Real Estate Broker or Realtor: What’s the Difference?
Buying investment property is good for your financial future, and there’s nothing quite as exciting as signing the paperwork on your first commercial or residential real estate property. If you’re new to the game, however, it’s normal to feel a little overwhelmed or uncertain at first, due to the sheer volume of information coming your way. Even the terms for real estate professionals can get confusing. For example, do you need a real estate broker or a REALTOR®? And how can you tell the difference?
Our Nashville-based real estate experts outline the differences between affiliate brokers, real estate brokers, and REALTORS® in this article so it’s crystal clear which one you need for your next commercial or residential real estate project. Let’s start with affiliate brokers first.
Affiliate Broker/Real Estate Agent
An affiliate broker or real estate agent is a licensed real estate professional who can legally help people buy, sell, or rent real estate. However, an affiliate broker has not earned the additional education and experience required to become a real estate broker, and therefore is not able to legally own their own brokerage firm.
Becoming an affiliate broker is one of the first steps to becoming a real estate broker, and until an affiliate broker takes the additional steps to move up to real estate broker, they may not work independently or hire other real estate professionals to work for them.
Real Estate Broker
A real estate broker is a licensed real estate professional who has met the state’s requirements to work independently and/or hire other brokers. In order to receive a real estate broker license in Tennessee, brokers must take an examination through the Tennessee Real Estate Commission. To be eligible for the examination, applicants must:
- Hold an active affiliate broker license for two years (if licensed on or before May 12, 1988, OR holds a bachelor’s degree majoring in real estate) or three years (if licensed after May 12, 1988).
- Have successfully completed 120 classroom hours of approved real estate education, including 30 hours of an “Office/Broker Management” course taken at an approved school.
- Complete continuing education credits for license renewal.
Real estate brokers might focus on helping buyers find properties based on their needs, or they may work to get sellers the best deal possible for their properties. Additionally, brokers may choose to specialize their efforts, especially after being in the business for a while. Brokers might take the titles of:
- Principle or Designated Broker: oversees all the other agents and makes sure everyone is following all relevant rules and regulations.
- Managing Broker: manages day-to-day running of the real estate office including hiring, training, and overseeing administrative staff.
Because real estate brokers are required to hold affiliate licenses for two to three years before they can sit for a broker exam, by the time they receive their licenses, they have a fair amount of experience and knowledge of their field. If you find a real estate broker working with a reputable local brokerage, you’ll be in good hands whether selling or buying.
A REALTOR® is a real estate broker or other real estate professional, such as a salesperson or property manager, who maintains good standing membership in either The National Association of REALTORS® (NAR) or their local branch office. Both affiliate brokers and real estate brokers can become REALTORS® as this term refers only to a membership with NAR. While either type of broker can be a REALTOR®, the ability to claim this title indicates that the individual has met many high standards in the field.
In addition to paying regular dues, members of NAR or Nashville’s local branch, Greater Nashville REALTORS®, must meet rigorous professional standards, including:
- Holding an active real estate license
- Completing 16 hours of continuing education every two years
- Keeping a clean record free of ethical violations
- Completing a Code of Ethics course every three years
- Having no pending or recent bankruptcy
Organizations like NAR and Greater Nashville REALTORS® exist to provide real estate professionals the tools and support they need to maintain the highest level of professionalism in terms of both knowledge and ethical conduct. Membership in NAR or one of its local counterparts gives brokers accountability that means peace of mind for the real estate clients they work with.
In other words, you can hire a REALTOR® for any of the real estate needs that you’d use a broker for, but the REALTOR® will have to meet the higher standards of their organization when it comes to transparency and working in your best interests, in addition to state and national laws.
In Need of a Nashville-Area REALTOR® or Real Estate Broker?
If you’re looking for a new partner in your search for commercial or residential real estate, we would love to help you find that perfect investment. Our team knows Nashville inside and out, and we love to show our clients the hidden gems that those less familiar with the area might miss.
Hinge Development & Realty serves the Greater Nashville Area, including Franklin and Brentwood. Contact us any time – our REALTORS® will be happy to discuss your investment property needs.