Despite popular belief all Real Estate Agents are not REALTORS®, however all REALTORS® are Real Estate Agents or Brokers. A real estate agent is a person who has passed the state real estate licenses test. The term REALTOR® is actually one that denotes membership in a trade association. Other notable trade association are the American Bar Association, American Medical Association, or even the Screen Actors Guild. The purpose of trade associations are to enjoy some benefits that are missed out normally by being smaller companies or contractors, so they pool together for benefits like health insurance, retirement and other products seen in large companies.
Many of these trade associations also uphold professional standards and ethics as well. The National Association of REALTORS® is no different. The National Association of REALTORS® has the Code of Ethics that all members must follow. Failure to do so can result in removal from the association and likely ending that person's career.
In areas where there is an Multiple Listing Service, or MLS, often times this is run by the local Board of REALTORS® and to have access one must be a member. This is very common in residential real estate, and if in one of these areas and not a REALTOR® you are not going to be getting much business working in residential real estate.
Why do I point out the distinctions in residential real estate? Because commercial real estate functions differently, as well, the National Association of REALTORS® does not focus on commercial real estate like they do residential. Depending on where you are, your commercial agents may or may not be part of the Board of REALTORS® and that is okay. Many commercial association like CCIM Institute and The Institute of Real Estate Managers are closely held to the same principles as the National Association of REALTORS® even to the point of having the same or very similar code of ethics.
The National Association of REALTORS® has done an amazing job at branding any real estate professional as a REALTOR®. It is not uncommon for there to be confusion. Often many REALTORS® do not realize that they have the option to join or not to join the Association of REALTORS®.
Knowing the difference now means you can understand who you are working with, and what guidelines they must follow. As well if you choose to work with a REALTOR® you have enforceable repercussions if they act in opposition to the Code of Ethics.