A Realtor National Association of Realtors (NAR) member helps clients buy and sell real estate. Read on for more information on what Realtors do and how they differ from real estate agents.
Understanding Realtors
Real estate agents and Realtors have the same basic job function. Both represent buyers and sellers in property transactions. Both also typically earn their income in the form of commissions, and both must fulfill state licensing requirements.
Realtors have one extra qualification compared to real estate agents: membership to the NAR. As members, they pay annual dues and certify compliance with NAR member guidelines. Those guidelines are primarily the NAR Code of Ethics, which outlines standards of behavior for working with clients, the public, and other Realtors. NAR members must also complete ethics training once every three years.
Realtor ethics guidelines and violations
Broadly, the NAR ethics code requires Realtors to act in their clients' best interest. Realtors are prohibited from misleading clients, failing to disclose relevant information, withholding offers, and other unsavory or manipulative practices. They are required to be honest and transparent in all client matters.
The ethics code also bans hiring discrimination, hate speech, and advertisement of preferential treatment to any demographic group.
Penalties associated with confirmed violations of the ethics code can include:
- Fines of as much as $15,000.
- Suspension or termination of membership.
- Mandated coursework.
Choosing a Realtor or real estate agent
Unfortunately, no set of guidelines can completely prevent bad behavior. So, it's important to complete your own due diligence when selecting the right professional. Use the tips below to guide you.
- Know what you need. Some agents only work with buyers, and others work with sellers.
- Check references. Collect client references and then call those references. Ask former clients about the agent's professionalism, follow-up skills, and personality.
- Interview prospective agents. Buying or selling a home can be incredibly stressful. When inspection reports come back with bad news or negotiations go sideways, you need someone trustworthy and calm on your side. Use interviews to get a sense of the agent's personality and working style.
- Evaluate what they're telling you. Whether you're buying or selling, prospective agents will be opinionated about what you want to accomplish. An agent may tell you, for example, that your targeted home sale price is ambitious, reasonable, or conservative. Or that your goal to become a successful real estate investor is a great or bad idea. Look past the financial implications of that opinion and evaluate the logic behind it. You're probably better off with an agent who is honest and transparent vs. one who tells you what you want to hear.
- Ask for numbers. You can also ask prospective agents how many homes they've sold and the average sales price they've secured. The length of time on the market and list price vs. sales price for their listings are also useful data points.
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Broader implications of supporting NAR
It's your choice whether you prefer to work with a licensed real estate agent who's also a Realtor. Certainly, the added ethics requirements for Realtors may provide some comfort in the quality of service you'll receive. However, there are other positive and negative considerations you might find relevant. These include:
- Realtor resources. Active members get access to NAR real estate research, discounts on professional development programs, and a broad professional network.
- NAR political activities. The NAR is one of the top lobbying spenders in the U.S., funneling more than $80 million annually into advocacy activities. You may want to review the NAR's policy positions to ensure they align with your values.
- NAR legal issues. The NAR has been fending off antitrust lawsuits since the early 2000s. The association was recently slapped with a $1.8 billion verdict involving a conspiracy with brokerage firms to maintain artificially high commissions on home transactions, according to CNN.
There are an estimated 3 million licensed real estate agents in the U.S. About half of them are Realtors. If you live in a well-populated area, you likely have the choice to support the NAR and its Realtor members or not.
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