One of the hardest parts of buying a home is understanding real estate terminology. It’s not just a matter of learning new words. You may also need to unlearn a few things you thought you knew. For example, did you know that “REALTOR®” is a trademark denoting membership in the National Association of REALTORS®, and cannot be used synonymously with “real estate agent?”
Here’s how it works:
Level 1. Real estate licensee
All real estate agents must be licensed. Each state sets its own requirements, in terms of the minimum number of hours spent in real estate education. Before receiving a real estate license, agents must also pass an exam that covers national, as well as state and local real estate laws, standards, and practices. After passing the exam, and affiliating with a real estate brokerage, a licensee can begin representing buyers and sellers in property transactions.
Level 2. REALTOR®
REALTORS® adhere to a higher set of standards. The term “REALTOR®” is a registered trademark that can only be used by active members of the National Association of REALTORS®. The term REALTOR® identifies a real estate professional who is a member of the National Association of REALTORS® (NAR)—the largest trade association in the U.S., with over a million members—and subscribes to its strict Code of Ethics. The term REALTOR® can only be used to convey membership in NAR.
This is important to homebuyers because REALTORS® abide by a strict Code of Ethics & Professional Standards—duties that go beyond state licensing laws and help ensure fair and honest treatment to all parties to real estate transactions.
Level 3. Accredited Buyer’s Representative (ABR®)
The National Association of REALTORS® also helps its members develop deeper real estate expertise by providing education, and conferring designations and certifications, in various areas of specialization, including buyer representation.
To earn the Accredited Buyer’s Representative (ABR®) designation, REALTORS® must take additional courses and demonstrate prior experience in representing buyer-clients in real estate transactions. The education emphasizes an agent’s fiduciary responsibilities to buyer-clients, including adhering to very specific duties, obligations, and high standards of good faith and loyalty throughout the transaction process.
Most buyers prefer working with an ABR® designee, once they understand these important differences between real estate professionals. It’s a choice that can significantly improve your home buying experience! (Use this directory to find an ABR® designee near you.)