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Whether you’re searching for a new home or hoping to sell the property you’re currently living in, identifying the right type of real estate professional to work with can make a big difference to your success. There are various types of real estate agents and it’s important to understand the role and expertise of each so that you can find the professional best suited for your needs.
Real estate agent
A real estate agent is a professional whose occupation is representing individuals in the process of buying a home and selling homes. Real estate agents must pass an exam in the state where they intend to do business in order to obtain a real estate license. In addition, real estate agents must complete a certain number of hours of related coursework in order to receive a real estate license, though this requirement varies state to state.
The real estate agent occupation dates back to more than a century: to about 1900 when agents began showing homes for lease or purchase. Real estate agents can represent a variety of clients, from individual home buyers and sellers to property investors.
As of 2022, there’s about 4.1 million licensee records in the database maintained by the Association of Real Estate License Law Officials.
A Realtor (yes, it’s written with a capital R) is a professional who not only has their real estate license and has completed relevant coursework, but is also a member of the National Association of Realtors (NAR), a private, non-profit association of professionals in the real estate industry.
In addition to being a trademarked term, the designation of Realtor, which is sometimes written all in caps as REALTOR, identifies a professional who is expected to follow a strict code of ethics.
While it is entirely possible to be a fully licensed real estate agent who is not a member of NAR, such individuals cannot use the Realtor designation. As of September 2022, NAR has about 1.5 million members.
Real estate broker
The third primary type of real estate agent is a broker. Like traditional real estate agents, a broker is a licensed professional who has undergone required training or coursework. And, like a real estate agent, a broker can help you with buying a new home and selling your current home.
However, a broker has more legal and financial responsibilities than an agent does. Agents are licensed to sell property and represent property buyers; brokers are licensed to oversee property sales. They ensure all real estate transactions are compliant with state and federal regulations, and all paperwork complete and correct. Unlike real estate agents, a broker also has the ability to move money in and out of escrow accounts.
A broker has also completed additional training and licensing beyond what a real estate agent has completed. There’s an advanced state exam to be taken in order to earn the title of broker. And once an individual obtains that title, they can work on their own or run their own real estate firm, hiring and managing other agents or brokers. In fact, real estate agents must work under the sponsorship of a broker or with a brokerage.
Specialized real estate professionals
Among real estate agents there are some additional differences to be aware of. Like other professionals, real estate agents often have specialities.
Listing agent: A listing or seller’s agent is a professional who specifically represents the seller in a real estate transaction. As part of this role, the real estate agent may list the property for sale, market the property and be the one who is present for open houses. A listing agent will typically also serve as the point of contact for potential home buyers and their agents. When offers are received on the home, a listing agent will review the bids and help negotiate a final deal for the seller.
Buyer’s agent: A buyer’s agent, on the other hand, represents the person, or group of people, seeking to buy a property. Some of the tasks this professional will perform include finding properties for buyers to visit, making recommendations regarding how much to offer for a home, and helping to negotiate a deal. Buyer’s agents may also perform a market analysis to help identify a fair value for a home the buyer is interested in and may also recommend other professionals during the purchase process, such as home inspectors. Buyer’s agents can be especially helpful for first-time home buyers who lack experience navigating the purchase process.
Dual agent: While not legal in all states across the country, a dual agent is a real estate agent who simultaneously represents both the buyer and the seller in a real estate sale. This type of transaction can be challenging because it may be difficult for a dual agent to fairly represent the interests of both parties in such a transaction and there is a higher likelihood of a conflict of interest.
Commercial real estate agent: Commercial real estate agents typically focus on helping people buy, sell or even lease properties that will be used for business or professional activities, as opposed to residential ones. Like a residential real estate agent, commercial real estate agents must complete coursework and successfully pass a test to obtain a license.
The NAR also awards specialized credentials for its Realtor members, indicating extra training and/or experience in certain areas of real estate. These designations include:
- Accredited Buyer’s Representative / ABR
- Accredited Land Consultant / ALC
- Certified International Property Specialist / CIPS
- Certified Real Estate Team Specialist / C-RETS
- Luxury Homes Certification / LHC
- Resort & Second-Home Property Specialist / RSPS
- Seller Representative Specialist / SRS
- Seniors Real Estate Specialist / SRES
Finding a real estate agent
When you’re ready to buy or sell a home, finding an agent you are comfortable working with and can trust is an important first step. Buying or selling a home is one of the most financially significant transactions most people engage in and the right agent can help make the process far less daunting.
You can start the search process by asking friends or relatives to provide references to real estate agents they have used in the past and liked. It’s also a good idea to interview at least two to three different agents. Some of the questions to ask include how long they have been in business, what their typical sales volume is like, and what types of properties or neighborhoods they specialize in. You’ll also want to inquire about how and how often they will talk with you, as effective communication is key throughout a real estate transaction.
In addition, if you’re selling a home, be sure to ask an agent about how they plan to market your home, and what percentage of the homes they sold achieved or exceeded their asking price.