The short version: every Realtor is a licensed agent or broker, but not every agent or broker is a Realtor. A real estate agent is licensed to sell property under a broker. A broker holds a higher license and can run their own firm. A Realtor is any agent or broker who belongs to the National Association of Realtors and follows its code of ethics.
Three words, one industry, and a lot of confusion. Here is the plain version, plus how the commission actually gets split once you know who’s who.
What is the difference between an agent, a broker, and a Realtor?
The three terms describe two different things: your license level, and whether you belong to a trade association.
Agent and broker are license levels. A real estate agent (sometimes called a salesperson) passed the state exam and works under a supervising broker. A broker took extra coursework, passed a separate exam, and can work independently, hire agents, and run a brokerage. Every agent legally has to hang their license with a broker.
Realtor is a membership, not a rank. A Realtor is an agent or broker who joined the National Association of Realtors (NAR) and agreed to follow its Code of Ethics. The word REALTOR is a federally registered trademark owned by NAR, so it is not a synonym for “agent”. All Realtors are agents. Not all agents are Realtors.
| Real estate agent | Broker | Realtor | |
|---|---|---|---|
| What it is | A license to sell property | A higher license to run a firm | A membership designation |
| Extra requirement | State exam | More coursework + broker exam | Join NAR, follow the Code of Ethics |
| Can work independently? | No, works under a broker | Yes | Depends on their license |
| Bound by NAR ethics code? | Only if a member | Only if a member | Yes, always |
| Trademarked term? | No | No | Yes (owned by NAR) |
, current as of 2026.
At Jim Shaffer & Associates, we’re a licensed brokerage, and our agents are Realtors. So you get all three: licensed agents, a broker standing behind them, and NAR’s ethics code on top.
What is the difference between a listing agent and a selling agent?
This one trips up almost everybody, because the names sound backward.
- The listing agent represents the seller. They price the home, market it, put it on the MLS, and negotiate on the seller’s behalf.
- The selling agent represents the buyer. Confusing, we know. “Selling” here means the agent who brings the buyer that closes the sale. Most people now just call them the buyer’s agent.
| Role | Also called | Represents | Main job |
|---|---|---|---|
| Listing agent | Seller’s agent | The seller | Price, market, list on MLS, negotiate for the seller |
| Selling agent | Buyer’s agent | The buyer | Find homes, write and negotiate the offer, manage the closing |
So a house has (usually) two agents: one for each side. That’s the setup that decides how the commission gets divided.
How much is real estate commission?
Total real estate commission in the U.S. runs roughly 5% to 6% of the sale price, and the national average in recent data is about 5.70%, split close to evenly between the two sides (roughly 2.88% to the listing side and 2.82% to the buyer’s side).
A few things worth knowing:
- There is no legal or standard rate. Commission has always been negotiable. Anyone who tells you “it’s just 6%, that’s the rule” is wrong.
- Each side’s commission is now negotiated separately. Since the NAR settlement took effect on August 17, 2024, the seller negotiates the listing fee with their agent, and the buyer negotiates their agent’s fee in a separate written agreement.
- The agent doesn’t keep the whole check. Each agent splits their share with their brokerage, often 20% to 30% off the top, before anyone gets paid.
On a $350,000 Royal Oak sale, a 5.7% total commission is about $19,950 across both sides. Who covers each half is the part that changed.
Who pays the commission?
Historically the seller paid the whole thing, and it got divided between the two agents. After August 2024, the picture is split in two:
- The seller pays their listing agent. You agree on that rate when you sign the listing agreement. That part hasn’t changed much.
- The buyer’s agent fee is negotiated on its own. The buyer agrees to it in writing before touring, and it can be paid by the buyer, covered by the seller as a concession, or split.
The big structural change: a listing agent can no longer advertise the buyer’s agent fee on the MLS. It’s a separate conversation now. We break down exactly how the buyer side works, and who ends up paying it in Metro Detroit, in our full guide to buyer’s agent fees.
How commission works with Jim Shaffer & Associates
We’ve sold thousands of houses across Royal Oak, Ferndale, Birmingham, and everywhere in between (about 850 a year since 1999), so we’ve run both sides of this table more times than we can count. Here’s how we keep it clear:
- When you sell, we agree on the listing commission up front, in plain numbers, before anything hits the market. No mystery percentages. See our selling page for how we price and market.
- We tell you what we’d offer a buyer’s agent and why, so you understand how it affects the number of buyers who show up.
- When you buy, we put our fee in writing before you tour and find out what each seller is offering, so you know your real cost on every house.
Selling or buying a home is the biggest text thread of your life. The commission shouldn’t be the confusing part. Talk to an agent and we’ll walk you through your numbers, no pressure and no obligation.
Frequently asked questions
Is a Realtor better than a real estate agent?
Not automatically. Realtor is a membership in the National Association of Realtors, not a higher license. It means the person agreed to follow NAR’s Code of Ethics. Plenty of excellent agents are Realtors, but the title itself describes membership, not skill or experience.
What’s the difference between a broker and an agent?
A real estate agent is licensed to sell property but must work under a supervising broker. A broker completed extra coursework and a separate exam, and can operate independently, hire agents, and run their own firm. Think of the broker as the person legally responsible for the agents underneath them.
What is the difference between a listing agent and a selling agent?
The listing agent represents the seller: pricing, marketing, and listing the home. The selling agent (usually just called the buyer’s agent) represents the buyer who purchases it. The name is confusing, but “selling agent” refers to the side that brings the buyer, not the seller.
How much is real estate commission?
Total commission typically runs 5% to 6% of the sale price, averaging about 5.70% nationally, split between the listing and buyer sides. There is no legal or standard rate. It has always been negotiable, and since August 2024 each side’s fee is negotiated separately.
Who pays the real estate commission?
The seller pays their own listing agent. The buyer’s agent fee is negotiated separately, and can be paid by the buyer, covered by the seller as a concession, or split. Since August 2024 it’s no longer advertised on the MLS. We cover the buyer side in detail in our buyer’s agent fee guide.