A blog cannot deal with all aspects of a subject and is not intended to replace professional advice. It's purpose is to highlight information and identify areas of possible interest. Anyone wishing to discuss this blog or to make any comments or suggestions about this blog is invited to do so by either posting comments or emailing me directly.

 

Lions and Tigers and Bears - Oh My! ...What's in a name?

Hang on. What's the difference between all the names like agent, REALTOR®, broker, associate, and others that are used so often in real estate? I expect most people assume they're all the same.
 
Quite simply, an agent is any person or entity who is legally licensed to represent another party. The insurance, recruiting, mortgage, and real estate industries all use this agent concept. In real estate, it is a real estate Brokerage (the real estate agency) that is the legal agent that represents you – however, the licensed individuals working for the real estate brokerage are often referred to as "real estate agents" (i.e. agents of the brokerage). Generically, they would be referred to as brokers since they broker transactions between buyers and sellers.
 
To become a licensed real estate agent in Alberta, one must:
  • Have a Canadian high school diploma or equivalent;
  • Have proficiency in English;
  • Be at least 18 years old;
  • Satisfactorily pass a criminal record check;
  • Satisfactorily pass the entry-level Real Estate Agents Program
    • course includes sections on: real estate law, agency law, a section of family law, landlord-tenancy act, condominium act, municipal act, city zoning and bylaws, basics of mortgage financing, mortgage fraud, FINTRAC obligations, personal infomation privacy act, federal advertising and competition act, a basics of appraisal techniques, an overview of environmental issues, the proper use of the dozens of forms used, and contract and tort law;
  • Satisfactorily pass a course on Designated Agency and Transaction Brokerage;
  • Be registered with an Alberta real estate brokerage (usually it's through an independent contractor agreement);
  • Pay the licensing fee and receive a licence from the Real Estate Council of Alberta to trade in real estate only in the name of the registered brokerage.
Then the term REALTOR® – this too has almost become a generic term for a real estate broker. However, REALTOR® is a registered service mark that comes with a number of restrictions attached since only licensed members of the Canadian Real Estate Association (CREA) – or the American counterpart, the National Association of REALTORS® (NAR) – can use that term. Membership, extensive training, commitment to continuing education and abiding by a national Code of Ethics are all required to a achieve that professional title. CREA's primary role is to represent its membership at the federal level of government, to act as a watchdog on national legislation that pertains to the real estate industry and property rights, and to provide services to its membership. Non-members cannot refer to themselves as REALTORS®.
 
It's the Real Estate Act of Alberta that governs all real estate brokers in the Province of Alberta. Real estate brokers must adhere to regulated standards of business practice that are designed to protect consumers. The Real Estate Council of Alberta (RECA) is the non-government agency that administers the Real Estate Act in Alberta. Alberta is the only province to have a self-regulated real estate industry, whereas other provinces are regulated by provincial government agencies. RECA issues four types of licenses for the real estate industry. The first one is for the Brokerage – the real estate firm that represents buyers and sellers. The second is the entry-level license - called an Associate. Associates go through extensive training, as above, to earn their license and must take a continuing education class every other year in order to maintain their license. The third license level is that of an Associate Broker. The fourth is the Broker (or designated Broker or Broker of Record in other jurisdictions). Every Brokerage in Alberta must have one – and only one - designated Broker. Some Brokers own their own Brokerage and others are selected by the Brokerage owner and work under exclusive contract for that Brokerage. The education, training and experience requirements of an Associate Broker and Broker are identical; and are significantly higher than that of an Associate. Often, Associate Brokers take on additional duties within their brokerage, such as training and coaching, and managing an office or a team of agents. Sometimes there are paid additional duties or result in a reduction in their brokerage fees. Someone with a title of "Broker" or "Associate Broker" (note the capital "B" in the title) has extensive additional training in marketing, appraisal, commercial sales and business brokerage.
 
It should be noted that licensed real estate brokers are not licensed appraisers even though Associate Brokers and Brokers have taken significant additional training in appraisals. They cannot give appraisals, but only "opinions of value" using appraisal techniques supplemented with forward looking estimations, which are, in some cases, more useful than appraisals. Appraiser and Appraiser Candidates are separate license categories as are Mortgage Brokers and Mortgage Associates. All are licensed under the Real Estate Act of Alberta through RECA.
 
So the generic terms in real estate are real estate agent or real estate broker (not REALTOR®).
 
Real estate agents can also be a member of the local real estate board and therefore be a member of CREA and have access to the local MLS® System (therefore they are REALTORS®). Non-members do not have MLS® System access. Many commercial real estate agents are not members of CREA and therefore are not REALTORS®. However, in Alberta, there are maybe a thousand Commercial REALTORS® - meaning that they are members of the local real estate board AND have licensing to work in commercial.
 
Then there are real estate sale persons, too. These folks are members of the real estate industry but, in Alberta, are NOT licensed or as heavily regulated. They work as employees of builders and developers. The do not broker property – they sell it. They can never represent a buyer as a client and can only represent their employer in any real estate sale.
Comments:
No comments

Post Your Comment:

Blogs
Posts By Date
Categories
Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS®System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.