When navigating the evolving world of real estate, you may have encountered the terms “realtor” and “real estate agent.” While many people use these terms interchangeably, they refer to different roles within the real estate industry. Additionally, significant changes to commission structures are set to take effect on August 17th, which will impact both buyers and sellers. By being informed about these distinctions and changes, you can make better decisions and ensure a smoother real estate transaction experience. In this article, we’ll clarify these distinctions and explain the upcoming commission changes.
Realtors vs. Real Estate Agents
Real Estate Agents
A real estate agent is a licensed professional who assists clients in buying, selling, or renting properties. To become a real estate agent, individuals must complete a certain number of hours of education and pass a state exam. Once licensed, they can work independently or under the supervision of a broker. Real estate agents can represent either buyers or sellers, but they must adhere to state laws and regulations governing real estate transactions.
Realtors
A realtor, on the other hand, is a real estate agent who is a member of the National Association of Realtors (NAR). This membership signifies that the individual subscribes to a strict code of ethics and professional standards set forth by the NAR. Realtors often have access to additional resources, training, and networking opportunities that can enhance their ability to serve clients. While all realtors are real estate agents, not all real estate agents are realtors.
Key Differences
1. Membership: Realtors are members of NAR and must adhere to its code of ethics, while real estate agents may not have this affiliation.
2. Professional Standards: Realtors are held to higher standards of professionalism and ethics, which can provide clients with added assurance.
3. Resources Realtors: typically have access to a broader range of tools and resources, including exclusive listings and market data.
Upcoming Commission Changes: What to Expect After August 17th
Starting August 17th, new regulations will change the way real estate commissions are structured, impacting both buyers and sellers. These changes aim to promote transparency and fairness in the real estate market. Here’s what you need to know:
1. Commission Disclosure: Sellers will be required to disclose the commission they are offering to buyer’s agents upfront. This change is designed to ensure that buyers are aware of the costs associated with their purchase and can make informed decisions.
2. Negotiation of Commissions: Buyers will have more power to negotiate commissions with their agents. This means that buyers can discuss and agree upon the commission structure before entering into a buyer’s agency agreement, potentially leading to more competitive rates.
3. Impact on Seller Costs: Sellers may need to adjust their expectations regarding commission rates, as the new regulations could lead to increased competition among agents. This could benefit sellers by providing them with more options and potentially lower commission fees.
4. Transparency in Transactions: The new rules are designed to enhance transparency in real estate transactions, making it easier for buyers and sellers to understand the costs involved and the services provided by their agents.