How Realtors Work

By: Dave Roos

Realtors vs. Real Estate Agents

Realtor walking through a home
Real estate agents, home appraisers, property managers, real estate counselors and brokers can be members of the National Association of Realtors (NAR) and earn the title of Realtor.
Justin Sullivan/Getty Images

The word Realtor is a trademark referring to someone who's an active member of the National Association of Realtors (NAR). In the United States, a real estate agent is licensed to help consumers buy and sell commercial or residential property. But not all real estate agents are Realtors, nor are all Realtors necessarily real estate agents. Home appraisers, property managers, real estate counselors and real estate brokers also can be members of the NAR, earning them the title of Realtors.

In the U.S., each state has its own requirements for becoming a licensed real estate agent. Most states require a minimum of 30 to 90 hours of classroom instruction in real estate fundamentals from an accredited college, university or technical school [source: Bureau of Labor Statistics]. After he or she has completed real estate school, the applicant needs to pass an official exam that covers real estate standards and practices, national real estate law and laws that affect that particular state. A real estate agent pays an annual fee for his or her license, which must be renewed every one or two years [source: Bureau of Labor Statistics]. Some states require a certain amount of continuing education to renew a license.


Only about half of all licensed real estate agents in the U.S. are Realtors or members of the NAR. To become a member of the NAR, you need to join your local real estate board or association. Real estate associations are often organized by county or region. You can look up your local board in the phone book or by searching the NAR Web site. Once you're a member of your local board, you're automatically extended membership into the national organization.

New NAR members must take an online course on the ethics code and pass an exam. Current members are required to take an online ethics refresher course every four years. Membership in a local real estate board or association requires an annual fee that covers membership dues for the NAR and any state-level real estate associations.

To qualify for membership, you must agree to adhere to NAR's strict code of ethics and standards of practice. The official ethics code is revised yearly to reflect the latest issues in real estate law and practice, and its core message is to "treat all parties honestly" [source: National Association of Realtors]. Although the primary responsibility of a buying or selling agent is to his or her client, Realtors promise never to mislead or withhold information from anyone involved in the real estate transaction -- including the other real estate agent and his or her clients.

The NAR ethics code is what separates Realtors from non-member real estate agents. Although the study of ethical principles is included in many state education and licensing programs, the NAR code obligates Realtors to follow the code of ethics and standards of practice that we discussed earlier. Part of the incentive for becoming a Realtor is to capitalize on the good reputation of NAR members. The idea is that consumers will opt to work with a real estate agent who has sworn to treat all parties fairly and honestly.

Like other trade organizations, the NAR offers members the benefit of a collective voice to lobby state and federal governments for improved legal protections. Through local associations, NAR members can network and learn best practices for their communities. And through annual conferences and continuing education courses, Realtors can polish their skills and improve their chances of success in this highly competitive industry.

Now let's look at exactly what a Realtor can do for someone who wants to sell his or her house.