Understanding Key Terms
Terms like broker, agent, salesperson, and realtor are often incorrectly used to mean one of the other terms. Each has a specific meaning, and knowing the difference is vital in the real estate business. We will go over the nuances of each below.
This is one who has gone through the process and obtained all the necessary licensing to sell, purchase, exchange, lease, or negotiate property. The salesperson or sales representative works under the direction and authority of the licensed broker.
The Broker has all the licenses of a salesperson and then some. The broker has additional licenses that allow them to work in a real estate brokerage, own, and operate the real estate company. The broker is the one who hires and supervises salespeople to work for them.
In a business transaction, such as the selling of property, the person working the deal is considered the “agent.” This is not an official term. However, with this definition, the salesperson, broker, and realtor can all be called an agent when they are carrying out the business transaction.
It is not required to be a realtor in order to sell, purchase, lease, or negotiate property. However, if one is a realtor, they are a member of the National Association of Realtors (NAR). Realtors must follow a specific and strict Code of Ethics and Standards of Business Practice in order to become and remain a realtor. With this comes an agree to periodically be monitored. This is to make sure they are following the code. For this reason, realtors have top-tier professionalism, honesty and integrity. While the real estate industry changes over time, the NAR offers classes and seminars often for its members stay up to date.