Even if you’ve never purchased or sold a property before, chances are you are at least passingly familiar with the idea of real estate agents. That’s because, in many ways, real estate agents are the most visible face of the homebuying process. From helping buyers locate a property that meets their expectations, to marketing a property for a seller, to facilitating communication between multiple parties throughout the course of the sale, the right real estate agent is your partner from start to finish.
But what exactly is a real estate agent? What does a real estate agent do? And what should you know about working with real estate agents? Here, as part of our Beginner’s Guide for Home Sellers, we take a closer look at the roles real estate agents play in buying and selling homes.
A real estate agent is a licensed professional who acts as a representative of one or more parties during a real estate transaction. These agents help their clients navigate the various stages of buying and selling a property. A real estate agent may be both a listing agent (working on behalf of the seller) and a buyer’s agent, and in both cases has the legal obligation to protect their clients’ interests.
Real estate agents almost always work entirely for commission, being paid a percentage of the property’s final sale price (usually 5%–6%) rather than earning a set yearly salary. As such, a real estate agent’s success depends on their ability to close deals effectively and to the satisfaction of their clients. Given the large investment of time and effort in a single sale, a real estate agent may only close a handful of deals per year.
Although the terms real estate agent and realtor are sometimes used interchangeably, they are not actually the same thing. A real estate agent is an individual who holds a license from their state to assist in buying or selling property; a realtor (or, more accurately, a REALTOR®) is a member of the National Association of REALTORS® (NAR). Most REALTORS® are also real estate agents.
As mentioned above, the main purpose of the real estate agent is to represent their client (whether buying or selling) in a real estate transaction. There are different kinds of real estate agents that specialize in specific duties, but most of them perform the following tasks as part of their professional services:
Essentially, the real estate agent is there to help ensure that the process moves forward and that their clients are satisfied. But how do these duties relate specifically to listing agents and buyer’s agents?
Experienced real estate agents understand the selling market and can provide expert insights into how to position the property and update the home for a successful home sale. They work with their clients to set a realistic listing price. They likewise vet potential homebuyers before they allow them to progress through the buying process.
In terms of your home marketing efforts, real estate agents take the lead in creating marketing plans, setting up open houses, and producing promotional materials. They are also responsible for submitting the home into the local multiple listing service (MLS) database.
Finally, real estate agents can be extremely useful during the closing process. An experienced agent will be able to negotiate on your behalf, and will also be responsible for preparing and submitting contracts, agreements, and other important documentation.
A buyer’s agent must be closely in tune with the buyer’s wants, needs, preferences, and price range. They then use that information to scout houses (both online and in-person) to create a list of potential for-sale properties that meet the buyer’s requirements. The agent works within the buyer's schedule to set up home showings.
The buyer’s agent will also use their own networks and connections to build relationships with professionals in the industry, including home inspectors, appraisers, and mortgage loan officers. These relationships can provide buyers with trusted support as they progress through the process.
Once the buyer has found a property that they would like to purchase, the real estate agent will help them submit an official bid and will continue to remain on their team to assist with any negotiating on price, closing costs, and other relevant fees. The buyer’s agent also guides the buyer through the rest of the closing process, assisting with contracts, agreements, and other documentation and finally submitting all of the necessary paperwork on behalf of their client.
Real estate agents provide many useful services and can help facilitate a less stressful buying/selling experience. But are they worth it? After all, agents earn their money on commission and receive a percentage of the final home sale price, and 5%–6% can really add up. For example, on a $400,000 home, the agent would take home $20,000. For a home seller, that means $20,000 less for you from the proceeds on your property.
But what about the value the agent brings to the table? With the right guidance, industry know-how, professional connections, and negotiation skills, a talented agent can more than make up for the cost of their fees. Add to that the weight of the time commitment an agent takes off of the shoulders of their clients, and it’s no surprise that most buyers and sellers choose to work with real estate agents.
But whether hiring an agent is ‘worth’ it is something that only you can decide for yourself.
There’s a lot riding on the successful sale of your home. This means that if you decide to work with a real estate agent, you shouldn’t settle for just anyone. Knowing how to find a real estate agent may not be enough; you’ll need to get to know them and make sure that your personalities, styles, and goals are in line before you commit to any kind of relationship.
As you evaluate your options, ask the agent direct questions about how they work, how they prefer to communicate, and what kind of fee structure they use. Ask for references from the agent and follow up on them to get more detailed feedback on what kind of experience former clients may have had. Then, expand your research to take into account online reviews and other available information (including their credentials, licensing status, and what their listings may say about their current demand and workload).
In the end, the extra effort you put into finding a good real estate agent will help ensure a positive selling experience and (hopefully) a higher selling price on your property.
The best real estate agents are more than just transactional hires; they’re your guides and representatives in the often-complex world of real estate transactions. The more you understand what these agents do and how they can help you from start to finish, the better you’ll be able to navigate the home selling process.
Want to know if a real estate agent is right for you? Take our quiz to find out!