Key takeaways
- Most residential homebuyers and sellers work with a real estate agent who represents them in the transaction.
- Some agents specialize in representing either buyers or sellers, and dual agents may represent both parties in the same transaction.
-
Real estate agents are typically compensated on a commission basis, earning a percentage of the property’s sale price.
If you’re buying or selling a home, you’ll likely wind up working with a real estate agent. Agents are licensed professionals who get compensated for representing buyers and sellers in property transactions.
For sellers, agents help with listing a home for sale, including setting a price, scheduling open houses and reviewing offers. For buyers, they help find properties that meet the needed criteria, including vetting listings, arranging home tours and preparing offers.
On both sides of the equation, real estate agents can help with negotiations and closing paperwork, serving as the client’s point person until the deal is complete.
What is a real estate agent?
Real estate agents are licensed professionals who get compensated for representing buyers and sellers in property transactions. In 2024, the Association of Real Estate License Law Officials database contained more than 4.3 million licensee records — that is, people holding active real estate licenses.
- Real estate agent definition
- Real estate agents are licensed professionals who represent buyers and sellers in property transactions.
Real estate agents must have a license to work in a particular jurisdiction. The requirements can vary from state to state, but usually mandate that candidates be at least 18 years old, complete a number of hours of educational coursework from an accredited real estate licensing school and pass the licensing exam for the state they intend to do business in.
Agent designations
Some real estate agents choose to get additional certifications or accreditations to further their expertise. For example, some of the official designations offered by the National Association of Realtors include Accredited Buyer’s Representative, Seller Representative Specialist, Military Relocation Professional, Resort & Second-Home Property Specialist and more.
Types of agents
While all licensed agents have the skills to help any real estate client, some more often represent sellers and some more often represent sellers.
Listing/seller’s agents
Seller’s agents, often called “listing agents” because they manage the listing of the home, work for the homeowner who is selling. These agents are responsible for:
- Listing a property for sale
- Helping price the home
- Marketing the home and preparing it for viewings
- Scheduling open houses and showings
- Representing the sellers in negotiations
- Preparing the purchase agreement
- Assisting with closing
Buyer’s agents
A buyer’s agent represents the interests of those who are hoping to buy a property. Their responsibilities include:
- Helping buyers find and visit properties they’re interested in
- Recommending a fair offer price
- Negotiating contract terms with the seller’s agent
- Arranging home inspections and final walk-throughs
- Assisting with closing
Dual agents
A dual agent simultaneously represents both the seller and the buyer in a real estate transaction. Some states actually prohibit dual agency, due to the potential conflict of interest: Hypothetically, it’s in an agent’s best interest that the home sells for as high a price as possible, as their commission will be a percentage of the sale price. However, in states where the practice is legal, dual agency can be more efficient because there are fewer parties involved in the transaction. A dual agent may charge slightly lower sales commissions as well, since they are making money off of both sides of the transaction.
Agent vs. broker
Like agents, real estate brokers are licensed professionals who can represent homebuyers or sellers in a transaction. But they have additional training and licensing above and beyond that of an agent, enabling them to own and operate a brokerage and manage other agents. Brokers must pass an additional, more rigorous licensing exam.
Agent vs. Realtor
Only real estate agents who are also members of the National Association of Realtors may call themselves Realtors. The industry trade organization has more than 1.5 million members and owns the registered trademark of the term (hence the capital R). An agent who is not a Realtor is no less qualified to represent their clients, though — they are still licensed real estate professionals, they simply have chosen not to join NAR.
How are real estate agents compensated?
Real estate agents are compensated on a commission basis. That means that they only get paid when they close a successful deal, and they receive their compensation at the closing. The commission percentage, and which party pays which agent, will be negotiated upfront.
Typically, each agent earns a commission of about 2.5 percent to 3 percent of the home’s sale price. On a $300,000 home sale, then, each agent involved stands to make up to $9,000. But some agents will agree to work for a flat fee, regardless of how much the home ultimately sells for.
Finding the right real estate agent
When buying or selling your home, the better you click with your agent, the better your experience is likely to be. Start by asking friends and family for referrals — if someone you trust had a good experience with an agent, chances are you will too. Interview several candidates and ask plenty of questions to make sure you’re hiring someone you can work well with. Ideally, you want someone who has experience in the kind of transaction you’re interested in and has deep knowledge and expertise in your local area.
Before you settle on someone, it’s also a good idea to do some background research. Look for online reviews to see if there are any red flags. You could also consider checking your state’s real estate licensing website to make sure their license is valid and up to date, and there are no records of disciplinary action.
FAQs
Read the full article here
