Maybe you want to buy or sell a property, or maybe you are thinking in become a real estate agent. In any case, you are wondering: What real estate agent do?. So let´s start from the beginning.
A real estate agent, also known as a real estate salesperson or Realtor® (if they are a member of the National Association of Realtors), is a licensed professional who assists buyers and sellers in real estate transactions. They are trained and authorized to represent clients in buying, selling, or renting properties.
Real estate agents act as intermediaries between buyers and sellers, providing expertise and guidance throughout the process. They have a deep understanding of the local real estate market and possess knowledge about property values, market trends, financing options, and legal regulations.
It’s worth noting that real estate agents must be licensed and adhere to specific regulations and ethical standards established by their respective real estate boards or associations. Additionally, some agents specialize in specific types of properties or areas, such as residential, commercial, luxury, or rental properties.
Differences Between Real Estate vs Realtor
To have a clear view of what real estate agent do, we have to point out that is not the same as being a real estate agent as a Realtor®. Here are the key differences:
- Definition: Real estate refers to property, land, buildings, and other assets associated with the land. It is a broad term that encompasses physical properties and the industry surrounding them. On the other hand, a Realtor® is a licensed real estate professional who is a member of the National Association of Realtors (NAR) and adheres to a specific Code of Ethics.
- Licensing: Real estate licensing refers to the process of obtaining a license to legally practice real estate. It involves completing required education, passing a licensing exam, and meeting other state-specific requirements. A licensed real estate professional can work as a real estate agent or a real estate broker. On the other hand, a Realtor® is a real estate agent or broker who is a member of the NAR and subscribes to its Code of Ethics.
- Membership: Membership in the National Association of Realtors is voluntary for real estate professionals. By becoming a member, real estate agents and brokers can use the term “Realtor®” as a registered trademark. Not all real estate professionals are Realtors®, but all Realtors® are licensed real estate professionals.
- Code of Ethics: Realtors® are required to abide by the NAR’s Code of Ethics, which sets professional standards and ethical conduct for its members. This code emphasizes honesty, integrity, fair treatment, confidentiality, and protecting the interests of clients and the public. Real estate agents who are not members of the NAR are not bound by this specific code but are still required to adhere to their state’s real estate laws and regulations.
- Benefits and Resources: Realtors® have access to a range of benefits and resources through their membership in the NAR. This includes educational opportunities, networking events, industry publications, market data, and advocacy efforts to support the real estate profession.
- Branding and Marketing: The term “Realtor®” is a registered trademark owned by the NAR. Realtors® can use this designation to differentiate themselves and convey their commitment to professional standards and ethics. It can be an important branding and marketing tool for real estate professionals.
It’s important to note that the term “real estate agent” is often used more broadly to refer to both licensed agents and brokers, while the term “Realtor®” specifically refers to a licensed agent or broker who is a member of the NAR.
How Real Estate Commissions Work
Real estate commissions are the fees paid to real estate agents or brokers for their services in facilitating a real estate transaction. The commissions are the main gain for what real estate agent do. Here’s how real estate commissions typically work:
- Percentage-based commission:
Real estate commissions are most commonly calculated as a percentage of the final sale price of the property. The commission rate is agreed upon between the seller and the listing agent before the property is listed for sale. The commission is typically shared between the listing agent (representing the seller) and the buyer’s agent.
- Split between agents and brokers:
Real estate agents typically work under the supervision of a real estate broker. When a transaction occurs, the commission is split between the listing agent and the buyer’s agent, and a portion of the commission is paid to their respective brokers. The specific commission split between agents and brokers may vary based on individual agreements and brokerage policies.
The commission rate is negotiable between the seller and the listing agent. The typical commission rate can vary depending on factors such as the location, type of property, market conditions, and the specific services provided by the agent. It’s essential for sellers to have a clear understanding of the commission structure and negotiate it upfront when entering into a listing agreement.
- Paid at closing:
The commission is typically paid by the seller at the closing of the real estate transaction. It is deducted from the proceeds of the sale before the seller receives their net proceeds. The commission is paid to the listing broker, who then distributes the appropriate shares to the listing agent and the buyer’s agent’s broker.
- Buyer’s agent commission:
The listing agent and the seller’s broker agree on the total commission, which is usually shared with the buyer’s agent or broker who brings the buyer to the transaction. The specific split between the listing agent and the buyer’s agent is typically outlined in the Multiple Listing Service (MLS) system, where properties are listed and shared among agents.
It’s important to note that commission rates are not fixed or regulated and can vary among different markets, regions, and individual real estate professionals. It’s advisable for sellers to discuss and negotiate commission rates with potential listing agents before signing a listing agreement.
It’s also worth mentioning that in some cases, real estate professionals may offer alternative fee structures, such as flat fees or hourly rates, depending on the specific services required and the agreement between the client and the agent or broker.
At last, we want to let you know if you are a real estate agent or a Realtor®, that in BuyHouseEZ we have a great Agents Program. Doing co-branding and collaborating in every way to help you grow your business. Give us a call or let us your contact information and our team will reach you giving you the information you need to be part of, and answering all of your questions.