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Are you someone getting ready to make the biggest purchase of your life or to sell your most valuable asset? Will you rely solely on advice from family and friends, or also seek help from a trained, licensed real estate agent who understands your housing market and can guide you through what can be a long and arduous process?
For more than 100 years, real estate agents have worked with home sellers and buyers, educating and ensuring each gets the best deal possible. But with technology that makes it easier to find a home on your own and a closer examination of how real estate agents are compensated, do you still need someone to guide you through your real estate journey? Read on to learn what real estate agents do and if you want to use one.
Learn more: How to buy a house
What is a real estate agent?
A real estate agent is a trained, licensed professional who works with buyers, sellers, or both to help them buy or sell a home, land, or commercial property. While many real estate agents specialize in residential sales and others specialize in commercial real estate, some work with both properties.
Real estate agents must be trained in their state’s specific rules and contracts, pass an exam, and often fulfill specific continuing education requirements.
Dig deeper: Everything you need to know as a first-time home buyer in 2024
What are the different types of real estate agents?
While the terms real estate agent, real estate broker, and Realtor are often used interchangeably, they’re not exactly the same. Here are the differences between the various types of real estate agents:
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Real estate agent vs. broker: A real estate broker is a real estate agent who has additional training and experience and has passed an exam to earn a broker’s license. In many real estate companies, agents work for a broker who provides resources and earns part of the agent’s commission.
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Real estate agent vs. Realtor: A Realtor refers to a member of the National Association of Realtors, which means they adhere to the association’s Code of Ethics and have access to its continuing education resources.
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Real estate agent vs. Realtist: A Realtist is a member of the National Association of Real Estate Brokers, one of the oldest minority trade associations in the U.S., and follows its Code of Ethics. Many Realtists are also Realtors.
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Buyer’s agent vs. Seller’s agent: Some real estate agents work only with buyers, and others work solely with homeowners selling their houses. Most represent buyers in some transactions and sellers in other transactions.
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Dual agent: A dual agent works with both the buyer and seller in the same real estate transaction, but must disclose the relationship with both sides. In some states (Alaska, Colorado, Florida, Kansas, Maryland, Texas, Vermont, and Wyoming), dual agency is illegal.
Dig deeper: 12 questions to ask when buying a house
Buyer’s agent vs. seller’s agent
While many buyers find homes online, a real estate agent provides more services than just identifying potential homes.
Buyer’s agent
For prospective buyers, here’s what a real estate agent does:
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Explains the process of buying a home in the context of local real estate market conditions
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Discusses your priorities, including “must-have” and “want-to-have” features, your neighborhood, home style, and condition preferences in the context of your budget
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Identifies potential properties and explain their pros and cons
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Often provides information about future listings
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Communicates with the seller’s agent to understand the conditions of the sale
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Refers you to mortgage lenders, title companies, attorneys, home inspectors, insurance agents, moving companies, and contractors
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Helps you determine how much to offer on a house
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Represents you during negotiations
Read more: Is it a good time to buy a house?
Seller’s agent
For sellers, real estate agents do the following:
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Advise you on renovations or staging to improve your home’s appearance to buyers
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Provide a market analysis to help you price your home
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Market your home to potential buyers with photographs, information and listings on a variety of sites
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Communicate with buyers and their agents
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Check on buyers to make sure they qualify to buy your home
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Negotiate offers
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Guide the transaction to completion
Learn more: How to sell your house without a Realtor
How to find the best real estate agent for you
Whether you’re a buyer or a seller, your relationship with your real estate agent will likely be both professional and personal. It’s important to choose someone you feel comfortable with to share financial information and lifestyle preferences.
To find a real estate agent, ask friends and colleagues for referrals, particularly if they have bought or sold a house recently in your price range or preferred neighborhood. Ask a mortgage lender or other real estate professional for recommendations. Check out the websites of a few referrals and schedule an interview to see if your personalities and communication styles match.
At the interview, ask about their experience with buyers or sellers in similar circumstances to yours and how they plan to work with you in your local market. Ask for referrals to past clients you can call for more information.
Dig deeper: How much does it cost to sell your house?
How are real estate agents paid?
In most cases, real estate agents are paid a commission based on the sales price of a property. Real estate agents representing the buyer and the seller split commissions that average 5% to 6% in total. Sellers can ask agents if they’ll negotiate the size of the commission. Typically, the payment for each real estate agent is subtracted from the proceeds of the sale at the closing.
However, the recent NAR settlement is about to change the details of how real estate agents earn money (and who pays for their commissions). More on that below.
Read more: How much money do I need to buy a house?
The impact of real estate commission lawsuits
A series of lawsuits in several states brought by consumers in 2023 and 2024 against the National Association of Realtors and multiple large real estate brokerages, such as HomeServices of America, RE/MAX, Keller Williams Realty, and Anywhere Real Estate, accuses them of anticompetitive actions that artificially inflate the commissions paid to real estate agents. In March 2024, the NAR settled a lawsuit and paid $418 million in damages.
Here are the two main results, beginning Aug. 17:
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Real estate agents are no longer be allowed to include the commission for the buyer’s agent when listing a home on Multiple Listing Services (MLS) databases.
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As a buyer, before you can start working with a real estate agent, you have to sign a contract stating what the commission will be.
So, yes, some buyers now have to pay for their real estate agents’ commissions. But you have the power to negotiate before signing the contract, and if you’re in a buyer’s market, the seller may agree to pay your agent’s commission.
What does a real estate agent do? FAQs
What is the job description of an estate agent?
A seller’s agent lists the home on MLS databases, helps you set the asking price, sets up open houses and viewings, and more. A buyer’s agent helps you shop for homes, schedule appraisals, and craft a competitive offer.
What are the most important duties of a real estate agent?
The most important duties of a real estate agent are to get you a good price (whether you’re the buyer or seller) and work around your other priorities. For example, if you need to close within a certain amount of time, your agent should put that need at the top of their list.
What’s the difference between a real estate agent and Realtor?
Real estate agents and Realtors are both licensed to help with real estate transactions. A Realtor is a member of the National Association of Realtors (NAR) and completes a little more education than an agent. A Realtor also might have access to more Multiple Listing Services than an agent.