has a fiduciary duty to represent the best interests of the Seller in compliance with rules and regulations set forth in Ohio law. Unless an agreement has been signed to waive the following duties, Listing Agents are required to assist the Seller with seeking a purchase offer at a price and with terms acceptable to the Seller. Accept delivery of and present any purchase offer to the Seller in a timely manner even if the property is subject to a contract of sale, lease or letter of intent to lease. Answer the Seller’s questions and provide information to the client regarding any offers or counter offers. Assist the Seller in developing communicating and presenting offers or counter offers. Answer the Sellers’ questions regarding the steps the Seller must take to fulfill the terms of any contract (within the scope of knowledge required for real estate licensure.)
Buyer Agent: Buyer Agent has a fiduciary duty to represent the best interests of the Buyer in compliance with rules and regulations set forth in Ohio law. Unless an agreement has been signed to waive the following duties, Buyer Agents are required to assist the Buyer with seeking a property at a price and with purchase or lease terms acceptable to the Buyer. Presenting any offer to purchase or lease to the Seller or Seller’s Agent in a timely manner. Accept delivery of and present any counter offers to the Buyer. Answer the Buyer’s questions and providing information to the Buyer regarding any offers or counter offers. Assist the Buyer in developing communicating and presenting offers or counter offers. Answer the Buyers’ questions regarding the steps the client must take to fulfill the terms of any contract (within the scope of knowledge required for real estate licensure).
Dual Agency: Ohio law does allow a Real Estate Agent and Brokerage to represent both the Seller and Buyer in a transaction as long as both parties agree. Knowing that the Buyer and Seller interests may be different or adverse, the Agent will not be able advocate on behalf of each client to the same extent the Agent would if representing only on client. For this reason, many Brokerages will not participate in dual agency.
WHAT IS A REAL ESTATE BROKER?
One of the main differences Between a Real Estate Broker and Real Estate Agent is their level of education and experience. Real estate agents who want to advance further in this industry are required to comply with a variety if educational and experience requirements as a licensed Real Estate Agent PRIOR to completing the requirements to become a Real Estate Broker.
While licensing regulations vary state to state, in order to become a Real Estate Broker in Ohio, the candidate MUST have 2years of experience as a Real Estate Agent and is required to pass specific state mandated courses for Brokers including, Financial Management, Human Resources, Applied Economics and Business Law as well as pass all required State testing associated therewith. In addition, the candidate must have successfully completed a minimum of two years post secondary education, successfully closed a certain number of real estate transactions and satisfied a criminal records check of both state & FBI records just as they did when they earned their Real Estate Agent’s license. In short, Real Estate Brokers have a greater comprehensive knowledge of real estate matters than Real Estate agents.
There are three different roles a Broker can pursue once they have successfully completed licensing requirements whether operating a Full service or Flat Fee Service Brokerage (compare the two options) specializing in Flat Fee MLS Listings with optional listing packages such as Ohio Broker Direct. Many Brokers that operate smaller Brokerages not only handle all aspects of the Brokerage, said Broker also represents Buyers and Sellers with the acquisition and sale of real estate. The Ohio Division of Real Estate refers to ALL Real Estate Brokers as Real Estate Brokers whereas certain trade groups such as the NAR refer to Real Estate Brokers that work for another Brokerage in a sales capacity as an Associate Broker. In short, Broker is licensed to handle all aspects of a Brokerage, however heir individual duties may vary.
Designated Broker: The Designated Broker may or may not own the Brokerage, however they are responsible for ensuring compliance with all state and federal laws as well as establish business policies and set company goals. Depending on the size of the Brokerage, the Designated Broker will supervise all business activities, including other Brokers, Agents office staff and Individual Clients.
Managing broker: Managing Brokers are often found in larger Brokerage firms and may manage single or multiple offices and are supervised by the Designated Broker. The Managing Broker is responsible for overseeing individual Agents, Clients, New Hires, Staff Members, transactions and daily operations. They’re responsible for corrective actions, reviewing compliance terms and resolving interpersonal conflicts.
Associate Broker: Associate Broker is another term for a Real Estate Broker working for another Designated Broker. Associate Brokers prefer to operate exclusively in a sales capacity rather than a managerial capacity however they have the same skillset as a Managing Broker or Designated Broker.
What Does a Realtor Do?
A Realtor is an individual who is a member of the National Association of Realtors (NAR), a trade association for real estate professionals. Most Real Estate Agents and Real Estate Brokers join the NAR to gain access to the Multiple Listing Service (MLS). Joining the National Association of Realtors requires completing courses, paying membership dues, and complying with their rules and regulations. To be clear – neither a Real Estate Agent or Real Estate Broker is required to join the NAR and many choose not to do so. There are numerous other marketing options available to firms that specialize exclusively in commercial real estate and they often prefer join organizations such as CoStar, CREXI etc. It’s important to note that becoming a member of the NAR is not exclusive to Real Estate Agents and Real Estate Brokers. Property Managers, Appraisers, and even Counselors are able to join the NAR as members. In the interest of full disclosure there are numerous class action suits that have been filed against the NAR and the DOJ has litigated against the NAR on multiple occasions for restraint of trade. The DOJ has ongoing investigations into ethical violations, misrepresentation and fraud within the organization.