Broker vs. Agent vs. Realtor: What's the Difference?

by Bright Ugochukwu
March 24, 2025

When you’re looking to buy or sell property, you might hear terms like real estate agent, broker, and realtor thrown around.

While they all deal with real estate, they aren’t the same.

Each has its own role, responsibilities, and requirements. Understanding these differences can help you choose the right professional for your needs, whether you’re a buyer, seller, or someone looking to enter the industry.

With this in mind, we’ll cover the following:

Agent Responsibilities
Broker Overview
Realtor Explained
Licensing Differences
Earnings & Commissions
Legal & Ethics
Choosing Professionals

Takeaways

A real estate agent is licenced to assist clients in buying and selling properties. They usually work under a broker.
Brokers have more training and can operate independently, often overseeing agents and handling transactions.
Realtors are agents or brokers who are members of the National Association of Realtors and adhere to a strict code of ethics.
Licencing requirements differ; agents need basic training, brokers require additional education, and realtors must join a professional association.
Compensation varies; agents typically earn commissions, brokers might take a cut of agents’ earnings, and realtors may have access to more resources and support.

The Role of a Real Estate Agent

Definition of a Real Estate Agent

Simply put, a real estate agent is a licensed professional who helps people buy, sell, or rent properties.

They act as intermediaries between buyers and sellers (or landlords and tenants), guiding them through the often-complex process of real estate transactions.

Think of them as your go-to person for all things property-related. They’re the ones who know the market, understand the paperwork, and can negotiate on your behalf.

Responsibilities of a Real Estate Agent

Real estate agents wear many hats. Their responsibilities can vary depending on whether they’re representing a buyer or a seller, but here’s a general overview:

For Sellers (Listing Agents):
- Advising on pricing strategies. They’ll help you determine the best price to list your property at, considering market conditions and comparable sales.
- Marketing your property. This includes listing it on the MLS (Multiple Listing Service), taking professional photos, and arranging viewings.
- Negotiating offers. They’ll present offers from potential buyers and help you negotiate the best possible deal.
For Buyers (Buyer’s Agents):
- Finding suitable properties. They’ll search for properties that meet your criteria, considering your budget, location preferences, and other needs.
- Arranging viewings. They’ll schedule viewings of properties you’re interested in and accompany you to provide insights and answer questions.
- Negotiating offers. They’ll help you prepare and submit an offer and negotiate with the seller (or their agent) on your behalf.

Pro Tip: Real estate agents are almost always paid on commission, meaning they only get paid if a deal goes through. This incentivises them to work hard for their clients and get the best possible outcome.

Types of Real Estate Agents

Not all real estate agents are the same. There are a few different types, each with their own specialisation:

Seller’s Agent (Listing Agent): This person represents the seller and works to get them the best possible price for their property.
Buyer’s Agent: Represents the buyer and helps them find and purchase a property that meets their needs.
Dual Agent: A dual agent represents both the buyer and the seller in the same transaction. This is legal in some areas, but it requires the consent of both parties and can present a conflict of interest.

Exploring the Broker Profession

What is a Real Estate Broker?

A real estate broker is like an agent’s older, wiser sibling.

They’ve taken extra courses and passed another exam to get a broker’s licence, which is like levelling up in the real estate world.

Brokers can work independently, run their own agencies, and even hire other real estate agents. It’s a step up in terms of responsibility and potential earnings.

Broker Responsibilities

Brokers do pretty much everything an agent does but with added responsibilities.

This includes:

Making sure all transactions are legal and above board.
Overseeing paperwork to ensure accuracy.
Managing finances related to property deals.
Training and supervising agents (if they run a brokerage).
Handling client issues and complaints.

Pro Tip: Basically, they ensure everything runs smoothly and ethically. They are the go-to person when tricky situations arise. They also need to stay up-to-date with all the latest property laws and regulations.

Types of Real Estate Brokers

There are a few different types of brokers you might come across:

Designated Broker: The broker oversees an entire real estate office. They’re responsible for making sure everyone in the office follows the rules.
Managing Broker: Similar to a designated broker, a managing broker manages the day-to-day operations of a real estate office and supervises agents.
Associate Broker: An associate broker has a broker’s licence but chooses to work under another broker, often to gain experience or focus on sales rather than management. If you are interested in broker licencing process, it’s important to understand these different roles.

Defining the Realtor Designation

What is a Realtor?

It’s a term thrown around a lot, often used interchangeably with ‘real estate agent’.

But there’s a key difference.

A Realtor is a real estate agent or broker who is also a member of the National Association of Realtors (NAR).

Think of it like this: all Realtors are real estate agents, but not all real estate agents are Realtors. To use the title, you have to join the NAR and stick to their rules.

Benefits of Being a Realtor

Being a Realtor comes with a few perks. It’s not only about using the name.

Members get access to a load of resources, including:

Training programmes to keep skills sharp.
Networking opportunities to connect with other professionals.
Access to market data, which can be super helpful for clients.
Use of the Realtor brand, which many see as a sign of professionalism.

Pro Tip: Being a Realtor also means being part of a larger community. This can show clients that you’re serious about your job and committed to doing things the right way, which can definitely help build trust.

Realtor Code of Ethics

The most important aspect of being a Realtor is adhering to the NAR’s code of ethics. This code sets a higher standard than just the basic legal requirements for real estate agents.

It covers things like:

Honesty and integrity in all dealings.
Putting clients’ interests first.
Avoiding conflicts of interest.
Fairness to all parties involved.

Basically, it’s about being a good egg and doing right by your clients.

It’s a promise to uphold certain standards, which can give clients peace of mind when they’re making big decisions about buying or selling property.

Realtors are distinguished by their commitment to ethical behaviour and professionalism.

Key Differences in Licencing Requirements

Licencing for Real Estate Agents

Becoming a real estate agent involves a specific process.

First, you need to complete a pre-licencing course, which covers the basics of real estate law, ethics, and sales practises. These courses vary in length and cost depending on the state. Then, you have to pass a state-administered licencing exam.

This exam tests your knowledge of real estate principles and state-specific regulations.

Once you pass, you’ll be a licenced real estate agent ready to work under a sponsoring broker. However, the specifics can change a bit depending on where you are in the country, so always double-check the local rules.

Broker Licencing Process

To become a broker, you must have more experience and education than a real estate agent.

Typically, this means having a few years of experience as a licenced agent.

You’ll also need to complete additional, more advanced coursework. This coursework often covers topics like real estate law, property management, and brokerage operations in greater depth.

After completing the required education, you must pass a broker’s licencing exam, which is generally more difficult than the agent exam.

Successfully passing this exam allows you to work independently and supervise other agents. The real estate broker has the additional job of making sure all real estate transactions are lawful.

Realtor Membership Requirements

Being a Realtor isn’t about licencing; it’s about membership in the National Association of Realtors (NAR). To become a Realtor, you must first hold a valid real estate licence (either as an agent or a broker).

Then, you need to apply for membership with a local real estate board or association that is affiliated with the NAR. As part of the application process, you must agree to abide by the NAR’s Code of Ethics.

This code sets a higher standard of conduct than the basic legal requirements for real estate professionals. You must also pay membership dues, which can vary depending on the local board.

Once accepted, you gain access to a range of benefits, including professional development resources and networking opportunities. The National Association of Realtors (NAR) may be an agent or a broker, among other professions in the industry.

Pro Tip: All Realtors are licenced real estate professionals; not all licenced real estate agents or brokers are Realtors. The Realtor designation signifies a commitment to a higher standard of ethics and professionalism.

Here’s a quick summary:

Hold a valid real estate licence (agent or broker).
Apply for membership with a local NAR-affiliated board.
Agree to abide by the NAR’s Code of Ethics.

Comparing Compensation Structures

How Real Estate Agents Are Paid

Real estate agents typically earn a commission, which means their income is directly related to the successful completion of property transactions.

The standard commission is a percentage of the property’s sale price, and this percentage is usually split between the seller’s agent and the buyer’s agent. The exact split can vary depending on the agreement between the agents and their respective brokerages.

Commission rates are negotiable and can be influenced by market conditions, the value of the property, and the services the agent provides.
Agents might also receive bonuses or incentives for exceeding sales targets or achieving specific goals set by their brokerage.
It’s worth noting that agents usually don’t receive a salary; their income is solely dependent on closing deals.

Pro Tip: It’s important for both buyers and sellers to discuss commission rates with their agents upfront to ensure transparency and avoid any misunderstandings later in the transaction.

Broker Commission Models

Real estate brokers with more experience and licencing than agents can earn income in several ways.

Firstly, they can earn commissions on their sales, similar to agents.

Secondly, and perhaps more significantly, they earn a portion of the commissions generated by the agents working under them.

This oversight role means their income is tied to the overall productivity of their brokerage.

Brokers may also charge agents desk fees or other administrative fees to cover the brokerage costs.
Some brokers offer commission splits that are more favourable to agents in exchange for higher fees or other contributions.
Brokers can also earn income through property management services, training programmes, or other ancillary services offered by the brokerage.

Realtor Earnings

Realtors, who are members of the National Association of Realtors (NAR), adhere to a strict code of ethics and professional standards.

Their earnings are structured similarly to those of real estate agents, primarily through commissions on property sales.

However, being a Realtor can sometimes provide access to additional resources, training, and networking opportunities that can potentially boost one’s earnings.

Therefore, it’s essential to understand agent compliance obligations.

Realtors may invest in additional marketing or advertising to promote their services, which can impact their overall earnings.
The NAR offers various certifications and designations that can enhance a Realtor’s expertise and potentially command higher commissions.
Realtor earnings can also be influenced by their involvement in community activities and their reputation within the local market.

Legal Responsibilities & Compliance

It’s easy to think that once you’re licenced, you’re all set in the property industry.

But there’s a lot more to it than showing houses.

Compliance and ethics are super important, and each role – agent, broker, and realtor – has specific things they need to keep in mind.

Agent Compliance Obligations

Real estate agents have to follow a bunch of rules. They need to know the local and national laws about buying and selling property.

This includes things like:

Making sure all paperwork is filled out correctly.
Disclosing any problems with a property to potential buyers.
Avoiding any kind of discrimination.

Agents usually work under a broker, who helps ensure they abide by the law. It’s a team effort to stay on the right side of the law.

Broker Legal Responsibilities

Brokers have even more responsibility than agents. They’re in charge of making sure everyone in their brokerage follows the rules.

This means:

Supervising agents to make sure they’re acting ethically and legally.
Managing money properly, especially escrow accounts.
Keeping up-to-date with changes in real estate law.&

Pro Tip: Brokers are like captains of the ship. They are responsible for the entire operation and must ensure everyone is sailing in the right direction.

Realtor Ethical Standards

Realtors have an extra layer of responsibility because they are members of the National Association of Realtors (NAR). This means they must follow a strict Code of Ethics.

This code covers things like:

Being honest and fair in all dealings.
Putting clients’ interests first.
Avoiding conflicts of interest.

If a realtor breaks the Code of Ethics, the NAR could discipline them. The industry is all about maintaining a high standard of professionalism and trust.

Choosing the Right Professionals

When to Use a Real Estate Agent

Real estate agents are your go-to professionals for most standard property transactions.

They possess the local market knowledge and transactional skills to guide you through buying or selling a home.

If you’re a first-time homebuyer or selling a property that doesn’t have unique complexities, an agent is often the most suitable choice. They can help you find properties, negotiate offers, and manage the closing process.

New agents should track personal and business expenses to ensure they are on the right path.

Benefits of Hiring a Broker

Hiring a broker can be particularly beneficial when dealing with more complex real estate situations.

Brokers have a higher level of education and experience, making them well-equipped to handle intricate transactions involving commercial properties, investments, or situations requiring advanced negotiation skills.

Brokers can provide a deeper level of market analysis.
They often have a broader network of contacts.
Brokers are qualified to supervise other agents, so they bring a wealth of knowledge.

Pro Tip: Brokers often have a more comprehensive understanding of real estate transactions’ legal and financial aspects, which can be invaluable in complex deals.

Why Choose a Realtor?

Choosing a Realtor means you’re working with someone who has committed to a higher standard of ethical conduct.

Realtors are members of the National Association of Realtors (NAR) and adhere to its strict code of ethics. This provides an added layer of assurance that your agent will act with integrity and put your interests first.

Commitment to a code of ethics.
Access to a wide network of resources and information.
Ongoing professional development opportunities.

Wrapping It Up

In summary, while the terms real estate agent, broker, and realtor are often used interchangeably to refer to the same thing, they refer to different property market roles.

A real estate agent is the person you’ll likely work with directly when buying or selling a home. They’re licenced to help with these transactions but must work under a broker.

Brokers, on the other hand, have more training and can operate independently, sometimes managing a team of agents.

Then there are realtors, who are agents or brokers who are members of the National Association of Realtors, adhering to a strict code of ethics.

So, whether you’re looking to buy, sell, or even join the industry, knowing these differences can help you make more informed decisions.