馃攳
Real Estate Agent vs. Realtor vs. Broker - What's the Difference?? - YouTube
Channel: REtipster
[0]
So what's the difference
between a realtoror,
[2]
a real estate agent and
a real estate broker?
[4]
These terms often get thrown
around interchangeably,
[7]
but they actually have pretty distinct
differences between each other.
[11]
Let's start with the term realtor.
[13]
A realtor is a real estate professional who's
an active member of something called
[18]
the National Association of Realtors,
NAR for short.
[22]
It's an organization that fosters and promotes
best practices within the real estate industry.
[27]
You do not have to become a realtor
in order to hold a real estate license,
[31]
but you do have to hold a real estate
license in orderto become a realtor.
[36]
In fact, at the time of this recording,
I'm describing myself here.
[39]
I personally hold my real estate
license for the state of Indiana,
[43]
but I'm not currently a member of the
National Association of Realtors.
[46]
One of the major benefits
to joining the NAR
[49]
is that it gives you access
to something called
[51]
the Multiple Listing Service
or MLS for short,
[54]
which is a database of regional
properties that have sold in the past,
[58]
or that are currently on
the market for sale.
[60]
And therefore, most people who
get their real estate license
[63]
also become realtors.
[65]
In commercial real estate,
it's a little bit different though.
[67]
Access to the MLS is not as essential
because a lot of the deals that happen
[72]
happen off-market or through relationships
[75]
or through alternative databases like CoStar.
[77]
It's more common to find people
who are licensed, but not realtors
[81]
on the commercial side of real estate.
[83]
The National Association of Realtors
breaksup each state into different regions
[87]
and each region has its own local chapter.
[89]
In order to access the MLS
for a particular region,
[92]
a person would have to subscribe to that
regional chapter of the NAR.
[97]
To do so a person has to pay
annual membership fees,
[100]
attend the ongoing education
[102]
and agree to uphold certain
standards of professionalism.
[105]
So with that out of the way,
let's not talk about the difference
[109]
between a real estate agent
and a real estate broker.
[111]
The term real estate agent can
actually mean different things
[115]
depending on what state you're in.
[116]
Certain states run their real estate
licensing on a two-tier credential system
[120]
where on the lower tier, you have something
called the real estate salesperson
[124]
who people commonly refer to
as real estate agent.
[127]
And on the higher tier, you have
something called the real estate broker.
[131]
In this two-tier system
[133]
each designation requires an entirely
different set of tests and licensing,
[137]
but the broker designation is also requiring
two years of experience as a sales person.
[142]
And say, it's with this two-tier system,
[144]
you have to get your sales
person license first,
[147]
hold that license actively
for at least two years.
[150]
And then you can start the process to
obtain your broker's license, if you want.
[154]
In order for the salesperson to conduct
business legally in real estate,
[158]
they have to "hang" their
license under a real estate broker
[161]
and pay them a portion
of their commission.
[164]
The reason behind this is
that it's assumed
[166]
that a broker is more experienced
than the salesperson
[169]
and they will oversee their activities
[171]
and ensure that they're not making
any mistakes or causing problems.
[174]
Typically the broker will provide ongoing
resources like guidance, education
[179]
and business advice to the salesperson
[181]
and their compensation for that is a portion
of the sales person's commission.
[186]
So to recap in states with
this two-tier system,
[189]
our real estate professional that holds
[191]
their salesperson's license is commonly
referred to as a real estate agent.
[196]
Whereas someone who holds
a real estate broker's license
[199]
is simply called a real estate broker.
[201]
Now, in other states, this two-tier
system is still somewhat in effect,
[205]
but there's only one standardized
license in all of real estate,
[210]
namely the real estate brokers license
[212]
In these states, no one holds
a salesperson's license at all.
[216]
They only hold a broker's license.
[218]
The way these states distinguish between
[220]
the less-experienced broker
who still has to hang their license
[224]
and share a portion of
their commissions legally.
[226]
And the more experienced broker is
by requiring the more experienced broker
[231]
to hold an active license
for at least two years,
[233]
and then take a class that certifies them
[236]
as a managing broker.
[238]
So when in these states you have
brokers and managing brokers,
[241]
and here's where things
might get a little confusing.
[244]
Most people in the states refer to
non-managing brokers as real estate agents,
[249]
and then refer to managing
brokers as brokers.
[252]
Regardless of what state you're in
[253]
probably the easiest way to remember the difference between an agent and a broker
[257]
is to think of a real estate
agent as a professional
[260]
who primarily does business
just for themselves.
[262]
Whereas a broker normally runs
a real estate brokerage firm.
[266]
The real estate broker is normally
more experienced and serves more
[269]
in a management role
compared to the agent
[272]
who primarily focuses on sales.
[274]
To wrap this all up,
[275]
there is actually one exception
to what I've mentioned here.
[278]
In commercial real estate, most
real estate professionals
[281]
are universally referred to as brokers,
[283]
regardless if they hold
a sales person's license or not.
[287]
They simply distinguish
between the two-tiers
[289]
by calling one-tier a broker,
and one-tier a managing broker.
[292]
I hope this video at least cleared
some things up for you.
[295]
And if you found it helpful,
[296]
I think you're going to like this one
next on the screen here as well.
[299]
Go ahead and check it out
and I'll see you there.
Most Recent Videos:
You can go back to the homepage right here: Homepage