What Is a Real Estate Agent?
If you’re looking to buy or sell a home, then a good real estate agent can be invaluable. But what exactly do real estate agents do, are they different from real estate brokers and relators, and what’s this buyer and seller dual agent that I’ve been hearing about? Let’s dive in to find out.
Real Estate Agent
A real estate agent is someone who assists buyers with buying, sellers with selling, and renters with renting properties. This includes a number of activities like:
- Providing information on current market conditions, home prices, and mortgage opportunities.
- Listening to the buyer to help generate a list of potential properties of interest by features like square footage, location, surrounding schools, and so on.
- Listing a home for the seller.
- Runing an open house.
- Showing properties to buyers or renters.
- Helping with the negotiations between the buyer and seller.
- Reviewing purchase contracts.
- Verifying that buyers are prequalified for a mortgage loan.
Requirements to become a real estate agent vary by state but it generally involves a certain number of hours of course work, an examination, and state licensing.
A real estate agent is also required to work under a real estate broker, which we’ll discuss next.
Real Estate Broker
Similar to a real estate agent, the requirements to become a real estate broker vary state to state. In most cases, a broker must have previously been a real estate agent for 1-3 years followed by further training and licensing. Further training can include a range of items like contracts, property management, building and construction codes, and so on.
A real estate broker can choose to work on their own or as part of a brokerage with multiple agents. When working on their own, a real estate broker will typically work with buyers and sellers in the same manner that a real estate agent would.
On the other hand, a real estate broker that works as part of a brokerage with multiple agents may not work directly with the buyers and sellers but instead act as a supervisor over a group of real estate agents that operate out of the brokerage. As a buyer or seller, you would not usually interact directly with this type of broker.
Both real estate agents and real estate brokers may become a relator. A relator is someone who is a member of the National Association of Realtors®. This association provides a number of resources to its members as well as providing ethical oversight.
Buyer’s Agent vs Seller’s Agent
The difference between a buyer agent and a seller agent is that the buyer agent represents the buyer and the seller agent represents the seller. In both cases, “agent” refers to a real estate agent or real estate broker.
The seller’s agent will help the seller to list the property, host an open house, determine how much to list the home for, and so on. The best interests of the seller are this agent’s top priority.
The buyer’s agent will advise the buyer on current market conditions, help the buyer to make a home offer, assist with home inspections, assist with the closing process, and so on. The best interests of the buyer are this agent’s top priority.
Sometimes, a seller’s agent can act on behalf of the buyer as well rather than the buyer having an agent of their own. This is known as a “dual” agent. A dual agent is required to be neutral between the buyer and seller but this can often be difficult for the agent to do. Not all states allow this either and those that do require that both the buyers and sellers consent to this type of arrangement. Note that you do not have to consent to a dual agent arrangement and can choose your own agent to represent you if desired.
How Do Agents Get Paid?
When a home is sold, around 6% of the sales prices will be paid by the seller as commission to the seller’s agent. When there are both a buyer and seller agent, then this amount will be split by the seller agent with the buyer agent. To be clear, the buyer does not directly pay any of either the buyer or seller agent’s commission. Indirectly though the buyer may still be impacted as the seller may choose to slightly raise the asking price of the home to cover some of the commission cost.
Tip: if using a dual agent, then the full commission will go to the dual agent only. In this scenario, you may be able to negotiate a slightly smaller commission rather than the full 6%.
Do I Need an Agent?
Is a real estate agent/broker absolutely necessary to buying or selling a home? No. But having an agent can make the home buying/selling process go much smoother; especially if you are new to the process.
If you are more familiar with the home buying/selling process, then you can perform the tasks an agent would typically perform yourself. Just be sure to fully understand what these tasks are before deciding if you want to take them on.