The terms “Real Estate Agent” and “REALTOR®” refer to two distinct professional designations. While both help clients buy, sell, or lease property, the requirements and commitments for each title are fundamentally different. Understanding this difference is important for consumers because it indicates the level of accountability and the specific standards of conduct a professional has agreed to uphold. The distinction lies in whether the professional is bound only by state law or also by a voluntary commitment to a national trade association and its Code of Ethics.
Defining the Licensed Real Estate Agent
A Real Estate Agent is a professional who has met the legal requirements to transact real estate business on behalf of clients. The designation is granted by a state’s real estate licensing body after a candidate completes required pre-licensing education hours, followed by passing a comprehensive state and national examination. The agent’s license serves as the legal permission to operate.
State licensing laws require the agent to operate honestly and fairly, with their primary obligation being to adhere to the regulations set forth by the governing body. Licensing requirements also mandate that agents work under the supervision of a licensed real estate broker to handle client funds and finalize transactions.
Defining the REALTOR®
The term REALTOR® is a registered trademark belonging to the National Association of Realtors (NAR). To use this designation, a licensed real estate agent or broker must voluntarily become a member of the NAR.
Membership requires the payment of annual dues to the national organization, as well as to the state and local boards of Realtors. In exchange, members gain access to a variety of resources, including market data, educational opportunities, and often, access to the Multiple Listing Service (MLS). The most significant requirement of membership is the pledge to abide by the association’s established Code of Ethics.
The Core Difference: Licensing Versus Membership
The difference between a Real Estate Agent and a REALTOR® is the distinction between a legal status and a professional affiliation. Conversely, a REALTOR® is a Real Estate Agent (or Broker) who has chosen to join a private trade association.
This means that every REALTOR® is a licensed Real Estate Agent, but not every licensed agent is a REALTOR®. The REALTOR® designation is an additional layer of voluntary membership that is added onto an existing state license. The core difference is that the agent is bound by state law, while the REALTOR® is bound by state law plus the association’s rules.
Why the REALTOR® Code of Ethics Matters
The NAR Code of Ethics holds members to a higher standard of conduct than state law alone. This code emphasizes duties to clients, the public, and other REALTORS®, promoting honesty and integrity in all dealings. It goes beyond basic legal compliance by mandating specific principles of loyalty, truthfulness in advertising, and non-discrimination.
Agents who are not REALTORS® are only subject to the minimum legal and ethical standards established by their state licensing commission. A violation of the NAR Code of Ethics can result in disciplinary action from the association, including fines, suspension, or expulsion from the organization, separate from any action taken by the state.
Understanding Other Real Estate Titles
The professional landscape of real estate also includes titles beyond the agent-Realtor distinction, primarily the Real Estate Broker and the Salesperson. A Real Estate Broker possesses a higher-level license that requires significant additional training, education, and typically a minimum of two to three years of experience as a licensed agent. This advanced license grants them the legal ability to operate independently, manage a brokerage firm, and supervise other agents.
A Real Estate Salesperson or Broker Associate is the title often used interchangeably with Real Estate Agent, particularly in states that refer to the initial license level as a “salesperson license.” This professional is licensed to assist clients with transactions but must work under the direct supervision of a licensed Broker. Brokers and Salespersons can also choose to become REALTORS® by joining the NAR, signaling their commitment to the association’s ethical standards.