In real estate, there are dozens of industry terms that can be confusing or overwhelming. Condex, LTV, ARM, Assessed vs. Appraise valued, FSBO, REO, Short Sale, BOM, etc. It’s endless.
There are even many different ways to refer to real estate agents: agent, broker, realtor. Are these terms all the same thing; can they be used interchangeably? Here is some clarification on what each title means and what exactly is a Massachusetts Realtor.
Real estate agent. A Massachusetts real estate agent is a real estate professional that is licensed by the Division of Professional Licensure (a division of the MA Office of Consumer Affairs and Business Regulation) to provide real estate consultation and representation to consumers looking to purchase, sell, lease or exchange real property. A real estate agent owes a fiduciary duty to his/her clients, that are often explained using the acronym “OLDCAR”:
Obedience – to obey the client’s instructions
Loyalty – to keep the client’s interest ahead of every other party, include the agent’s own interests
Disclosure – to disclose all material facts about a property
Confidentially – to not disclose anything about a client’s, business, financial or personal affairs or motivations
Accountability – for all funds and documents in a transaction
Reasonable Care – to work with the requisite knowledge base and skill set to achieve the client’s desired outcome(s)
In Massachusetts, real estate agents can be either a salesperson or a broker.
Salesperson. A salesperson is a real estate licensee that has completed at least forty (40) hours of state-approved pre-licensure salesperson education, has completed and passed the state salesperson examination, and is currently up-to-date on his/her licensing requirements. Salespersons must work under the direct supervision of a broker.
Broker. A broker is a real estate licensee that has worked for a broker for at least three (3) years, has taken and completed forty (40) hours of state-approved pre-licensure broker education, and is bonded and authorized to run a realty firm in his/her own name. Massachusetts also has a separate real estate licensee designation for Attorney Brokers, who are real estate brokers who are also MA-licensed attorneys.
Realtor. A Realtor is a real estate licensee who is a member of the National Association of Realtors®, which is the world’s largest professional trade association, with approximately one million members. A Massachusetts Realtor can be a salesperson, broker or licensed appraiser. A real estate agent that is a Massachusetts Realtor is actually a member of a three-tiered organization – the National Association of Realtors (NAR), the Massachusetts Association of Realtors (MAR), and one of 16 local Association of Realtors in Massachusetts (including the Commercial Alliance of MA).
The saying goes that “all Realtors are licensees, but not all real estate licensees are Realtors.” The numbers fluctuate a bit each year, but more or less, about half of the MA-licensed real estate agents are Massachusetts Realtors.
So how does a Massachusetts Realtors set himself/herself apart? The Realtor Association was founded in 1908 to increase the professionalism in an industry that had virtually no regulation, common standards or government regulation. Realtors are pledged to a strict self-imposed Code of Ethics and Standards of Practice that attempt to enhance honesty in dealing with the public and cooperation between professionals. As an institution, the Realtor association provides professional development, advocacy, research and exchange of information among members and to the public, and promotes and protects homeownership and personal property rights.
A requirement of Realtor membership is for each new member to become trained and tested on the Code of Ethics, and Massachusetts Realtors must take quadrennial Code of Ethics training and pass successful examinations to retain their Realtor membership.