Real estate agent
A real estate agent is a person who is trained and licensed to sell real property. They act as a third party connecting home sellers with prospective buyers and facilitate sale negotiations. They are compensated from sales, so their income depends directly on the number of deals they are able to close. In most states, agents are not allowed to contract with customers on their own but through a broker.
The job of a Real estate agent
Real estate agents have various duties to fulfill on the way to real estate transaction. They typically focus on a specific type of real estate - commercial or residential one - but the range of jobs a real estate agent needs to perform is largely about what party they represent. Agents hired by the seller, also called listing agents, help to identify an accurate price the property based on the current market valuations to capture more buyers and provide speedy offers.They can also advise on how to boost that price by last-minute improvements.To find buyers, listing agents use listing services and social networking where real estate advertisements are published.
Buying agents are approached by those wanting to buy a property. Such agents’ job is to offer best-matching options that suit the buyer’s preferences within the given price range. Buying agents closely analyze the real estate market and often refer to their past sales data on similar property to judge if the listing prices look reasonable and help the buyer submit a fair bid.
Real estate agents bridge the gap between the seller and buyer in negotiations. They communicate offers and counter offers until both parties are ready to enter the final purchase agreement. At this point, the real estate agents have not finished their work yet. As a rule, they carry on participating in home-selling on both ends, taking care of the necessary paperwork, ensuring ongoing communication between clients and taking them further through inspections and moving to closing of the deal.
Whichever party a real estate agent works for, they must stay neutral towards both and disclose their representation before negotiations. Otherwise, their involvement in the buyer and seller relationship can critically affect the process, as well as the conditions and final price of the contract. In some cases, one agent can work for both parties, but ‘dual agency’ is illegal in some states.
Real estate agents’ salary
Now, as online listings are gaining popularity, many functions of real estate agents are taken over by customers. With their ability to simply access an online real estate platform and go through the listing/selecting process with the help of numerous tools, there is no such need in the real estate salespersons as before.
Most real estate agents work on commission. However, as the traditional culture of buying and selling homes begins to change, so do the payment structures. Some brokerage firms offer price-based commission rates, so buying expensive property can save you money thanks to lower charge. Some real estate brokers use a flat-fee pricing model with a fixed payment that costs their customers less than traditional commission.
Who is who: Real estate agents, brokers and realtors
You may have come across the terms “real estate agent,” “real estate broker,” and “realtor” used with no clear distinctions. While these are certainly overlapping terms, they stand for slightly different players in the real estate market.
Agents vs brokers. Due to the differences in state regulations, the portrait and functions of real estate agents can vary. Simply put, any person who has trained at a state-approved real estate school or taken up licensing courses can qualify as a real estate agent, given that they have completed those courses and passed an exam. Real estate agents are merely authorized to provide support with buying and selling processes and have to operate through a broker, splitting commission with them.
Having obtained the basics, real estate agents can further grow in their career to become a broker. To qualify for the next-level certification, real estate agents must have a certain amount of recent industry experience and invest into additional courses. Once certified, real estate brokers are granted the right to manage the technical side of real estate transactions. It is often that real agents cannot perform financial and legal operations like making an earnest money deposit and maintaining escrow accounts.
Brokers can continue to work individually as an associate to a real agency, or open their own firm. Again, if they decide to progress further and build a brokerage - full-service team of real estate professionals - they have to go through additional training and earn another higher degree license. In result, they will be able to hire agents, activate real estate licenses and influence real estate professionals’ careers.
Agents vs realtors. It is clear that each real estate broker starts as an agent, but not all of them continue as brokers. The list of real estate workers has many more job titles, such as property managers, appraisers and others. With a profound understanding of the industry and excellent public reputation, any of them can join the National Association of Realtors (NAR) and earn the status of a realtor. All realtors are essentially members of a state association or board and commit to strong values and ethical standards of behavior with clients and the public.
So the equation goes as follows: all brokers are - or have been - agents, but only some agents become brokers; all realtors are agents or brokers - or similar practitioners, but not all agents and brokers belong to realtors. As reported by NAR in 2020, it had about 1.5 million members with only two thirds of them licensed agents.