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Whether you’re buying or selling a home, you may be wondering what a Realtor® does. Although the terms “Realtor” and “real estate agent” are often used interchangeably, there’s a difference between the two. Unlike the generic term “real estate agent,” Realtor refers to agents who are members of the National Association of Realtors.
This guide will go over the distinction as well as how real estate agents and Realtors work and get paid, so you can make an informed decision about whether to hire one.
Realtors vs. real estate agents
A real estate agent and a Realtor are both agents who are licensed to buy and sell real estate. The key difference is that a Realtor is also a member of the National Association of Realtors®, or NAR, which holds its members to a strict code of ethics.
All agents must work for a licensed broker, regardless of whether they’re a a member of the NAR.
Should you hire a real estate agent?
A real estate agent isn’t required by law, so you don’t have to hire one. If you’re a buyer, you may choose to work directly with the listing agent instead of hiring a real estate professional. If you’re considering taking this route when purchasing a home, keep in mind that the listing agent may be looking out for the seller’s interest.
Since real estate transactions can be stressful and complex, hiring a real estate agent to represent you is usually a good idea. It doesn’t cost anything to work with a real estate agent or a registered Realtor, and they have valuable knowledge of the real estate market.
As a seller, it can be a huge amount of work to complete the home sale transaction without a Realtor or real estate agent, so this approach isn’t recommended.
With Credible, you can search a nationwide network of more than 90,000 real estate agents.
Single vs. dual agency
When buying or selling a home, find out whether the real estate agent you’re working with has single or dual agency. If a real estate agent has single agency, they only work with you, and not the other party involved in the same real estate transaction.
On the other hand, if the real estate agent has dual agency, they work for both the buyer and the seller. In this situation, there could be a conflict of interest. For example, if you want to negotiate the sales price of a home as a buyer with a real estate agent who also represents the seller, it may be hard for the agent to accommodate both of your interests.
So, how do you avoid this scenario? If your real estate agent is a Realtor, they’re required to disclose whether they’re a dual agent upfront, and you and any other person involved in the home sales transaction must agree to it, according to NAR’s code of ethics.
Real estate agents work on commission
Real estate agents, including Realtors, normally work on a commission-only basis, which means they only get paid when the sales transaction of a home is successfully closed. Because of their out-of-pocket expenses, agents can actually lose money if they don’t make a sale. Since most of them are independent contractors, they don’t have salaries, bonuses, or employee benefits.
When a home is sold, the seller usually pays the commission, not the buyer. Real estate commissions are a percentage of the sales amount, usually around 6%. The amount of money the Realtor or real estate agent pockets is based on the agreement they have with their brokerage firm.
Check out Credible to search for a real estate agent and get a personalized recommendation.
What real estate agents do for buyers
A real estate agent who works with a homebuyer is also known as a buyer’s agent. Here are some of the duties they perform.
- Ask for a pre-approval letter. During the pre-approval process, a mortgage lender reviews your credit history, credit score, and finances to see if you can afford a mortgage. If you’re pre-approved, you’ll receive a letter with an estimate of how much you can borrow. A real estate agent will likely ask for it before agreeing to work with you, since it shows you’re a serious buyer.
- Search the Multiple Listing Service (MLS). Once an agent knows what homes are in your price range, they can search the MLS database to help you find one that fits your needs.
- Schedule home viewings. If you want to see a particular home in person or remotely, your real estate agent can schedule a time for you to view the property.
- Negotiate the sales price. The purchase price of your dream home isn’t set in stone; a real estate agent can help you negotiate it.
- Help with inspection and the final walkthrough. If you need help identifying what repairs need to be made, a real estate agent can spot issues that need to be addressed. They’ll also walk with you during the final home inspection before you close on the home to see if it’s ready for you to move in.
What real estate agents do for sellers
When a real estate agent works with a seller, they’re referred to as a seller’s agent, and they perform different duties.
- Evaluate the property. Before you put your home on the market, an agent will help you identify potential issues. They’ll also help you determine how much it’s worth based on comparable houses in your neighborhood.
- Prepare a listing presentation. Once your house is ready to be put on the market, the real estate agent is responsible for taking pictures of the home, making sure it’s listed in the MLS database, and advertising it on their website or social media channels.
- Track offers. Whenever you receive offers on your home, a real estate agent keeps track of them.
- Organize paperwork. Throughout the process, a real estate agent will help you gather important documents, such as your tax records, deed, title, and sales contract.
- Approve home viewings. If a potential buyer wants to view your home, the agent will communicate this with you before scheduling an appointment. Additionally, they may set up an open house to show off your home.
Credible’s free search tool can help you connect with a real estate agent in your area.
Whether you’re buying or selling a home, hiring a Realtor or other real estate agent can help ensure your real estate transaction goes as smoothly as possible. If you decide hiring one is right for you, interview multiple agents to find one that best fits your needs.
About the author: Jerry Brown is a personal finance writer, owner of the Peerless Money Mentor blog, and a contributor to Credible. He has written for major publications such as Forbes Advisor, Business Insider, and Rocket Mortgage.
