A realtor is a real estate professional who belongs to the National Association of Realtors (NAR). Although it has many other properties, the NAR is best known for its strict ethics code.
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How to become a realtor
The main requirement is that you get a real estate or appraisal license before applying to become a member. Besides that, here are some other properties they look out for:
- You should not have previously exhibited unprofessional conduct, usually through sanctions or penalties.
- You should not have been recently bankrupt or about to be declared bankrupt.
To become a realtor, you have to join your local association from where you will be inducted into the national association.
In addition to that, you have to take an online course and pass a code of ethics exam. There will be a refresher course every four years.
You also have to pay a membership fee that you will renew every four years.
Real Estate Agents vs Realtors
The name “Realtor” is a title held by someone who’s a member of the National Association of Realtors (NAR). It is more of a trademark than a generic term.
A realtor does not have to be a real estate agent. For example, a realtor can be a property manager or a real estate broker; the base requirement is for you to be a member of the NAR.
The term “real estate agent”, on the other hand, is generic in that it refers to someone who is licensed to help people buy or sell real estate (residential and commercial).
You can be a real estate agent as well as a realtor if you belong to the NAR. Likewise, if you undertake the duties of an agent but aren’t a member of the NAR, you are not a realtor.
Around half of all real estate agents in the US are members of the NAR.
To become a real estate agent, you have to attend a class in a certified institution where they teach real estate fundamentals. After that, you sit for an exam and if you pass it, you are issued with a license. You have to pay for your license annually or every two years depending on State laws.
Realtors go a step further and join the local real estate board or association. You have to take a course on the NAR code of ethics and sit for an exam to be admitted to the organization. This code of ethics is what separates realtors from real estate agents.
The code of ethics
As we have established, a strict ethics code separates realtors from other real estate professionals. One of the key pillars of this code is that you have to “treat all parties honestly.”
Although you have to take care of your client’s needs and represent their interests, you have to avoid misinforming other parties through either the error of commission or omission. You should also not withhold useful information from anyone involved in the transaction, including your opposite number and their client.
Since this code is what separates realtors from normal agents, the NAR insists that its members follow it to the letter. The direct benefit is that it gives its members, realtors, a glowing reputation, which is a welcome advantage in a highly competitive market.
The code is updated every year to reflect any legal or professional changes that may have occurred during the interim period.
Who can be a realtor
As mentioned above, real estate agents, salespeople, property managers, real estate brokers, appraisers, and other real estate professionals can be realtors if they are duly registered with the NAR.
Benefits of being a realtor
As we saw earlier, realtors enjoy a good reputation among real estate professionals making them more likely to land clients in a competitive market. Clients will generally prefer an agent who follows a strict code and, therefore, appears to be more trustworthy.
Second, belonging to the NAR is like belonging to a workers’ organization. Consequently, it gives its members a collective voice that is powerful enough to lobby state governments or federal agencies for better legal protection.
It also gives its members a platform to interact with one another and network with other agents within their communities.
You gain access to educational materials on the official website or the magazine. You may also be offered additional training or affiliated with special programs.
People usually mistakenly use the terms “real estate agent” and “realtor” interchangeably. This may be technically incorrect especially if the agent or broker in question is not a member of the NAR.
It is important to note that although non-realtors don’t belong to the association, they are still held to very high standards and the lines tend to be blurred when distinguishing the two in that regard. This explains why many non-realtors are still successful.