Does real estate jargon leave you scratching your head? The following glossary can help shed light on some of the different ways a REALTOR® may work with you in a property transaction:
Broker — A licensed agent who has the experience and training necessary to receive a broker's license, which allows that person to manage his or her own real estate business and/or sponsor other agents. "Sponsoring" an agent means the broker holds the agent's real estate license and is legally responsible for the business conduct of that agent. The broker supervises the agent's activities and provides additional services and facilities in return for a portion of the agent's commission.
Agent — An agent with a salesperson license who must work under direct sponsorship and supervision of a licensed broker in order to practice real estate. Agents may work with home buyers as a "buyer's agent" or with home sellers as a "seller's agent."
Associated Broker — An agent holding a broker's license who decides to work under the supervision and guidance of another broker.
*Note: Both real estate brokers and sales agents must be licensed by the Texas Real Estate Commission (TREC) in order to conduct property sales within the State of Texas.
Listing agent — Sometimes referred to as a "seller's agent," this term describes a real estate agent who works for and represents a home seller.
Buyers agent — Describes a real estate agent who works for and represents a home buyer.
REALTOR® — Some brokers and sales agents choose to become REALTORS®, which means they must adhere to the National Associations of REALTORS®' (NAR) Code of Ethics and be a member in good standing of the local, state and national association. For this reason, all REALTORS® are real estate agents, but not all real estate agents are REALTORS®.
Customer — Is a principle in a transaction who is not represented by an agent. The customer is entitled to receive information but no advice. The Texas Real Estate Commission and NAR's Code of Ethics require agents to treat customers honesty and fairly.
Client — Is a principle in a transaction who is represented by an agent, and will receive advice in addition to honesty and fair treatment. The agent is bound to work for their principle to obtain the best results for their principle.
REALTOR® Teams — In a REALTOR® team, multiple licensed sales agents from the same brokerage work together to ensure that all parts of the transaction run smoothly by using activity specialists. For example, one REALTOR® may be in charge of showing homes to the client, while another may handle paperwork and scheduling. Be sure to ask your REALTOR® how she and/or her team conducts business so that you'll know what to expect.
Single agency — Single agency takes place when broker/agent represents either the home buyer or the home seller, but never both during a single transaction.
Dual Representation — Dual representation takes place when one broker represents both the buyer and the seller during a single transaction. The practice was formerly known as Dual Agency. Dual Agency is now illegal in Texas, but it has been replaced by the practice called Intermediary. Special rules are in place that require the agent to provide information about the Intermediary process, and to obtain the informed written consent of both principles. One of the major benefits of the Intermediary practice is that it allows for advice to be given to the principles through an appointment process. Under the old Dual Agency advice to the principles was not permitted. Be sure to ask your REALTOR® how she and/or her team conducts business so that you'll know what to expect.
"Limited Service" agent — Some brokerages offer real estate services on a "limited service," "flat fee," or an "a la carte" basis. In the past, those services were limited to listing homes on the Multiple Listing Service (MLS) or providing paperwork to clients without any support negotiating or evaluating offers. However, law passed in 2005 requires Texas real estate agents to present and accept offers and counteroffers on the client's behalf, assist the client in developing offers, and answer the client's questions as part of their minimum level of service.
These definitions are just a starting point in understanding the various ways REALTORS® work for you. Remember to contact your Central Texas REALTOR® to inquire about their specific business practices.