Learn all about the specifics of becoming a realtor.
A Realtor is real estate professional who is a paying member of the National Association of Realtors (NAR). There are specific mandates involved with becoming a Realtor, identified by the registered trademark REALTOR®. The role of a Realtor is to provide expertise to a buyer or seller before and during a real estate transaction. Once a contract is signed with a buyer or seller, the Realtor is bound to operate in the best interest of the client while upholding the code of ethics of the National Association of Realtors. Realtors also abide by the real estate license laws, which the Association of Real Estate License Law Officials (ARELLO) enforces to protect the public interest. The Realtor is paid on a commission basis, which may be a set amount or dictated by the parties involved in the real estate transaction.
Enrollment in the local board of Realtors is a requirement that Realtors must meet in order for an agent to become a member of the National Association of Realtors. Once local membership is established, enrollment with NAR is automatic. The National Association of Realtors advises that the code of ethics the Realtors operate by affect everyday real estate practices. The code of ethics includes the following principles:
• Client loyalty
• A legal or fiduciary duty to clients
• Cooperating with competitors (other real estate professionals)
• Truthfulness in advertising and statements
• Non-interference in exclusive relationships other Realtors have with their clients
Realtors must make sure the outcome of the transaction is driven by the needs of their client; not by the amount of the commission that they'll make from the transaction. Realtors are also responsible for communicating all information relevant to the sale or purchase to the parties involved, affording them the opportunity to make informed decisions.
Realtors are legally obligated to disclose all relevant and available facts regarding the property and the transaction to the buyer and the seller. When representing buyers, the Realtor should conduct a visual inspection and recommend hiring experts for a complete inspection of electrical, plumbing and structural integrity. When representing sellers, the Realtor should instruct them to disclose all information affecting value or desirability, such as termite infestation, leaks or structural problems.
Realtors are obligated to work with other agents to make sure all parties have an accurate picture of the transaction and the information and steps involved to complete the transaction. If there are credit issues or construction issues, then the Realtor works with the other agent to ensure this information is communicated.
Realtors must make clear and accurate representations of property information and experience. This allows the public to make informed decisions regarding using a Realtor. The Realtor has an obligation to all parties to recognize and honor the relationships established between all parties involved.
Realtors are required to obtain a real estate license in their state of operation and must also participate in mandatory ongoing training to ensure they're educated on changing laws that impact the real estate market. Each state has a different requirement for obtaining licensure. The Real Estate Center provides information regarding the specific requirements for each state. An example of the minimum requirements to obtaining a real estate license and becoming a Realtor include:
• A high school diploma or GED
• 18 years of age
• Proof of US citizenship or legal permanent residency
• Ability to pass a background check
• Minimum of 75 salesperson pre-licensure course hours at an accredited real estate school or an accredited law school
• Passing the state real estate examination
Prospective Realtors may have to meet additional requirements depending on the state in which they will be operating. The minimum hours required for licensure may vary from state to state. Some states require that applicants pay a fee when they receive approval on their application for licensure. Sponsorship by a broker may be an additional licensing requirement.
Realtors work on a commissioned basis. The commission varies and is usually dictated by the real estate agency or the area in which the transaction occurs. This amount is split between the listing and selling agents, as well as their agencies. The contract outlines the specific amount between the Realtors and their clients. It may be specified in the listing agreement, buyer's agent contract or sales agreement at the time that it is executed. Realtors may also adjust or waive a portion of their fee if it will help the client to complete the transaction.