Buyers and sellers often ask: “Is a Realtor better than a real estate agent?”

Some of the viewers of this blog post may be buyers, investors, and sellers. Therefore, before answering this question let’s explore the difference between a Realtor and a real estate agent.

 

Definition of a Real Estate Agent

 

Simply put, a state licenses a real estate agent to assist real estate buyers and sellers for a fee or a commission.

Becoming licensed requires taking mandatory courses and passing a state examination about important aspects of the real estate industry.

 

Definition of a Realtor® 

 

Notice the ® symbol after the word Realtor?

It means that the trademark word “Realtor” registered with the U.S. Patent & Trademark Office.  A registered trademark symbol gives the holder the exclusive right to use the trademark name. In other words, the ® symbol tells viewers that U.S. laws prevent unauthorized usage of the preceding name.

Basically, a real estate agent becomes a Realtor® by joining the National Association of Realtors (NAR). Since 1908, NAR became the largest trade association in the U.S.

Joining NAR requires obtaining a valid real estate license and associating with a brokerage member of NAR. In addition, NAR membership requires a spotless professional conduct record.

Realtors must abide by NAR’s Code of Ethics which sets forth professional standards when dealing with the public. This gives consumers the knowledge that working with a thoroughly vetted Realtor means a professional following the highest ethical and professional standards.

 

Summarizing the Difference between a Realtor and a Real Estate Agent

 

A real estate agent holds a state license to help people sell and buy real estate for compensation.

Real estate agents can become Realtors by joining a NAR member brokerage.

The Code of Ethics separates real estate agents from Realtors who swear to abide by them.

 

Is a Realtor Better Than a Real Estate Agent?

 

This question requires looking at the ethical conduct of Realtors and real estate agents. 

 

Are Realtors More Ethical?

 

This question begs for an answer. However, the real answer depends on the individual Realtor. A person swears an oath to follow an ethical code. But, will the person actually follow them?

The best answer is “Yes” if they adhere to the Ethics Code.

 

Are Real Estate Agents Unethical?

 

 Basically, “No”. 

Again, this depends upon the actions and morality of the individual real estate agent.

Just because they don’t swear an oath to follow a Code of Ethics doesn’t mean they are unethical.

 

Understanding NAR’s Code of Ethics

 

The National Association of Realtors Code of Ethics sets forth 17 articles that Realtors agree to obey. In essence, Realtors promise to be honest and fair to all parties they deal with. In addition, they pledge to put the interests of their clients above their own.

The 17 promises that Realtors swear to include the following Articles:

1. Putting the interests of the sellers and buyers ahead of their own and treating everyone honestly.

2. Refraining from exaggerations, misrepresentations, and concealing important facts about a property.

3. Cooperate with other agents and brokers in the best interests of their clients.

4. Disclosure when representing family members they help to buy or sell real estate. Disclose when they personally become a buyer or seller in a transaction. Also, they must disclose their status as a licensed real estate agent or broker.

5. Avoiding conflict of interests when the Realtor contemplates or has a present interest in a transaction. Disclose potential conflicts of interest to the parties.

6. Never collecting commissions on the side without disclosing such to the seller nor accepting fees from third parties without the seller’s affirmative consent.

7. Refuse fees from more than one party to a transaction without obtaining every party’s informed consent.

8. Never co-mingle client’s funds with the Realtor’s own.

9. Making sure that all written documents are easy to understand and providing copies to every signer.

10. Never to discriminate in any way or for any reason based on color, race, religion, sex, familial status, handicap, gender identity, sexual orientation, or national origin.

11. Conform to the standards of practice, be competent, and refuse to perform unqualified services.

12. Always be truthful in advertising and marketing.

13. Not practicing law unless the Realtor is an attorney.

14. Full cooperation whenever charges of unethical conduct against the Realtor arise and to provide all requested evidence.

15. Never bad mouth competitors and never file unsubstantiated ethical complaints.

16. Never solicit another Realtor’s clients nor interfere with a contractual relationship.

17. Agree to arbitration instead of legal actions to settle disputes between members.

To summarize, NAR’s Code of Ethics seeks honesty, fairness, cooperation, disclosure, avoiding conflicts of interest, and putting clients’ interest above the Realtor when dealing with all parties to transactions and the public.

Read NAR’s updated 2019 Code of Ethics and Standards of Practice effective January 1, 2019. NAR breaks down the 17 articles as follows:

• Duties to Clients and Customers
  Articles 1 – 9
• Duties to the Public
  Articles 10 – 14
• Duties to REALTORS®
  Articles 15 – 17

 

Enforcement of NAR Code of Ethics

 

But, does NAR actually enforce their Code of Ethics? Absolutely!

NAR’s Board of Professional Standards Committee establishes Hearing Panels to judge cases of alleged Code of Ethics violations.

Also, NAR publishes a Code of Ethics & Arbitration Manual showing examples of disciplinary rulings against Realtors violating the Code of Ethics. Some examples include:

Article 1 violated when the Realtor divulged knowledge about his client desiring a fast sale even if it meant accepting a sales price lower than the listed one. In essence, the Realtor failed to put his client’s interests above his own.

Article 3 violated when the Realtor failed to fully cooperate with other Realtors during a transaction.

Article 4 violated when the Realtor failed to disclose that his buyer was his father in law.

Article 5 violation when the Realtor failed to disclose his interest in a purchased property resulting in obtaining a lower price.

Article 6 violated when the Realtor acting as a property manager bought supplies at wholesale, but charged his client retail prices and pocketed the difference.

Article 7 violation occurred when the Realtor listing agent accepted a fee from both the buyer and the seller without disclosing this to the seller.

Article 8 violated when the Realtor failed to deposit a $10,000 earnest money check into a separate account.

Article 11 violation occurred when the Realtor conducted an appraisal of industrial property which inflated the sales price when the Realtor had no competency to perform appraisals.

Article 12 violated in 14 cases where the Realtors used false or deceptive advertisements regarding their listings.

Article 13 violations in two cases where Realtors gave legal advice and/or prepared a power of attorney required to be written by a licensed attorney.    

Since Articles 14 through 17 are new in 2019, no hearings exist regarding their violations.

 

Is a “Realtor” Better Than a “Real Estate Agent”? Conclusion

 

Is a Realtor® better than a real estate agent? This question calls for a case-by-case situation.

While Realtors swear to follow NAR’s Code of Ethics, not all do.

Real estate agents do not swear to follow a Code of Ethics. However, many are honest and fair and don’t engage in conflicts of interest, nor discrimination, or put their interests above their clients.

Each Realtor and real estate agent needs to be judged separately.

Join Us for a Realtor® 100% Commission Brokerage with totally transparent fees in the greater San Diego area. In addition, we offer Free Training to help you become a better Realtor. 

 

Steven Rich, MBA – Guest Blogger

 

We hope you liked our blog on “Is a “Realtor” Better Than a “Real Estate Agent”?”. For more local real estate related articles check out one of our many blog pages here.

 

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