Real Estate Agent : Meaning, Types & Need

Who is a Real Estate Agent?

A Real Estate Agent is a professional licensed by the state who helps people buy and sell properties. Their primary job is to represent clients who want to purchase or sell the home they currently own. An agent works to understand what their client is looking for in a property and then guides them through buying or selling. Real estate agents will take special classes in law, financing, economics, and more. They have to pass exams to show they understand these concepts. They also must meet other state license requirements to be allowed to practice real estate and get paid commissions when they close sales. There are different types of real estate agents. Some specialise in representing buyers, helping them find suitable properties, and negotiating deals. Others focus on listing and selling client properties.

Geeky Takeaways:

• A real estate agent is a licensed professional who facilitates the buying and selling of real estate.
• Their pivotal role is to represent clients in transactions as their buyer’s or seller’s agent.
• They have to understand client property needs and guide them through the process.
• They will be paid primarily through earned commissions on successful deals. It also includes commissions split with the overseeing brokerage.

Types of Real Estate Agents

1. Real Estate Broker: A broker holds a license that allows them to perform various real estate activities. In addition to listing and finding buyers/sellers, brokers are responsible for supervising other agents and handling the contractual and regulatory aspects of transactions. They have experience closing many deals. Some brokers specialise in certain areas like residential, commercial, luxury homes, etc.

2. Buyer’s Agent: A buyer’s agent is solely focused on serving the buyer. They help buyers find listings that match their criteria like location, size, price, etc. The agent will accompany the buyer to view properties, negotiate prices and terms on their behalf, and guide them through the entire purchasing process. The buyer’s agent is compensated through a percentage of the home purchase price paid by the seller.

3. Seller’s Agent: Like the buyer’s agent, a seller’s agent exclusively represents the seller. They will assess the seller’s home, suggest ways to make it more appealing, determine a listing price, market, and advertise the listing, show the home to prospective buyers, field offers, and facilitate negotiations. The seller’s agent earns a percentage of the final sale price paid by the seller upon closing the deal.

4. Dual Agents: In a dual agency, the same agent represents both the buyer and seller in a transaction. This is only allowed if both parties consent in writing. While intended to be neutral, dual agents can potentially have conflicts of interest since they are working for opposing sides simultaneously. Extra care needs to be taken to ensure fairness to both buyers and sellers.

What Does a Real Estate Agent do?

I. Representing Buyers

1. Assessing Client Needs And Identifying Properties: When taking on a new buyer client, the real estate agent starts by having an extensive conversation to fully understand what the client is looking for in a new home across all attributes (location, size, amenities, school districts, etc.). The agent asks probing questions to determine must-haves versus nice-to-haves and establishes the maximum budget. After capturing the ideal specifications, the agent thoroughly researches the current property listings available on online platforms to identify all options that closely align with the client’s wish list.

2. Making Offers And Negotiating Contracts: Once a buyer decides on a home they wish to pursue, the buyer’s agent guides them through crafting a competitive offer. The agent assists the buyer in deciding an appropriate dollar amount to offer based on factors like comparable sales, time on the market, interest rates, and seller circumstances if known. The agent ensures all documentation is completed thoroughly, including earnest money deposit, proposed move-in timeline, contingency clauses, etc.

II. Representing Sellers

1. Pricing And Marketing Property Listings: Before placing a new listing on the market, an imperative role of the seller’s real estate agent is determining an appropriate listing price. The agent performs thorough market analysis by running comparisons based on recent sales of similar nearby homes. Factors like square footage, age, renovations, school districts, and more are taken into account to evaluate apples-to-apples comps with sold homes. The agent synthesizes insights to guide the seller’s client in listing at a price that aligns with current market demand.

2. Showings And Offer Negotiations: As interest and showings pick up steam, the seller’s agent takes on a few key responsibilities. The agent fields inquiries from buyer agents on details about the home, provides necessary documentation like disclosure forms, and schedules showings at the seller’s convenience while adhering to contractual obligations.

Why do we Need a Real Estate Agent?

1. Expertise in the Local Market: Agents have in-depth knowledge about housing inventory, pricing trends, market conditions, and neighborhood attributes in their local area. This comes from years of experience facilitating many transactions. As a buyer or seller, a normal individual does not have this level of expertise.

2. Access to Multiple Listing Services (MLS): MLS is a private database of properties listed for sale by real estate brokers in a given region. It provides a much more comprehensive view of inventory than what’s visible to the general public online. Agents can tap into MLS to find the perfect property for your needs or get maximum exposure for your listing.

3. Marketing And Advertising: Agents promote listed properties through listings on websites like Realtor.com, social media campaigns, open houses, and broker tours. This wide-reaching exposure increases visibility and the chances of finding interested buyers. As a DIY seller, your efforts cannot match the marketing power of an established agent/brokerage.

4. Negotiation Skills: Real estate negotiations can be complex with many moving parts. Agents are trained negotiators who can leverage their experience and industry knowledge to obtain the best deal possible. Whether pushing the sale price higher as a seller or lower as a buyer, agents’ negotiation expertise provides tangible value.

5. Inspection Assistance: Home inspections are an important part of the buying process. Agents understand how to interpret inspection reports and can advise you on resolving any issues that arise, such as recommending trusted contractors. They know what types of problems are common and how to address them.

6. Objectivity: As a representative working on commission, agents have no emotional attachment to the property. They provide a balanced, third-party perspective during what can otherwise be an emotionally charged process for buyers and sellers. Their objectivity is valuable for making well-informed decisions.

Difference Between Real Estate Agent and Real Estate Broker

Basis	Real Estate Agent	Real Estate Broker
Licensing Requirements	Must pass state exams and meet state requirements.	Need additional schooling and experience to pass broker exam.
Scope of Work	Work directly with buyers and sellers as clients.	Oversee transactions and manage a team of sales agents.
Management Responsibilities	There are no managerial responsibilities.	Manage agents, ensure compliance, handle finances, and oversee closings.
Commission Splits	Share a portion of earned commission with the broker.	Earn from commission splits when agents close deals.
Ability to Open Office	Cannot independently open or own a brokerage.	Can fully and independently open or own a brokerage.

Difference Between Real Estate Agent and Realtor

Basis	Real Estate Agent	Realtor
Membership	May or may not join the National Association of Realtors (NAR).	All Realtors are real estate agents, paying membership dues.
Code of Ethics	No specific code of ethics is required.	Must adhere to the NAR Code of Ethics.
Education	Completes state licensing education requirements.	Completes additional orientation on the Realtor Code of Ethics.
Mediation Process	No specific mediation or arbitration services.	Access to mediation and arbitration services through local realtor boards.
Right to Use Realtor Mark	Cannot use the term “Realtor” or the associated trademark.	Can use the term “Realtor” and the federally registered trademark upon membership.

Frequently Asked Questions (FAQs)

1. How do I get a genuine real estate agent?

Answer:

Ask for referrals from friends or family who recently bought or sold. Interview a few agents, and ask about their experience, marketing plan, and negotiation style. Check online reviews.

2. How much do real estate agents cost?

Answer:

Most agents earn a commission based on a percentage of the home sale price, usually around 5-6%. For buyers, sellers pay this commission through closing costs.

3. Can I buy or sell a home without an agent?

Answer:

Yes! You can, but it’s generally not recommended. Agents provide expertise that can save you money and headaches in the long run. FSBO (For Sale By Owner) listings also get less exposure.

4. How much time does it take to sell a house?

Answer:

It can vary significantly based on location and market conditions. On average, most homes sell within 60-90 days. Well-priced homes in hot markets may sell within a couple of weeks.

5. What services should I expect from my agent?

Answer:

Listing/marketing plan, open houses, showing coordination, pricing guidance, negotiation assistance, paperwork/process guidance, and being available to answer questions. A good agent is responsive throughout the entire transaction.