A real estate broker, realtor or brokerage firm is a commercial person who deals with the sale or purchase of property. An agent can work by himself, but most often an agent works for a licensed brokerage under a broker’s wing. The job of a realtor or brokerage firm is to locate prospective buyers and sellers, help them find suitable property and conduct the deal so that the seller gains a financial transaction.
There are many types of agents. The typical realtor has the title to a piece of property, the negotiating power to sell or buy it, and the connections to buyers and/or sellers. Buyers typically have to find an agent to assist them in buying a home. Most buyers rely on a realtor to lead them to a suitable home that meets their needs. In this case, the typical agent is called the intermediary.
Brokerage firms are another example of a brokerage firm. They are formed like other firms but function as a private division of a larger firm. A real estate agent may be called the full-service broker or the specialty broker. The term realtor is commonly used interchangeably with broker.
While there are no official statistics on the number of realtors nationwide, there are over 1.4 million in the United States. This number includes licensed realtors who work for brokerage firms and individuals who work on their own. Some people incorrectly call themselves realtors. Many times, these people are actually freelance realtors or self-employed individuals. When it comes to realty, not every agent is licensed.
All states require an agent to be licensed. The license is issued by the State Board of Realtors. Each state has different rules and regulations when it comes to the licensing requirements. Some states only require agents to have a bachelor’s degree; others may require an advanced degree. Most states do not require licensing until an individual has worked for at least three years, but some can apply immediately.
Every agent has their own specialization. One type of Realtor works with realtors that specialize in commercial properties while others deal strictly in residential properties. There is a type of Realtor that works exclusively with homeowners while others work exclusively with investors. There is even a type of Realtor who works exclusively with government-owned properties. There are even special types of Realtors who work exclusively with short-term leases.
The terms realtor vs agent often get thrown around without much meaning. When it comes to buying or selling a home, the realtor plays a major role. The realtor will coordinate listings, show property to potential buyers, show homes to buyers, arrange financing and close transactions. Realtors have the ability to influence the market in a buyer’s favor. A good realtor will make it their goal to locate a perfect home for the perfect price.
To become realtors, one must first complete a four-year associate degree from a community college. After graduation, one must pass the National Real Estate Association (NMRA) exam. Then, after undergoing intensive training for state exam, a realtor can become certified by becoming a member of the National Association of Realtors of Property Appraisers. These states require a six-month internship in the buyer’s market before becoming certified.
In order to be a successful Realtor, one must be committed to ethics and professional standards. The National Association of Realtors and the American Realtor’s Association both require realtors to participate in ethics and professional standards seminars and to take continuing education courses every two years. Candidates for national certification must meet a minimum of seventy hours of continuing education in three different areas: investor relations, public law and housing, and ethics and professional standards. Candidates that successfully complete the requirements are then accepted into the association.
Some states, such as New Hampshire, have a minimum commission for realtors. Other states have no minimum requirement and only require that an agent who becomes a member of the association take the full time exam. Once the agent passes the exam, they become a registered agent. A registered agent can now list the house on the MLS listing and negotiate with buyers directly.
Although there is no real estate licensing exam or minimum requirement, experienced Realtors often earn more than minimum commission rates. Realtors who have represented buyers who pay a higher amount of money up front (such as a buyer who pays cash) may be able to command a higher realtor commission. There is no set commission price, so a Realtor may charge anywhere from ten to forty percent less than the national average. When a realtor has successfully represented a buyer who paid cash, they can expect to earn upwards of six times the amount earned by someone who represented the same buyer using a lower commission rate.