What is a real estate agent?
A real estate agent is a licensed professional who organizes real estate transactions, connects buyers and sellers and acts as their representative in negotiations. Real estate agents are usually paid entirely by a commission (a percentage of the purchase price of the property), so their income depends on their ability to close a deal. In almost all states, a real estate agent must work for or be affiliated with a real estate broker (an individual or brokerage firm), who is more experienced and licensed to a higher degree.Inasmuch asInasmuch as
6 steps to becoming a real estate agent
Key points to remember
- A real estate agent is a licensed professional who represents buyers or sellers in real estate transactions.
- A real estate agent usually works on commission, being paid a percentage of the property’s selling price.
- In most states, a real estate agent must work through a real estate broker, firm, or professional colleague with more experience and a specialized license.
How a real estate agent works
Real estate agents generally specialize in commercial or residential real estate. In both cases, they perform different functions, depending on whether they work for the buyer or the seller. Agents who work for the seller, also known as listing agents, advise clients on how to price the property and prepare it for a sale, including providing advice on last minute improvements. that can raise the price or encourage quick deals. Selling agents market the property through listing, networking and advertising services.
Agents who work for the buyer look for available properties that match the buyer’s price range and wish list. These agents often review previous sales data for comparable properties to help potential buyers come up with a fair deal.
Agents act as intermediaries for the main parties, pushing offers and counter-offers and other matters back and forth. Once an offer is accepted, agents on both sides often continue to work, helping clients with paperwork, passing communications, providing advice on inspections and moves, and generally guiding the case through. ‘at the fence.
It is important for consumers to know whether a real estate agent represents the buyer, the seller, or both parties; Obviously, agent loyalty can greatly affect several details of the transaction, including the final price. State laws regulate whether an agent can represent both parties in a real estate transaction, technically known as a “dual agency.” Agents should disclose their representation, so buyers and sellers are aware of any conflict of interest.Inasmuch asInasmuch as
Dual agency, in which one person represents both buyer and seller in a real estate transaction, is illegal in eight states: Alaska, Colorado, Florida, Kansas, Maryland, Oklahoma, Texas and Vermont.Inasmuch asInasmuch as
Remuneration of real estate agents
Traditionally, an agent receives a commission which is a percentage of the sale price of the property. The more the house sells, the more money an agent makes. However, with online ads allowing consumers to do much of their shopping on their own without the help of an agent, the traditional payment structure is changing.
Some brokerages charge a lower commission for more expensive houses, and some handle the entire transaction for a flat fee much less than a regular commission. Other companies offer a fee-for-service pricing structure that allows sellers to pay only for certain parts of the selling process, such as adding the property to a Multiple Listing Service (MLS).
You may have heard people use the terms “real estate agent,” “real estate broker,” and “real estate agent” interchangeably. While there is an overlap between the three, there are some key differences.
Real estate agent vs real estate broker
The exact definitions and distinctions between a real estate agent and a real estate broker vary by state. Typically, however, anyone who obtains a basic real estate license (which involves taking a number of accredited courses and passing an exam) can be referred to as a real estate agent. Essentially, a real estate agent is a salesperson, qualified to help consumers buy or sell a property.
A real estate broker is a step up in the professional food chain. Brokers have additional training and education that qualified them to take a higher licensing exam; most states also require that they have some recent experience as an active real estate agent. Brokers manage the technical aspects of the real estate transaction. A client signs a contract with a brokerage, not with the individual agent. In many states, brokers’ additional certification allows them to handle other legal and financial aspects of a transaction, such as managing the deposit deposit and establishing the escrow account.Inasmuch asInasmuch as
Brokers generally own a business or franchise. They can be solo practitioners, but they need to get another higher level license if they want to hire agents or other brokers to work under them. As mentioned earlier, a real estate agent generally cannot work alone but must instead operate through a real estate broker; the exception is in states like Colorado and New Mexico, which require every real estate professional to be licensed as a broker.Inasmuch asInasmuch as Inasmuch asUsually, however, agents work for brokers and share the commissions with them.
Real estate agent vs real estate agent
Thus, every real estate broker is (or has been) a real estate agent, but not all real estate agents are a broker. How do real estate agents fit into the equation?
A real estate agent is a member of the National Association of Realtors (NAR), a professional association. Agents and brokers can be real estate agents, as well as property managers, appraisers, and other professionals in the real estate industry. Real estate agents are expected to be experts in their field and must follow the NAR Code of Ethics, which requires agents to meet specific obligations to clients, the public and other real estate agents. In addition to the NAR, real estate agents must belong to a state or local real estate association or board.Inasmuch asInasmuch as
All real estate agents are real estate agents or brokers (or something similar), but not all real estate agents or brokers are real estate agents. As of July 2020, NAR reported that it had almost 1.4 million members. About two-thirds of them held real estate agent licenses.Inasmuch asInasmuch as