There seems to be some confusion regarding real estate basic terms and concepts, so I thought we’d take a quick look at some of them, so we would not catch ourselves stumbling over the simple ideas on our way to some more complex ones.

The Agent

A person who represents another (especially in a transaction) is called an agent. In the US, state and federal law can and does determine if an agent needs to be licensed in order to represent another person in any given type of transaction.

Most types of transactions are governed at the state level, with the state deciding the requirements, overseeing the process, and issuing the license.

Anyone can sell their own property without a license, of course, but if that person decided to represent another person in the sale of that other person’s property, they would be required to have the correct license from the state in which the property was located.

A person holding himself (or herself) out to represent another in the sale of real property would be called a licensed agent, or simply an agent.

The Broker

A person who takes the next step in education and licensing from the state is able to maintain a real estate office. That person may or may not decide to have more agents in his organization, and is called a real estate broker, or simply a broker.

The broker and/or the agent may decide to join the National Association of Realtors, and if they do, they are called a REALTOR.

The REALTOR

A REALTOR then must be a licensed agent, but a licensed agent is not automatically a REALTOR.

REALTOR organizations exist at the national and local levels, requiring compliance of their members to a high standard of ethics, and offering membership to a Multiple Listing Service. So there are requirements to be satisfied before anyone can be part of a MLS system.

Hopefully this quick look at the terms, “agent, broker, REALTOR, and MLS” will help clear up any questions you may have in inevitable future real estate transactions for you.