What is a ‘Real Estate Agent’?
Real estate agents are licensed professionals who represent buyers and sellers in real estate transactions. Most agents work for a real estate broker or realtor who has additional training and extra certifications. Agents usually work completely on commission, so their income depends on their ability to assist clients and close transactions.
BREAKING DOWN ‘Real Estate Agent’
Agents perform different duties, depending on whether they work for the buyer or the seller. Agents who work for the seller advise clients on how to price the house and prepare it for sale, including providing tips on last-minute improvements that can boost the price or encourage a speedy sale. Seller agents market the property through listing services, networking and advertisements. Agents who work for the buyer search for available properties that match the buyer’s price range and wish list. These agents often look at past sale data to help prospective buyers determine a fair offer for a particular property.
Can a Real Estate Agent Represent Both the Buyer and the Seller?
It’s important for consumers to understand whether a real estate agent represents the buyer, the seller or both parties because the agent’s loyalty can greatly affect several details of the transaction, including the final price. State laws regulate whether an agent can represent both sides of a real estate transaction, and most states allow this. Agents must disclose their representation so that buyers and sellers are aware of any conflicts.
What Are the Differences Among Agents, Brokers and Realtors?
Real estate brokers typically own a firm or a franchise, and they are responsible for setting up earnest money accounts and for approving final contracts. States require brokers to take significantly more classes and to pass more exams than agents. Agents work for brokers, and they split their commissions with these supervisors. A Realtor is a member of the National Association of REALTORS. As of Dec. 31, 2017, the organization reported that it had more than 1.3 million members. Both agents and brokers can be Realtors. (For more, see: What are the Differences Among a Real Estate Agent, a Broker and a Realtor).
How Are Real Estate Agents Paid?
Traditionally, an agent is paid a commission that is a percentage of the property’s sale price. The more the house sells for, the more money an agent makes. However, with online listings allowing consumers to do much of the shopping on their own without help from 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 that’s much less than a regular commission. Other companies offer a fee-for-service pricing structure that lets sellers pay only for certain parts of the sale process, such as adding the property to an multiple listing service.