Difference between an Agent, Broker, Realtor and Facilitator
Prior to our arrival in the US, my husband and I knew of only one term that would describe the business facilitating real estate transactions: Real Estate Agent.
I remember being very confused when we were looking for a place to rent. First of all navigating the myriad of platforms out there (Zillow, Trulia, Redfin, Craigslist), then figuring out typical area rents and finally trying (and failing) to get answers.
Through it all, we were the most confused by the unheard terminologies: Broker, Realtor and Facilitator.
What’s a Broker? To say that someone brokered a deal is to interpret that the individual played a middleman’s role in bringing terms from both sides to an agreeable state. So would every transaction require a Broker to broker the terms between two Agents?
What’s a Realtor? And why on earth are people yelling it out and writing the noun in caps?! So necessary. Realtor… never heard of it, but presumably an industry term for a real estate agent. Survey land? Surveyor. Decorate cakes? Decorator. In real estate? Realtor.
Facilitator is the most confusing, and annoying of all. It’s as vague as someone saying that they are a Manager. Which, by the way, was the title of my first job- ha! It always invited a pregnant pause and an awkward elaboration after. What industry, and what exactly are you managing? So yes, I couldn’t believe it when I saw “Real Estate Facilitator”! Not again?! What specific part of the transaction does the Facilitator exactly facilitate?!
To my foreign friends and aliens out there, this one is for you.
real estate Agent
Self-explanatory, right?
Someone who has taken the real estate exam and is freshly licensed starts off as an Agent.
Real Estate Broker
A Broker, in my simplified interpretation, feels like the difference in roles between a Teacher and a Principal.
A Principal is not an entry-level profession- there needs to be a certain number of years of teaching experience before one could even apply for the job. Both can teach, and the Principal has a higher authority in a school.
In the US, a real estate Agent has to work under a real estate Broker in order for the license to be active. One cannot simply pass the exam, walk out of the hall and immediately list a house for sale. Unless you are a Broker, you have to be attached to one.
So is my Broker Keller Williams then?
Nope. Keller Williams Realty is the brokerage office to which I’m attached.
In that brokerage office, there is a Broker who activates my license, along with that of all other 143 Agents’ in the office. That Broker is Susan Rochwarg. Susan is far from merely existing to activate our licenses… she’s out there in the field working like most Agents do too.
Summarized version of KW Realty’s organization chart. Photo credits: Susan Rochwarg, Freepik.com
Each state in the US has a different requirement for licensing real estate Brokers. Typically it requires a certain amount of time as an Agent as well as further education and testing before obtaining the license. In Massachusetts, a Broker application requires 3 years of experience working as an active Agent, 40 additional hours of real estate education and a successful completion of licensing exams.
Is a Broker better than an Agent then?
Not necessarily. Not even when you’re comparing a freshly licensed Broker and an Agent.
The years don’t mean a thing. Note in the criteria for obtaining a Broker’s license above, there is no requirement for any forms of measurable success. I could technically kick back and not do anything for the rest of my time, wait for my 3rd year mark, study some materials and be licensed as a Broker.
Realtor®
A Realtor is not a 3rd level progression after a Broker.
It’s actually a trademark coined by the National Association of REALTORS® (NAR) back in 1915.
Since the unique term REALTOR® was first coined in 1915, the public has come to recognize those who use the MARKS as members of NAR and, as such, providers of real estate related services consistent with a strict Code of Ethics and the highest standards of professionalism.
- NAR Membership Marks Manual
The NAR is a pretty big deal here in the US.
It’s America’s largest trade association that represents a whooping 1.3 million members that come from all aspects of the residential and commercial real estate industries. NAR is actively involved in federal level political advocacy, from tax reforms to issues that directly affect home owners like flood insurance.
Just last Friday, its work contributed to a bill that prohibits all forms of housing discrimination against the LGBT community. :)
You may not be able to identify with the work of NAR, but at the least, know that a real estate professional who is member subscribes to its strict Code of Ethics.
The Code of Ethics is comprised of 17 articles which speaks about duties to clients and customers, the public and other REALTORS®. Then there’s the Golden Rule: “Whatsoever ye would that others should do to you, do ye even so to them.”.
You could be skeptical about whether member Agents abide by the Code of not, but in my experience people take it pretty seriously - as do I. There’s really no point belonging to an association if you don’t subscribe to its standards.
The NAR lists 7 reasons to work with a REALTOR®:
Ethical treatment. Every REALTOR® must adhere to a strict code of ethics, which is based on professionalism and protection of the public. As a REALTOR®’s client, you can expect honest and ethical treatment in all transaction-related matters. The first obligation is to you, the client.
An expert guide. Buying a home usually requires dozens of forms, reports, disclosures, and other technical documents. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes. Also, there’s a lot of jargon involved, so you want to work with a professional who can speak the language.
Objective information and opinions. REALTORS® can provide local information on utilities, zoning, schools, and more. They also have objective information about each property. REALTORS® can use that data to help you determine if the property has what you need. By understanding both your needs and search area, they can also point out neighborhoods you don’t know much about but that might suit your needs better than you’d thought.
Expanded search power. Sometimes properties are available but not actively advertised. A REALTOR® can help you find opportunities not listed on home search sites and can help you avoid out-of-date listings that might be showing up as available online but are no longer on the market.
Negotiation knowledge. There are many factors up for discussion in a deal. A REALTOR® will look at every angle from your perspective, including crafting a purchase agreement that allows enough time for you to complete inspections and investigations of the property before you are bound to complete the purchase.
Up-to-date experience. Most people buy only a few homes in their lifetime, usually with quite a few years in between each purchase. Even if you’ve done it before, laws and regulations change. REALTORS® handle hundreds of transactions over the course of their career.
Your rock during emotional moments. A home is so much more than four walls and a roof. And for most people, property represents the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on the issues most important to you.
Do these reasons truly set a REALTOR® Agent apart from a non-member?
(Argh, I’m really not a fan of writing in caps.)
For the fact that these reasons are not quantitatively measurable, my objective opinion is that membership alone does not prove capability, nor integrity.
It depends on an individual’s effort - how much one subscribes to the Code of Ethics, and how often one taps into the free training resources that NAR provides. Just like a Broker, you could be a REALTOR® and be dormant in your practice of real estate.
Facilitator
Time to tackle this vague role.
Best explained using the Massachusetts Mandatory Real Estate Licensee Consumer Relationship Disclosure.
People often mistake this document for a contract which binds them to the real estate agent/broker, and are naturally guarded against signing anything.
It’s not a contract, it’s a disclosure of role.
Why is disclosure important?
Imagine you’re a potential buyer of a house that you see. You love it, and begin talking to the seller’s Agent who is showing the house. The Agent points out attributes of the house and reasons that it’s a fab purchase at $850,000. Could you take the Agent’s word for that it’s a great property?
Maybe yes. Objectively not!
This is because the seller’s Agent must put the seller's interests first and attempt to negotiate price and terms acceptable to their seller client. Their loyalty and duty is with the SELLER, not you, the buyer.
The roles are clearly defined for a Seller’s Agent and Buyer’s Agent.
A Facilitator is simply the role of an Agent before the client elects the Agent as a buyer or seller’s representative.
The requirement by MA state law to disclose my role at first meeting, coupled with the fact that I shouldn’t presume my clients would appoint me as their Agent, makes up the role of a Facilitator:
“When a real estate licensee works as a facilitator that licensee assists the seller and/or buyer in reaching an agreement but does not represent either the seller or buyer in the transaction. The facilitator and the broker with whom the facilitator is affiliated, owe the seller and buyer a duty to present all real property honestly and accurately by disclosing known material defects and owe a duty to account for funds. Unless otherwise agreed, the facilitator has no duty to keep information received from a seller or buyer confidential.”
Human trust should be the core of real estate transactions
Remember, at the end of the day choosing an Agent should be more than a recognizable brokerage office, affiliations, designations or years of industry, though these factors do lend weight.
I firmly believe that it should be about gut feel and trust.
The advent of real estate online apps that are telling consumers that the home buying/selling experience does not need to be a human transaction, is dangerous messaging.
While I don’t deny that I welcome digitalization to the process, the core should always be human trust. You’re buying a house to live in and to enjoy with friends and family. You need to know that someone who is a professional in the field has your back and would help you to the nth degree.
It’s that simple, folks!