So, you’re thinking about selling your home and buying a new, larger, better-located home. Excellent! Now, should you call a Realtor, a real estate agent, or a real estate broker? Is there really a difference?
While all three of these titles are used interchangeably in the business of real estate, the three roles are distinct and different. Let’s dig deeper to appreciate the differences between these three professionals and see why it matters.
What is a real estate agent?
A real estate agent is a professional who uses his or her expertise to help their clients buy or sell a home for the best price possible. In order to become a real estate agent in Canada, you must complete certain courses and meet certain regulatory requirements through your provincial real estate association or council. You must also pass the real estate exam, which tests your basic real estate and property laws knowledge.
A real estate agent has to work for a real estate broker by law, so when you hire a real estate agent, you are technically also hiring his or her broker. Agents charge their commision fees based on a percentage of the sale price of the property and Canada’s Competition Act promotes free and open competition. Therefore, agents are free to choose their commision rates and the fees will vary based on each province in Canada.
Typically, most sellers will pay 5% in commissions on the sale of their home — 2.5% to their listing agent and 2.5% to the buyer's agent. In B.C. the commission split is the same — 50% to the listing agent and 50% to the buyer's agent — however, the commission rate is different. For most markets in B.C., the seller pays 3% on the first $100,000 of the home's sale price and an additional 1% on the remaining amount of the final sale price.
What is a real estate broker?
To become a real estate broker, you must first be a real estate agent. Real estate brokers choose to further their education by passing a broker licensing exam and completing additional real estate courses. These courses are meant to qualify a broker to run their own brokerage firm where they will be able to hire and lead a team of real estate agents. Real estate brokers extensive knowledge of real estate laws and regulations and also have more power and responsibilities than real estate agents.
What is a Realtor?
Many people confuse the registered trademark, Realtor, as having the same title as those who are real estate agents. A Realtor is a member of the Canadian Real Estate Association (CREA), and these agents must adhere to the REALTOR Code of Ethics and standards of professionalism. To qualify as a Realtor, a real estate agent must complete CREA’s ethics training when they first join and then continue to complete regularly scheduled training to increase their industry knowledge.
Every Realtor is a real estate agent, but not every real estate agent is a Realtor. To confirm that the real estate agent you are interviewing is a Realtor, you can visit Realtor.ca to find a certified agent in your city.
Does it matter whether the agent is a Realtor or not?
Realtors are not only licensed but are required to maintain a high standard of conduct. To use this trademarked title, this real estate professional must regularly update both their industry knowledge and the ethics that are stipulated in their provincial association’s Code of Conduct. As a result, a person who uses the Realtor designation is considered to have more consistent training than real estate agents.
Keep in mind, however, that every Realtor has different capabilities and focuses when it comes to the real estate industry. A Realtor can focus solely on strata and condo residential or industrial commercial space. To ensure you’re working with the right person, remember to interview a few Realtors and focus on their knowledge, experience and whether or not they can and will work with your needs and requirements.