Real Estate Agent vs Broker vs Realtor: The Differences Explained

While the roles of an agent, broker, and Realtor often intersect, there are distinct differences between all three in the real estate industry. 

A real estate agent is a licensed professional who helps buyers, sellers and renters complete real estate transactions. An agent works for a broker who has completed additional training to secure their broker’s license. A broker can hire agents, work independently and run their own brokerage. A Realtor is an NAR member agent or broker. 

Agents, brokers and Realtors may all have specific areas of expertise, such as residential, commercial, rentals or property management.

• Real estate agent: A licensed professional who assists buyers, sellers, and renters in real estate transactions and negotiates on their clients' behalf.
• Real estate broker: An agent who studied to gain a real estate broker’s license from their state. Licensed brokers can work alone or start their own brokerage firm and hire other real estate agents to work with them.
• Realtor: A licensed real estate agent or broker who is a member of the National Association of Realtors (NAR). A Realtor must uphold NAR's Code of Ethics and Standards of Practice.

A real estate agent must complete their state's required prelicensing class and pass a state real estate license exam. Each state has specific requirements and training to become a real estate agent. In Massachusetts, 40 hours of prelicensing coursework is required, while Texas calls for 180 hours.   

After completing their prelicensing coursework, those studying to be agents typically take a written exam covering real estate best practices and federal and state-specific laws. A passing grade is typically 70% or 75%, depending on the state, and you must pass this exam to become a licensed agent. 

Real estate agents also take continuing education classes to maintain their licenses.

Depending on who they represent in a real estate transaction, an agent may function as the listing agent or the buyer’s agent.

• A listing agent (or seller’s agent) represents a home seller. They assist the seller by marketing their property, organizing and conducting open houses, and negotiating with buyers and buyer’s agents. These agents recommend home prices and updates to increase the home's value and the likelihood of a successful sale. They may help with home staging and market the property through the multiple listing service (MLS) and other channels.
• A buyer’s agent (or selling agent) works for the buyer. They help a buyer find suitable homes for sale, take them to showings and represent the purchaser's interests. The buyer’s agent negotiates with the current homeowner's agent and writes purchase offers.

Agents make offers, counteroffers and answer queries. After an offer is accepted, they guide the client through all the necessary paperwork. A real estate agent also assists with the closing process, including coordinating necessary inspections and appraisals.

An agent is legally obligated to act in their client's best interests, whether their client is the buyer or the seller. In some states, a real estate agent can represent both the buyer and the seller in a transaction, which is known as "dual agency."

An agent will use their expertise to make your homebuying or selling experience a smooth one. Whether you are buying or selling, they will work to expedite the process, eliminate stress and secure the best price possible. An experienced real estate agent also knows the local real estate market, zoning rules, contractors and other agents. They may have leads on properties that are not yet listed, giving you an advantage. 

A broker must complete more additional coursework than a real estate agent and pass a difficult exam to earn a broker’s license. Like the exams that real estate agents must take, the educational requirement for a broker’s license is set by each state. It typically includes subjects such as real estate contracts, ethics, insurance, taxes and the legal aspects of running a brokerage firm. 

To obtain a broker's license, an individual must also have a specific level of experience. The requirements are different in each state, but generally, between two and four years as an actively working and licensed real estate agent is needed. 

Some states, such as Colorado and Indiana, require as little as 24 hours of coursework to obtain a broker’s license. Others, like Texas and California, require 270 and 360 hours, respectively.

A broker typically operates independently or manages a brokerage. Real estate brokers have many of the same responsibilities as agents. They also manage and supervise agents who work within their brokerage. 

Brokers handle complex real estate transactions or disputes and oversee their brokerage’s day-to-day operations and marketing. They may or may not take on client work. If they do, some brokers will represent buyers, and some will represent the seller.

The different types of real estate brokers have varying degrees of responsibility.

• Associate Brokers: Associate brokers are fully licensed but work under another broker. They usually don’t supervise other agents.
• Managing Brokers: Managing brokers oversee transactions that occur as part of their brokerage. They also manage and train new agents, brokers and administrative staff.
• Principal/Designated Brokers: These brokers supervise agents in their brokerage and ensure that they comply with federal and state real estate laws. A principal broker gets paid by taking a portion of the commission earned by the agents they oversee. In many cases, they also earn a salary.

Every real estate office has one designated broker to ensure that the brokers and agents comply with state and national real estate laws.

An independent broker may have access to more properties, including those that are coming soon and not listed in the MLS. An established broker might have a team of agents who offer diverse expertise and personalized service.

Consider speaking with a broker if your real estate business involves luxury properties or a complex commercial deal. Also, consider a broker if your needs are unique, or you could use a team approach from people with diverse experience.

A Realtor is a real estate agent or broker who is an NAR member and must uphold NAR's Code of Ethics and Standards of Practice.

The Realtor’s responsibilities are similar to those of the real estate agent. However, while all realtors are agents or brokers, not all agents are Realtors. The perception of Realtors is that they command more trust and credibility because of their commitment to the ethical conduct of the NAR. 

Like a real estate agent, a Realtor may often specialize in residential or commercial real estate, or property management. A Realtor may also be a broker, salesperson or appraiser.

Like a real estate agent, a Realtor’s expertise guides you through the homebuying or selling process. Realtors also have access to NAR's resources, training, and member benefits, which may benefit their clients. 

Realtors, real estate agents and brokers are typically paid through commissions. In March 2024, NAR implemented new rules regarding commissions paid to real estate professionals.

Sellers used to pay both their broker and a buyer’s broker, which critics claim drove housing prices higher. The new rules allow prospective buyers to shop around for real estate agent and Realtor rates. It also requires buyers to have a written agreement with a broker before any property tours.

The type of real estate professional that you choose to work with should be based on your specific needs. Real estate agents, Realtors and brokers can all help you buy or sell a home, but each designation signals a specific level of education or professional membership.