What is a real estate agent and how do they help you buy a home?
Quick insights
- Real estate agents are licensed professionals who guide buyers and sellers through complex property transactions with their expertise in market trends, legal compliance and negotiation strategies.
- Agents give you access to exclusive property listings, assist with paperwork and coordinate with inspectors, appraisers and title companies to facilitate a smooth closing process.
- Take the time to choose the right agent, as their connections, professionalism and local market knowledge can significantly impact the success and ease of your homebuying or selling experience.
Buying a home may seem overwhelming, especially if you're a first-time buyer. If you don't have experience, you may not know where to buy or how to make an appropriate offer. That's where a real estate agent comes in.
But what is a real estate agent, exactly? And do you really need to hire one?
A real estate agent can be an invaluable resource as you navigate the homebuying journey. They are there every step of the way. Learn what to expect from your real estate agent and what they do.
What is a real estate agent?
A common misconception is that a real estate agent is just a glorified salesperson, but that couldn't be further from the truth.
Real estate agents are licensed professionals especially trained to represent buyers, sellers or both in real estate transactions. Their primary role is to facilitate what is often a highly complex and emotionally charged process. Agents are required to pass state-approved licensing exams and must operate under a licensed real estate broker.
Many agents specialize in residential real estate, helping individuals and families buy or sell their homes. Others focus on commercial properties, leasing or selling spaces for businesses.
Years ago, an agent's main responsibility was to serve as a gatekeeper who matched buyers with available homes. Today, their duties encompass everything from leveraging advanced digital marketing tools to accessing the multiple listing services (MLS), which are extensive databases of properties that aren't available to the general public. They also use data analytics to price homes competitively, negotiate on behalf of clients and ensure legal compliance during transactions.
Regardless of their niche, successful real estate agents possess intricate knowledge of the local market, property laws and real estate contracts, making them invaluable players for your team.
What is a realtor vs. real estate agent?
Many people use the terms "Realtor" and "real estate agent" interchangeably, but they aren't the same.
Realtors are real estate agents who also hold membership with the National Association of REALTORS® (NAR). NAR members carefully follow a strict code of ethics that mandates a high standard of professionalism and integrity.
In other words, all Realtors are real estate agents, but not all real estate agents are Realtors. Choosing a Realtor may provide you with reassurance that you are working with someone committed to ethical business practices and the success of the overall industry.
What is a real estate broker vs. agent?
There is also a difference between a real estate broker and an agent. This difference, however, lies in their level of experience and additional qualifications.
A real estate broker has typically undergone more extensive training than an agent and has passed a broker's licensing exam, which covers topics like real estate law, contracts and property management in greater depth. Brokers can work independently, start their own firms and hire other agents.
Real estate agents, by contrast, must work under a licensed broker and cannot operate independently. Many brokers continue to represent clients directly (so a real estate broker could also be a real estate agent). But they have additional responsibilities, such as overseeing transactions, mentoring agents and managing the administrative functions of their brokerage.
Types of real estate agents
Different agents work across the homebuying process. These include:
- Buyer's agent: As a potential homebuyer, a residential buyer's agent represents you. The buyer's agent gets a percentage of the home's sale price, typically around 3%, for their work on the transaction.
- Listing agent: This person represents the seller and looks out for their best interests. The listing agent may also receive around 3% of the purchase price.
- Dual agent: A dual agent represents both the buyer and the seller in a single sale. This can be a conflict of interest. A dual agent may work well in some cases, such as a sale between friends or family members who have already worked out the price but want an agent to help with the process.
What is a real estate agent's job?
Now, on to what real estate agents do.
Again, agents can help with any aspect of the real estate transaction, regardless of whether you're buying or selling. From locating different properties to walking you through the contract and closing process, a real estate agent plays an important role.
Finding properties and buyers
Using tools like an MLS, your agent can help you identify and tour homes, which can be especially helpful in a hot real estate market. They can schedule showings and watch for new properties that fit your price range and have the features you're looking for. They can also give you information about the area, including shopping, schools and nearby transportation routes.
On the other hand, when working with sellers, agents aggressively market the property through digital platforms, open houses and their personal networks.
Making an offer
Knowledgeable agents can advise on the right amount to offer and ways to make your offer more attractive to the seller. This is especially important in a market where properties sell at or around their listing prices.
Handling negotiations
Your agent can also help you negotiate with the seller if issues come up. For example, if a home inspection turns up unknown problems like a water leak or a damaged roof, your agent can work to get a lower price or have repairs made before you take ownership.
They also know how to negotiate common contingencies, like inspection repairs or price adjustments if an appraisal falls short. These are sought-after skills in fast-moving markets, where buyers often compete with multiple offers.
Managing paperwork
Real estate transactions involve a mountain of paperwork, from closing disclosure statements to contracts. Agents ensure all documents comply with state and local regulations, reducing the risk of costly delays or complications. They coordinate with appraisers, inspectors and title companies for a smooth closing process.
Lending knowledge
Real estate agents stay on top of mortgage interest rate trends and home loan options, which means they can help you find the right lender for your mortgage needs.
Your real estate agent acts as a coach, advising you on next steps and helping you if you run into trouble. It can be challenging for buyers to move through the process without an agent to assist them.
Navigating the closing process
Closing a real estate deal is complicated, often involving multiple third parties like lenders, inspectors and title companies. A good agent acts as a project manager, making sure everything is completed on time so the real estate transaction can close smoothly.
How real estate agents get paid
Real estate agents may earn their income through commissions, which are usually around 5%–6% of the home's sale price. This fee is traditionally split between the buyer's and seller's agents (and their brokers).
Why work with a real estate agent?
You may be wondering, "Why should I bother working with a real estate professional if I could just do all this myself?"
As you may have gathered, the real estate profession requires careful preparation and education. In addition, enlisting the help of an agent can get you several benefits:
- Access to exclusive listings: Through the MLS, agents provide buyers exclusive access to properties that aren't readily visible online. They can also use their professional networks to learn about homes before they hit the market.
- Time-saving expertise: For buyers, an agent saves time by filtering out homes that don't fit their criteria. For sellers, agents facilitate faster sales with insightful pricing strategies and targeted marketing.
- Cost guidance: Agents help buyers avoid overpaying and advise sellers on pricing competitively to attract offers while maximizing profit.
- Stress reduction: Homebuying is a multi-step process rife with potential roadblocks. Real estate agents offer significant peace of mind, as they handle everything from inspections to closing negotiations.
How do you find the right agent?
With multiple real estate agents offering their services, it can be hard to narrow down your options and find the right person. Here are some tactics to use:
- Look to friends, family or online reviews for recommendations: Friends, family and online reviews can provide valuable insights into an agent's professionalism and success rate.
- Ask for a list of past clients from an agent you're considering: Then, contact those clients and ask about their experience with the agent.
- Verify credentials and licenses: Verify the agent's licensing and membership with professional organizations like NAR. Confirm their track record and any additional certifications that showcase their expertise in addition to their real estate license.
- Look for signs of professionalism: Good agents stand out by conducting themselves well, being on time and being available as needed.
- Ask about connections: If you're trying to find the right house in a seller's market, your agent will have to be on top of finding new properties that meet your needs. Well-connected agents find out about these properties before they're listed to give you an advantage. They'll also have connections with industry professionals who can help make your buying experience as smooth as possible.
- Interview multiple agents: You can interview the agents you're considering, but make it clear that you're searching for the right fit and are in the interviewing process. If you're talking to more than one person from the same agency, be transparent about it, especially since you may be asked to sign an agreement stating you're only working with one agent.
What can you do to work most efficiently with your agent?
Your relationship with your real estate agent is built on trust and communication. A good agent will listen to your needs, provide honest advice and keep you informed throughout the process. They act as your advocate, ensuring your interests are represented in negotiations and transactions.
As a result, you should follow a few simple guidelines to make sure that your relationship with your real estate agent runs smoothly.
Understand that agents may work on commission
If so, it means they're motivated to do a good job for you to ensure you'll buy a home and they'll get paid. If you don't buy, they don't make any money. Respect the time and effort they're putting into getting you a house.
Return calls and communications in a timely manner
Your agent will be working to get you information that may be time sensitive. Respond quickly to voicemails, emails and text messages.
Keep appointments and be on time
It may take a lot of effort for your agent to arrange a showing, especially if there's a lot of interest in the property. Respect this effort by always showing up on time to showings and other scheduled meetings.
Be ready to buy, or make sure your agent knows where you are in the process
If you're casually looking, your agent will be more than willing to suggest properties and arrange showings. But if they're expecting you to make an offer and put down earnest money, while you're just trying to figure out if you want a house or a duplex, you'll have different priorities.
Be open about when you plan to buy
Talk to your agent before you attend open houses or view properties that they haven't told you about. You want to be on the same page with your agent when you're looking at properties.
Let your agent help you with other aspects of homebuying
Outside of buying your home, real estate agents may have other connections to make your life easier. In fact, they can often recommend contractors or title companies based on their past experiences with other clients. You'll also want to consider your agent's recommendations about making offers, negotiating with the seller and other aspects of buying a home.
Ask about forms you have to sign
Your agent can explain every document, as well as walk you through the mortgage process. Take advantage of their knowledge and ask questions about the documentation you're asked to sign. If you have more advanced questions, your agent can help you find a real estate lawyer.
Maintain the relationship
Once you've closed on your home, you may find it helpful to maintain a relationship with an agent who was especially professional and went the extra mile to make your experience pleasant. That agent can assist you in other transactions, such as buying investment property, and you can help them by referring them to your friends who are looking for an agent.
When you find a real estate agent, you should also consider enlisting the help of a mortgage professional. Speak to a home lending advisor to get help with prequalifying for a mortgage and be ready to apply once you find the right home.
In summary
A real estate agent plays an important role in any real estate transaction and is much more than a liaison between buyer and seller. They are skilled negotiators, market analysts and problem solvers who can simplify an overwhelming process.
Whether you're purchasing your first home, upgrading or selling, partnering with the right agent helps ensure every facet of your real estate transaction is handled with professionalism and care.
