Realtor: Definition, How It Works, Types, and Examples
Summary:
A realtor is a licensed real estate professional who is a member of the National Association of Realtors (NAR). Realtors must adhere to a strict Code of Ethics, ensuring they operate with integrity and in their clients’ best interests. When buying or selling property, having a professional with in-depth market knowledge and a strict code of ethics can make all the difference.
Who is a realtor?
A realtor is a real estate professional who is a member of the National Association of Realtors (NAR), the largest trade association in the United States. Realtors are not just any real estate agents— they are professionals who adhere to the NAR’s stringent Code of Ethics, which requires a commitment to maintaining high standards of professionalism, integrity, and customer service. Whether working as a broker, salesperson, or property manager, all realtors must be licensed to perform real estate transactions in their respective states and pledge to protect their client’s best interests.
Realtor vs. real estate agent
While all realtors are licensed real estate agents, not all real estate agents are realtors. The main difference lies in membership and adherence to the NAR Code of Ethics. Real estate agents may represent buyers or sellers in property transactions but are not required to join the NAR or follow its ethical guidelines. Realtors, on the other hand, are required to meet ongoing educational requirements, participate in their local and state realtor boards, and abide by a higher ethical standard.
Realtors’ qualifications and responsibilities
Membership requirements for NAR
To become a realtor, one must be a member of the NAR, which involves a multi-step process. First, the individual must be a licensed real estate agent in good standing. They must also agree to abide by the NAR’s Code of Ethics, which mandates honesty and fairness in all dealings, especially when representing clients. Realtors must maintain membership in their local and state realtor boards, attend professional development courses, and complete NAR’s continuing education requirements.
The NAR Code of Ethics
One of the defining features of a realtor is their commitment to the NAR Code of Ethics, which serves as a moral guideline for their professional conduct. The code covers various aspects of the job, from client relationships to transparency in property listings. Realtors are obligated to provide accurate information to clients and customers, avoid exaggerations or misrepresentations of facts, and always prioritize the best interests of their clients. This ethical framework makes realtors more trustworthy partners in real estate transactions.
The evolution of the National Association of Realtors (NAR)
Early history of the NAR
The National Association of Realtors was founded in 1908 as the National Association of Real Estate Exchanges. With just 120 members and 19 local boards at its inception, the organization was created to establish a network of real estate professionals who could collaborate, share knowledge, and promote high standards in the industry. Over the decades, the association grew rapidly, and in 1916, it officially adopted the term “Realtor” to distinguish its members from other real estate professionals.
The modern role of NAR
Today, the NAR has over 1.5 million members across the United States, consisting of brokers, associate brokers, sales agents, property managers, appraisers, and other real estate professionals. The organization provides its members with extensive resources, including education, networking opportunities, market research, and legislative advocacy at the federal level. NAR’s influence extends beyond individual agents; it plays a significant role in shaping real estate policies and industry standards across the country.
How the Realtor trademark works
Guidelines for using the Realtor trademark
The Realtor trademark is protected by federal law, and only NAR members are permitted to use it in connection with their professional services. According to the NAR, the term “Realtor” should always appear in capital letters and must be separated from a member’s name by punctuation. For example, “Jane Doe, REALTOR®” would be an appropriate usage. This trademark is not to be used to describe the professional’s vocation, such as “real estate agent” or “broker,” and cannot be part of a legal business name. Members must also cease using the term if their membership is suspended or revoked.
Common mistakes in using the Realtor trademark
One of the most common violations of the NAR’s trademark guidelines is the misuse of the term “Realtor” as part of a company name. For instance, naming a firm “Realtor Experts LLC” would be in violation because the trademark cannot form part of a legal entity’s name. Additionally, using the trademark as a generic term to describe real estate professionals is prohibited. The NAR vigorously defends its trademark rights and has a strict policy to ensure that only qualifying members can use the Realtor title.
Benefits of working with a realtor
Hiring a realtor offers numerous advantages, especially when navigating the complex world of real estate transactions. Realtors bring specialized expertise to the table, including an intimate understanding of local market conditions, property values, and negotiation strategies. Their ethical obligation to act in their client’s best interest ensures transparency and trustworthiness throughout the process.
Risks of not using a realtor
While some homebuyers and sellers may consider going the “For Sale by Owner” (FSBO) route to avoid paying a commission, doing so can often lead to costly mistakes. Without the guidance of a licensed professional, individuals might misprice their homes, struggle with legal paperwork, or miss out on key opportunities. Realtors ensure that contracts are legally sound, inspections are thorough, and that the entire transaction is conducted smoothly. Their fee, typically a percentage of the sale price, is often well worth the peace of mind and time saved.
Conclusion
In the complex world of real estate, a realtor provides valuable expertise, ethical oversight, and a commitment to client satisfaction. By choosing to work with a realtor, whether you are buying or selling property, you ensure that you have a licensed professional who is not only knowledgeable but also bound by a code of ethics designed to protect your interests.
Frequently asked questions
What is the difference between a real estate agent and a realtor?
The primary difference is that all realtors are real estate agents, but not all real estate agents are realtors. Realtors are members of the National Association of Realtors (NAR) and adhere to its strict Code of Ethics, which sets them apart from non-member agents.
What services do realtors provide?
Realtors offer a variety of services, including helping buyers find homes, assisting sellers in listing and marketing properties, handling paperwork, negotiating contracts, and ensuring compliance with real estate laws and regulations. They also provide advice on market trends, property values, and financing options.
Is it mandatory to work with a realtor?
No, it’s not mandatory, but it is highly recommended. Realtors provide expertise, market insight, and negotiation skills that can make a significant difference in the outcome of a real estate transaction. Their experience and access to exclusive resources can save you time, money, and stress.
Key takeaways
- A realtor is a licensed real estate professional
who is a member of the National Association of Realtors (NAR) and adheres to the organization’s Code of Ethics. - Not all real estate agents are realtors. The title of realtor signifies membership in the NAR and a commitment to high ethical standards.
- Realtors offer a variety of services, including property sales, buyer representation, and property management, all while adhering to local regulations and ethical guidelines.
- Working with a realtor can provide access to exclusive resources like the Multiple Listing Service (MLS), as well as expert knowledge in property negotiations and legal requirements.
- The NAR’s Code of Ethics requires that realtors act in the best interests of their clients, providing an added level of trust and transparency in real estate transactions.
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