Understanding the important difference between REALTORS and Real Estate Agents

Understanding the important difference between REALTORS and Real Estate Agents

If you’ve bought or sold a home recently, you’ve probably encountered two terms that may be a little confusing. From news to ads to social media, we hear the labels “real estate agent” and “Realtor” used so often that you may think they’re interchangeable. But, in fact, a real estate agent and a REALTOR are two different things, although a professional can choose to be both.

Before I confuse you even more, let me clearly highlight the important differences between a real estate agent and a REALTOR.

Real Estate Agent:

Real estate agents are sales professionals that are licensed to mediate between buyers and sellers in real estate transactions. That can mean buying a home, selling, facilitating commercial real estate deals, or even helping with property management

Real estate agents are also empowered to handle off the legal documents inherent in real estate contracts in transactions.

The Association of Real Estate License Law Officials (ARELLO) estimates that

there are approximately 2 million real estate agents in the United States. That number is astounding when you consider it’s about 1% of the total adult working population in the U.S.!

While the number of real estate agents may fluctuate based on the overall health of the market and the economy, the ranks of RE agents are expected to grow by 11% between 2010 and 2020.

Real estate agents can perform their duties as either sales professionals, associate brokers, or brokers.

In order to become a real estate agent, someone needs to meet these criteria:

Real estate licensing applicants must complete a certain amount of classroom instruction from an accredited real estate school. Requirements vary by state, but it’s usually between 30 to 90 hours of course time.

RE agents must then pass a state licensing exam, with questions spanning federal, state, and even local real estate laws, industry standards, and best practices.

Even when they pass this exam, they still need to keep their license in good standing by taking continuing education courses and satisfying professional requirements periodically.

The real estate agent needs to pay an annual fee for their license, which also needs to be renewed every year or two (depending on state laws).


“REALTOR” is a trademark that refers to someone who is a member of the National Association of Realtors (NAR).

Most are real estate agents, but some REALTORS do not buy or sell properties for a living. In fact, home appraisers, property managers, managing brokers, real estate counselors, and other professionals in related fields can be members of NAR and therefore REALTORS, even though they’re not real estate agents.

Furthermore, only about half of all real estate agents in the U.S. are members of NAR and REALTORS.

NAR has a current membership of about 983,000 REALTORS.

They operate within one of NAR’s 1,400 local real estate associations on a state (such as the California Association of REALTORS) and local (Sacramento Association of REALTORS) level.

Being a REALTOR and member of NAR comes with significant benefits, not only to the real estate salesperson but to their clients and even the communities they serve.

For instance, REALTORS get access to the local Realtor Board’s MLS and keybox systems.

The defining principal by which REALTORS operate is that they abide by a special Code of Ethics, adhering to a professional standard that’s not required of real estate agents.

Realtors have the advantage of posting and advertising on the Realtor-owned MLS and other resources, a big advantage for home sellers who enlist their services.

NAR and other Associations are also vocal and active when it comes to influencing legislation, lobbying, and governance in the real estate and housing industries.

Realtors work tirelessly to positively impact legislation through NAR’s political action committee (PAC), which is one of the most prominent lobbyists in the country.

The PAC works with Congress and the executive branch through lobbying, policy development, political field representatives, political communications, and grassroots advocacy

Most people don’t realize that the National Association of Realtors (NAR) is the largest trade association in the United States!

NAR was founded in 1908 as the National Association of Real Estate Exchanges and later changed its name to The National Association of Real Estate Boards. But in 1916, a Minneapolis real estate agent named Charles N. Chadbourn who was acting vice president of the National Association of Real Estate Boards proposed the use of the term “Realtor.”

NAR obtained a copyright and trademark on “Realtor” in 1950 to protect the title. The current name of National Association of Realtors was adopted in 1974.

What are the criteria for becoming a Realtor? You’ll find that while many of the requirements are the same as for real estate agents, REALTOR membership goes above and beyond.

In addition to having a valid real estate license, Realtors must be actively engaged in the real estate business, have no record of official sanctions involving unprofessional conduct and have no recent or pending bankruptcy

Applicants pay a one-time application fee, and then membership dues once the Board of Directors approves their membership.

They are expected to uphold the strict Realtor Code of Ethics, founded on the principles of “the Golden Rule.” In fact, it’s said that this Code of Ethics is what separates and defines Realtors.

New members must attend an orientation to learn the NAR’s Code of Ethics & Professional Standards, which consists of 17 Articles, 71 supporting Standards of Practice and 131 explanatory case interpretations.

Some of the highlights of the code including:

  • Demanding respect for others’ exclusive relationships with clients
  • Arbitrating or mediating conflicts in-house
  • Prioritizing client interests
  • Practicing non-discrimination
  • Disclosing conflicts of interest
  • Providing clear written documents


Now you know the important difference between real estate agents and REALTORS, and you can make an informed choice the next time you’re buying or selling a house and are seeking representation!

If you need recommendations, we know a lot of great real estate agents and REALTORS so contact us anytime!

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