What Is the Difference Between a Broker, Sales Agent, and Realtor?

If you’ve ever bought a home or signed an office lease (or talked to someone who has), you’ve likely heard the terms broker, realtor, and (maybe) sales agent.

But do you know the difference between these terms? If you’re in the market for a home, who do you go to? What about if you’re looking for commercial space?

At AQUILA, we know these terms can be confusing if you’re not familiar with the industry.

In order to ensure you know the difference in the terms, we’ve put together this article explaining exactly what each term means and the differences (and overlap) between the three.

In this article, we will answer these questions:

What is a Broker?
What is a Sales Agent?
What is a Realtor?

The Difference Between a Broker, a Sales Agent, and a Realtor

The terms broker, agent, and realtor are often used in casual conversations when discussing real estate transactions and listings.

In the commercial world, “broker” is commonly used to encompass any licensed representative involved, and in residential, the term “realtor” is used often to refer to the agents involved in selling or buying a home.

However, these terms have specific meanings with legal implications that are important to understand.

Licensed Real Estate Sales Agents and Brokers are regulated and licensed by the Texas Real Estate Commission (TREC).

According to the TREC website:

The Texas Real Estate Commission safeguard[s] consumers in matters of real property transactions and valuation services… Together TREC and Texas Appraiser Licensing Certification Board oversee real estate brokerage, real property appraisals, inspections, home warranties, right-of-way services, and timeshare. The agency provides licensing, education, and complaint investigation services, as well as regulation and enforcement of state laws and requirements that govern each of these areas of service to consumers in Texas.”

The title REALTOR® refers instead to a membership, rather than a state-regulated license.

Now that we understand what each of these titles can potentially mean, let’s break them down.

What Is a Broker?

According to the Texas Real Estate Commission, a Licensed Real Estate Broker is “a person who provides real estate services to another person in exchange for a commission. Brokers can also sponsor and supervise real estate sales agents.”

Brokers are allowed to work autonomously because of their extensive knowledge in real estate, and sponsor the licenses of sales agents. While holding a broker’s license, they will take continuing education courses that keep them up to date on real estate legal issues, commercial real estate investments, construction, and property management. As a result, brokers have extensive know-how on the subject.

Whether you’re considering a residential or commercial real estate transaction, any person who represents you in the lease or sale must either hold a brokerage license or be sponsored by a licensed broker.

In commercial real estate, you’ll often hear the term “broker” used colloquially to refer to any agent or broker involved in the transaction. This has become a generic term in the industry like Kleenex has for tissue or Google has for an online search.

What Is a Sales Agent or Real Estate Agent?

According to the Texas Real Estate Commission, “a Real Estate Sales Agent is a person who is licensed by the Real Estate Commission to act as an agent on behalf of a real estate broker and their clients. A sales agent must be sponsored by a licensed Broker in order to perform any act of real estate services.”

Again, sales agents are involved in both residential and commercial real estate transactions.

The difference here is that they must be employed (or sponsored) by a firm or individual that holds a brokerage license.

In commercial real estate, you may hear a sales agent referred to as an agent or a broker interchangeably in casual conversation. In residential real estate, a sales agent may be referred to as an agent or a “realtor” in common language.

Individuals must complete the following requirements to become a licensed sales agent:

Must be at least 18 years of age
In Texas, you must complete 180 hours of pre-licensing education (hours will vary by state)
Find a licensed real estate broker to be sponsored by
Apply for and complete the state salesperson exam and submit an application for a license

What is a Realtor?

A REALTOR® can be any licensed real estate agent or broker who is a member of the National Association of REALTORS® (NAR).

According to the NAR website, the value of joining the organization is:

The National Association of REALTORS® is committed to providing members with opportunities and resources to enhance professional skills and maximize earnings. Whether you’re a new agent seeking support in all things real estate, an experienced broker searching for the answer to a client’s question, or somewhere in between, as a member of the National Association of REALTORS®, you have access to a wide array of resources designed to help you succeed in today’s market.”

REALTORS® are typically residential real estate brokers or agents.

Now that you know the difference between these terms, if you’re in the market for commercial space (office, industrial or retail) it is important to find a licensed broker (or sales agent) who specializes in commercial transactions.

If you’re looking to lease or buy commercial space for your company, you’ll want to engage a tenant representation broker to help you in this process.

Learn More: What Is a Tenant Representation Broker & What Do They Do?

You’ll even find that there are individuals who specialize in your specific property type.

In the same vein, if you’re looking to buy or sell a home, you’ll want to engage a brokerage team that specializes in residential real estate.

Ready to hire a tenant rep broker for your office search? Read our Ultimate Guide to Hiring a Tenant Representation Broker.