Should you hire a “realtor” or a REALTOR® to help you buy or sell a home? A common misconception is that all real estate agents are both, but that isn’t true. The difference is important, so let’s look at how each term is used and why the difference matters.
First, what is a REALTOR®? It’s simply a real estate professional who is a member of the National Association of REALTORS® (NAR). The term is a federally registered mark and has no other formal meaning. Its history dates back to the founding of NAR in 1916 and subsequent registration of the REALTOR® mark in 1949 and 1950. The word “realtor” is a neologism (newly created word) that NAR developed to identify its members and set them apart from non-members in the real estate profession. Like many trademarked names often used to describe a type of product rather than the specific manufacturer (e.g. Kleenex®, Xerox®, Aspirin®), it has become generic slang for all real estate agents. Many brokers and agents – including NAR members – still misuse the trademark regularly. However, NAR has successfully defended the exclusive application of “realtor” to define a NAR member as recently as 2004, when the U.S. Trademark Trial and Appeal Board upheld the trademark and ruled that use of “realtor” as a generic term is a trademark violation. NAR requires capitalization of the entire word followed by the circle R registration symbol for the trademark to be used properly.
Being a REALTOR® (NAR member) is not a requirement to become a real estate broker or agent. Real estate professionals are licensed by the state where they conduct business and typically only a license is required to sell real estate services. If a broker or agent breaks the law or violates real estate regulations, the government is where consumers should turn for resolution (recommend consulting with an attorney when this happens). NAR, in addition to being a strong national advocate for policies that promote home ownership, provides valuable member training through its state and local affiliates (boards or associations) and, most importantly, enforces member compliance with its Code Of Ethics. Some business activities that may be considered legal may not be ethical, and the Code provides requirements for ethical conduct as REALTORS® interact with consumers and with other real estate professionals. Ethics violations may be reported to local associations by consumers or brokers and agents. NAR continuously updates the Code to keep it current and maintains internal policies for dealing with violations.
It’s also important to mention that being a REALTOR® is a requirement for subscribing to most local Multiple Listing Services (MLS). Some agents choose not to subscribe to the MLS, either to save money or because they are not a REALTOR®. Instead, they post and view listings on Zillow®, Trulia®, REALTOR.com or other consumer-access listing sites. They save the cost of the MLS subscription and NAR dues, but this tactic can have two problems that effect the agent’s clients. The first is that many agents working with buyers don’t always monitor these web sites, they scan the MLS and other sources for available listings. Second, some brokerages do not syndicate their listings to these sites – the only way to view them is on the MLS.
As mentioned above, some REALTORS® refer to themselves as a realtor, either because they haven’t been properly trained or supervised by their broker or because they have fallen into the bad habit of using slang into their vocabulary. To know if a broker or agent is a REALTOR® – ask them. Be careful how you ask, though. Here are examples of the wrong way and the right way.
Buyer: “Are you a REALTOR®?”
Agent: “Yes, I am a realtor.”
Buyer: “Are you a member of the National Association Of REALTORS®?”
Agent: “Yes, I am a REALTOR®.”
Finally, are agents who are not NAR members inherently less qualified, unethical or otherwise inferior to a REALTOR®? Certainly not. Every real estate professional should be judged by potential clients based on their individual merits. However, they should refrain from referring to themselves as realtors, as should NAR members.
Have a great week!
Please note – I am a REALTOR®, but I do not represent NAR or any of its local associations and the opinions expressed above are purely my own.
Have questions about real estate terminology or any other topic relating to buying and selling real estate? Drop me a line!