Realtor vs. Real Estate Agent vs. Broker: Key Differences

Search Fintrev

Search our guides, reviews and glossary.

A real estate agent is anyone licensed by a state to help people buy, sell or rent property. A real estate broker holds a higher-level license that allows them to work independently, run a brokerage and supervise agents. A Realtor is an agent, broker or other real estate professional who belongs to the National Association of Realtors (NAR) and has agreed to follow its Code of Ethics. The first two are license levels. The third is a trade association membership.

One person can be all three at once. A broker who owns a small firm and pays NAR dues is a licensed real estate professional, a broker and a Realtor. A newly licensed agent who never joins NAR is only an agent.

Real estate agents

A real estate agent is a licensed professional who brings buyers and sellers (or landlords and tenants) together and earns a commission, typically a percentage of the sale price, when a deal closes. Depending on the state, the license may be called a salesperson license, and the holder may be called a sales associate.

How someone becomes an agent

Each state sets its own licensing rules. The common requirements are:

1. Be at least 18 years old.
2. Meet the state’s eligibility rules, including citizenship or legal-presence requirements.
3. Complete the state’s pre-licensing coursework, unless an exemption applies.
4. Pass the state licensing exam, unless a waiver or reciprocity arrangement with another state applies.
5. Complete fingerprinting or a background check.
6. Work under, or be associated with, a licensed broker.
7. Complete continuing education to keep the license active.

The broker association requirement is the core difference from a broker. An agent can find clients, write offers and negotiate, but the transaction runs through the sponsoring broker’s firm, and the broker is responsible for supervising that work.

What a real estate agent does

Agents coordinate the deal between the two sides. They relay offers, counteroffers and questions, work with the other side’s agent to move an accepted offer to closing, and guide clients through paperwork and deadlines such as inspection contingencies, appraisal timing and the closing date.

What the work looks like depends on which side the agent represents:

• Listing agents (seller’s agents) set an asking price, suggest repairs or updates that could improve the sale price and the odds of selling, advise on staging, and market the home through the local Multiple Listing Service (MLS) and other channels. They negotiate price, closing costs and other terms, prepare transaction documents, present offers and may keep transaction records.
• Buyer’s agents find properties that fit the buyer’s needs and budget, arrange showings, help coordinate inspections and the appraisal, negotiate for the buyer, and prepare and submit the required documents.

Dual agency

Some states allow one agent to represent both the buyer and the seller in the same transaction, which is called dual agency. It creates an obvious conflict: the seller wants the highest price and the buyer wants the lowest, and one person cannot fully advocate for both. States that permit dual agency typically require written disclosure and consent, and some prohibit it entirely. If an agent proposes representing both sides, your state’s agency disclosure forms spell out which duties the agent keeps and which are limited.

Real estate brokers

In most states, a real estate broker is someone who started as an agent and then met further requirements: more coursework, a set period of licensed experience, and a separate broker exam. The broker license is what allows a person to work without a sponsoring broker, open a brokerage under their own name and hire other agents.

A real estate brokerage is the licensed firm through which agents conduct transactions, from a two-person independent office to a large national company, and each must have a broker responsible for it.

What real estate brokers do

Brokers do much of the same client work as agents. On the buy side, they look for properties that meet a client’s criteria, prepare offers, negotiate and handle issues through closing. On the sell side, they estimate market value, list and show the property, relay offers and manage the offer process.

The added duties come from supervision and accountability. A broker’s responsibilities can include:

• Reviewing contracts and transaction files prepared by agents
• Holding client deposits, such as earnest money, in escrow or trust accounts as state law requires
• Training agents and making sure they follow state real estate law and fair housing law
• Handling disputes and complaints that arise from the firm’s transactions
• Managing the office, staff and the firm’s commission arrangements with its agents

Types of brokers

Broker titles vary by state, but three tiers are common:

1. Associate brokers hold a broker license but choose to work under another broker. They generally do not supervise agents. Some prefer the support of an established firm; others want the broker credential without the liability of running an office.
2. Managing brokers run daily operations and oversee transactions in an office. They often hire and train agents and manage administrative staff.
3. Principal or designated brokers are ultimately responsible for making sure the firm’s agents comply with state and federal real estate law. Each firm generally must have a designated broker, while rules for supervising branch offices differ by state.

Terminology can also shift the line between agent and broker. A few states, such as Illinois and Colorado, license every practitioner as a broker and use a separate managing or employing broker license for supervision. In those states, the person showing you homes may be titled “broker” while still working under someone else’s oversight, so the title does not mean they run a firm.

Realtors

A Realtor is a real estate professional who is a member of the National Association of Realtors. The term is often used as a synonym for “real estate agent,” but it is a trademark, and membership is open to several kinds of professionals, including:

• Residential and commercial brokers
• Sales agents
• Property managers
• Appraisers

In its 2025 Member Profile, NAR reported roughly 1.4 million members nationwide, with licensed sales agents making up 64% of them. That means a large share of active agents are Realtors, but not all are, and not every Realtor sells homes.

The Code of Ethics

What membership adds is the NAR Code of Ethics. It requires Realtors to deal honestly with all parties, protect and promote their clients’ interests, and meet specific disclosure obligations. Complaints that a member violated the code are handled through the local Realtor association, which can impose discipline. That process is separate from the state regulator, which handles violations of license law and can suspend or revoke a license.

How to become a Realtor

Requirements are set by NAR and its local associations, but they generally include:

1. Holding a valid, active real estate license (local bylaws may extend eligibility to some other professionals)
2. Being actively engaged in the real estate business
3. Having no record of official sanctions for unprofessional conduct
4. Having no recent or pending bankruptcy, although local associations may consider the circumstances

Members join through a local association, may pay a one-time application fee, and pay annual dues to keep their status. Members are licensed to use the Realtor trademark with their name, but the mark describes membership only. It cannot be used to indicate what license a person holds.

How agents, brokers and Realtors get paid

All three are typically paid by commission, a percentage of the sale price collected at closing. U.S. residential commissions have historically been cited in the 5% to 6% range for both sides combined, but there is no set rate, and the amount is negotiable.

Commission rules changed after NAR settled a lawsuit in March 2024 over claims that it and others had kept commissions inflated. Under the settlement, offers of compensation to buyer’s agents can no longer be advertised on the MLS, and buyers working with an agent must sign a written agreement that states how the agent will be paid and discloses that fees are fully negotiable. Sellers can still agree to pay some or all of a buyer’s agent’s fee, but it is now a term to negotiate rather than an assumption built into the listing.

Example of how a commission is divided

The figures below are hypothetical and chosen only to show the mechanics:

• A home sells for $400,000. The seller agreed to pay 2.5% to the listing brokerage and agreed in the purchase contract to pay 2.5% to the buyer’s brokerage, for 5% total.
• Total commission: $400,000 × 5% = $20,000, or $10,000 to each brokerage.
• The commission goes to the brokerage, not directly to the agent. If the listing agent’s arrangement with their broker is a 70/30 split, the agent receives $7,000 and the brokerage keeps $3,000.
• If the buyer’s agent is an associate broker on a 60/40 split, they receive $6,000 and their firm keeps $4,000.
• If the listing agent were also the principal broker who owns the firm, there would be no split with a supervising broker, and the full $10,000 would stay with that broker’s company (before the firm’s own expenses).

Is it better to use a broker or an agent?

For most buyers and sellers, the license level matters less than the individual’s experience in your market and property type. An agent with years of local sales can serve you as well as a broker, and every agent’s work is supervised by a broker anyway.

A few differences can be relevant. An independent broker who owns the firm sets its policies, so they may have more room to negotiate fees than an agent who must follow a brokerage’s commission rules. A broker also answers for the transaction directly, while with an agent, problems escalate to the supervising broker. Whether the person is a Realtor tells you they have accepted the Code of Ethics and an additional complaint process; it does not tell you they are more skilled.

Questions that reveal more than a title:

• How many transactions like mine have you handled in this area recently?
• Who is your supervising or managing broker, and how do I reach them if there is a problem?
• What exactly are you charging, and what services does that include?
• Do you or your firm practice dual agency, and how would you handle it?

Using a broker to rent

Agents and brokers also handle rentals. For landlords they list units and screen applicants; for tenants they find apartments and help with applications. In some competitive markets, tenants have paid broker fees of about one to two months’ rent, sometimes split between the tenant’s broker and the listing broker in co-brokered deals. Some cities regulate who pays the fee.

FAQs

The Bottom Line

Buyers, sellers and renters choosing a real estate professional can treat titles as a starting point. License level and Realtor membership say little about skill, so local experience with your property type matters more. Ask who supervises the agent, what the fee covers and whether the firm practices dual agency, and remember that commissions are negotiable.