If you’re selling or buying a home, you may be wondering what kind of agent you need to hire. What’s the difference between a buyer’s agent, a listing agent, a seller’s agent, a Realtor®, and a broker? What qualifies an agent to meet your unique homeownership needs?
In this article, we explain the roles agents play in your home sale or purchase, their required level of experience, and the services they provide in your home sale or purchase.
To better answer your questions, we spoke with top-performing agents Rick Ruiz, who sells homes nearly 50% quicker than the average Las Vegas agent; and Robert Dombrowsky, who works with over 85% more single-family homes than the average Fair Lawn, New Jersey agent.
In real estate, it’s not about the name on the front of your jersey. It’s about the name on the back of your jersey. The brokerage you hire is only as good as the agent that’s working for you, who’s going to be out there doing the work, publishing the listing, negotiating prices.
Agent vs. Realtor® vs. Broker
Dombrowsky sums up the similarities between agents, Realtors®, and brokers as follows:
“A real estate agent is licensed by their state to help their clients buy and sell houses. An agent becomes a Realtor® by joining a NAR (National Association of Realtors) association, which adds an additional layer of professionalism. A broker is a licensed agent who has taken more classes and received additional licensing that makes them eligible to run or own a real estate office. An agent cannot do that unless they get a broker’s license.”
Now, let’s discuss the nuances between agents, Realtors®, and brokers.
What is a real estate agent?
Real estate agents are licensed professionals who typically work as independent contractors for a brokerage to guide and represent their clients through a real estate purchase, sale, or rental. While agents may specialize in buying or selling homes or both, and some specialize in luxury, commercial, or condominium sales, the role an agent plays often varies depending on their client’s needs.
Regardless of the role they play, an agent is legally obligated to protect their client’s interest and get the best sale price, or the best deal, for their client. The different types of agents include:
- Also known as a seller’s agent, the listing agent helps homeowners to sell their homes, using expertise and knowledge of the local market to get the best sale price and ensure all the legal requirements are met for a successful home sale.
- The buyer’s agent helps a buyer locate and purchase a home, negotiating the best deal for their client.
- A rental agent or leasing agent helps individuals find and secure a rental property and understand the lease agreement terms. While rental agent fees are typically paid by the landlord depending on the area and the agent, fees may be required from the renter.
“In real estate, it’s not about the name on the front of your jersey. It’s about the name on the back of your jersey. The brokerage you hire is only as good as the agent that’s working for you, who’s going to be out there doing the work, publishing the listing, negotiating prices,” says Ruiz.
What is a Realtor®?
A Realtor® is a licensed real estate agent who is also a member of the National Association of Realtors (NAR) and adheres to its strict code of ethics. There are more than 1.5 million Realtors® today who are members of one or more of NAR’s 1,100 associations or boards on a national, state, or local level.
A few of the standards Realtors® pledge to uphold in the NAR code of ethics include:
- To always protect the best interests of the client
- No misrepresentation, exaggeration, or hiding facts
- To cooperate with other Realtors®
- Disclose any personal interest in a property
- No recommending services for monetary kickbacks
- To present documents to clients in understandable terms
- No denying services on the basis of discrimination
- No false or misleading advertising
- Don’t break the law
According to the National Association of Realtors:
- 68% percent of Realtors® are licensed as sales agents
- 20% hold broker licenses
- 13% hold broker associate licenses
- 8 years is the median real estate experience of all Realtors®
- 5 years is the median tenure of all Realtors® at their present firm
What is a real estate broker?
A real estate broker is a real estate agent who has obtained a state real estate brokerage license and has in-depth knowledge of the real estate business. A brokerage license allows them to work independently, start a brokerage, and hire real estate agents. Brokerages typically receive a percentage of their agents’ commissions.
According to NAR, there are three types of brokers:
- Each real estate office has a principal/designated broker, who oversees all their licensed real estate agents, ensuring they are in compliance with local and federal laws and assuming all the liability of the real estate transactions. A principal/designated broker may also work as a managing broker.
- A managing broker oversees the daily transactions and operations at a real estate office, including the hiring, training, and managing of licensed real estate agents and administrative staff.
- An associate broker who may also be called a broker associate, broker-salesperson, or affiliate broker, is a licensed broker who chooses to work as a salesperson for a brokerage. An associate broker does not typically manage real estate agents and does not assume liability for the firm’s transactions.
What is a real estate team?
A real estate team is a group of agents that share the workload and commissions of their real estate transactions. The team is mentored or led by a licensed and experienced team leader. Team members may be licensed or unlicensed professionals who specialize in one or more of the services that an agent provides, such as transaction coordinators, home stagers, and photographers.
Homeowners or homebuyers who hire a real estate team hire a posse of real estate professionals. According to the NAR, 28% of Realtors® work on teams, and of those that weren’t currently on a team, 16% had previously worked on a team.
What services does a real estate agent provide?
A seller’s agent helps you navigate the sale of their home, providing guidance and expert services to ensure you meet all the legal requirements in your home sale:
The buyer’s agent uses their knowledge of the local market and their expertise to help homebuyers find and purchase a home, guiding and advocating for the buyer to get them the best deal on their real estate purchase:
- Use their MLS access to find a home that meets the homebuyer’s needs
- Present a strong offer and negotiate counteroffers on behalf of the buyer
- Prepare the purchase agreement
- Help homebuyers navigate the transaction
- Guide homebuyers through the inspection and make recommendations for repairs
- Sit with the buyer at the closing table
What does it take to become a real estate agent?
Real estate licensing requirements are handled on a state level; there are no federal requirements. Each state has a minimum age and education requirements which may include a high school diploma or GED, fingerprinting and background checks, application fees, courses, exams, post-licensing requirements, or expected continuing education.
While the requirements vary from state to state, real estate licensing typically takes two to four months and includes:
- Take 90 hours of real estate agent pre-licensing classroom or online instruction, which includes a precertification exam: $400-$700
- Take and pass the state real estate licensing exam, $50-$75
- Apply for licensing with the state regulatory office, including fingerprinting and background check: $300-$500
- Obtain employment under a licensed real estate brokerage
Agents can also go a step further to become members of the NAR and hold the title of Realtor®.
How much does a real estate agent make?
According to Glassdoor, the average salary for real estate agents and brokers is:
In today’s competitive market, Dombrowsky believes there’s a widening gap between top sellers and average sellers.
“The agent who has less experience, who works exclusively as a buyer’s agent, or who is doing the business part-time is going to be making less because they’re not always winning the bidding war.”
How many homes does a real estate agent sell?
If you’re wondering how many homes a real estate agent sells in a year, the answer is that it depends. While the median home sales for real estate agents is 12 per year, many factors determine how many homes a real estate agent might sell per year. Consider:
- A hobbyist or part-time agent may sell one home for a friend or a few homes as a side job.
- An agent who specializes in luxury homes tends to sell fewer homes at a higher price point.
- Top producers and teams tend to sell more homes.
- Supersellers, like Ruiz, may sell hundreds of homes per year.
- In a competitive market, the average agent closes even fewer deals while the top sellers close even more.
“The landscape of the real estate world is traditionally a 90/10 business, ninety percent of the business is done by ten percent of the agents. In an uber-competitive market that we’re experiencing right now, that gets even tighter and it turns into more of a 95/5 business. It’s much more competitive,” says Ruiz.
Partner with an experienced top agent to sell your house
Understanding the differences between an agent, a Realtor®, and a broker is just the first step to choosing a real estate agent to help sell your home. How smoothly the selling process will go and how much you’ll profit in the sale very much depends on the level of experience and knowledge an agent has. One of the most important decisions you can make in your home sale is hiring a reputable, top-performing agent who is a good match for your needs.
Let HomeLight help you with that decision. It takes just two minutes to match you with the best real estate agents in your area, who can successfully guide you through the entire buying or selling process.
Try HomeLight’s free Agent Match Tool at this link, or enter your city name or browse by state at this link.
Header Image Source: (James Kemp / Unsplash)