Demystifying Realtors and Real Estate Brokers: What You Need To Know

By Jeff Russell

Jeff Russell, CEO of Russell Realty Group (RRG), has consistently distinguished himself as a top producer and a preferred real estate consultant by his clients. Since 1999, he has proven to be one of the most successful Realtors in the industry with multi-million dollars in sales volume, top 1% in the country, and sold over 2,500 homes, including luxury, relocation, REO foreclosure, short sale, traditional residential, multi-family, investment, Short Term Rentals, new, etc.

When it comes to real estate in the United States, the numbers are staggering. With over 3 million individuals holding real estate licenses, it’s essential to understand the distinction between a real estate salesperson and a real estate broker. Today, we’ll delve into the differences between these two roles and shed some light on what it means to be a “Realtor” in the world of real estate.

In the realm of real estate, there are two primary types of professionals - real estate agents (formerly known as real estate salespeople) and real estate brokers. It’s important to note that for a real estate salesperson to conduct real estate transactions, they must hold the “Realtor” designation and operate under the supervision of a real estate broker. In the U.S., there are approximately 3 million licensed real estate salespeople.

However, only 1.6 million of them possess the coveted “Realtor” designation. So, what’s the secret to becoming a designated Realtor? To earn this title, one must join their local Real Estate Board of Realtors and pay dues to both their State Association of Realtors and the National Association of Realtors (NAR). It’s a unique distinction, and this process ensures a higher standard of professionalism in the field.

It’s often said in the real estate industry that if you don’t have a friend with a real estate license, you might not have any friends at all because seemingly everyone has one. Yet, here’s a surprising fact: less than half of licensed real estate salespeople are designated Realtors. That’s less than 50%. It’s a revelation that highlights the exclusivity of the title.

Even more intriguing, only approximately 160,000, which accounts for a mere 10%, of the 1.6 million licensed Realtors in the U.S., are real estate brokers. These brokers, too, must carry the Realtor designation and are held to a much higher standard due to their advanced training and education compared to the typical real estate salesperson.

The term “real estate broker” often conjures an image of someone who runs their own brokerage, complete with a team of real estate salespeople and Realtors under their supervision. However, this isn’t always the case. In reality, there are two distinct broker designations: Broker of Record and associate Broker.

The Broker of Record is the individual responsible for all the real estate salespeople within an organization. They indeed run their own real estate office or brokerage, guiding their team to success. On the other hand, an associate Broker, like many, works under the supervision of another brokerage.

Out of the 160,000 real estate brokers in the U.S., 106 are designated as Brokers of Record, while the remaining 54,000 are associate Brokers. This distinction is essential to understand when choosing a real estate professional to work with.

It’s essential to grasp the nuances within the world of real estate professionals in the United States. With over 3 million licensed real estate salespeople and a mere 5% holding the distinction of being a real estate broker, you have choices to make when selecting the right expert to guide you in your real estate journey.

Understanding the difference between a real estate salesperson and a real estate broker can make a significant impact on your real estate experience. So, armed with this knowledge, you can confidently choose your next Realtor, knowing precisely what each designation entails.

If you have any questions, don’t hesitate to reach out by phone or email.