What Is Realtor?
A Realtor is a real estate agent who belongs to the National Association of Realtors and follows its Code of Ethics. The Code covers honesty, disclosure, and fiduciary duty to clients. Not every licensed agent is a Realtor — you have to join NAR and pay dues. Realtors typically work residential (1–4 units). For commercial real estate (5+ units, office, retail), you'd use a commercial broker. When you're buying a house or small multifamily, a Realtor helps with contingencies, earnest money, and the appraisal process.
A Realtor is a real estate agent who's a member of the National Association of Realtors (NAR). They adhere to the NAR Code of Ethics. Not all agents are Realtors — it's a membership designation, not a license.
At a Glance
- What it is: A real estate agent who's an NAR member and follows the Code of Ethics
- Why it matters: The Code enforces honesty, disclosure, and fiduciary duty — not all agents are held to that standard
- How to use it: Hire as buyer's or seller's rep for residential (1–4 units); they handle contingencies, earnest money, appraisal
- Common threshold: ~1.5M NAR members; most residential agents in the U.S. are Realtors
How It Works
"Realtor" is a trademarked term. Only NAR members can use it. To join, you need a real estate license and to pay NAR dues. The Code of Ethics is the differentiator — 17 articles covering duties to clients, the public, and other Realtors. Honesty. Disclosure of material facts. Putting the client's interest first. No false advertising. No steering. Violations can result in discipline, including expulsion.
Realtor vs agent. Every Realtor is a licensed agent. Not every agent is a Realtor. An agent without NAR membership can't call themselves a Realtor. They might follow similar practices, but they're not bound by the Code. When you hire a Realtor, you're getting someone who's agreed to that standard. It's not a guarantee of quality — bad Realtors exist — but it's a floor.
Residential focus. Realtors typically work residential — single-family, condos, 2–4 unit multifamily. That's where most NAR members operate. For 5+ units, office, retail, or industrial, you'd use a commercial broker. Different asset class, different expertise. A Realtor can list a duplex. A commercial broker handles a 20-unit building.
The purchase process. When you're buying with a Realtor, they help with the offer, contingencies (inspection, financing, appraisal), earnest money deposit, and closing. They coordinate with the lender, title company, and seller's agent. For investors, a Realtor who understands investment properties — cap rate, cash flow, rental strategy — can add value. Many don't. Find one who does.
Real-World Example
Memphis duplex purchase, 2024.
You're buying a $185,000 duplex. You hire a Realtor as your buyer's agent. She finds the listing, sets up the showing, writes the offer. You include contingencies: inspection, financing, appraisal. You put down $3,000 earnest money. The appraisal comes in at $182,000 — $3,000 low. Your Realtor negotiates: seller drops to $182,000 or you walk. Seller agrees. You close. Her commission: 3% of $182,000 = $5,460. The seller pays it. You got representation, contingencies protected you, and the appraisal contingency let you renegotiate. That's the Realtor's role in the deal.
Pros & Cons
- Code of Ethics — honesty, disclosure, fiduciary duty; a standard not all agents follow
- Access to MLS — listings, comps, market data
- Handles paperwork — offer, contingencies, earnest money, closing coordination
- You typically don't pay as a buyer — seller pays commission in most residential deals
- Familiar with appraisal process — can help if it comes in low
- Quality varies — Code of Ethics doesn't guarantee competence
- Commission is in the price — 5–6% on residential; you're paying it indirectly
- Conflict of interest — they get paid when the deal closes; incentive to close, not necessarily at the best price
- Many don't understand investment — cap rate, cash flow; find one who does if you're an investor
Watch Out
- Assuming all Realtors are equal: The Code sets a floor. It doesn't guarantee skill. Some Realtors are great with investors; others only do primary residences. Interview. Ask about their investment experience. Check references.
- Skipping contingencies to win a bid: In a hot market, waiving appraisal or inspection can win the deal. It also increases risk. A Realtor might push you to waive to close. Your call. Know the risk.
- Dual agency: When the same agent represents buyer and seller, it's dual agency. Their loyalty is split. Some states allow it; some require disclosure. Be cautious. Prefer separate representation.
- Using a Realtor for commercial: For 5+ units or commercial real estate, use a commercial broker. Realtors are residential. Wrong tool for the job.
Ask an Investor
The Takeaway
A Realtor is an NAR member who follows the Code of Ethics. They work residential — 1–4 units. They help with contingencies, earnest money, and the appraisal process. Not all agents are Realtors. For investment properties, find one who understands cap rate and cash flow. For commercial (5+ units, office, retail), use a commercial broker instead.