Definition of the Term Real Estate Agent
A real estate agent is an individual who is licensed to negotiate and arrange real estate sales; works for a real estate broker. Negotiate and arrange can include showing property, listing property, filling in contracts, listing agreements, and purchase contracts. Real estate agents generally are licensed to operate under the supervision of a real estate broker.
To make it clear early in this article, real estate laws and agent duties and licensing are regulated by state laws. So, any information here can and likely will vary based on the state where the agent is licensed.
What Real Estate Agents Do
A real estate agent is licensed to help sellers to sell and buyers to buy real estate. Also, it is usually a requirement for property managers to be licensed in real estate as well. The vast majority of real estate agents are engaged in residential real estate listing and sales. Let's look at the two sides of a transaction and some of the duties of the real estate agent on each side:
- Listing homes for sale: When a homeowner decides they want to sell their home, the vast majority will call a real estate brokerage to work with an agent to get the home listed on the local MLS, Multiple Listing Service. This database is shared among all local brokerage members who then work to bring in a buyer for the home. In listing a home, some of a long list of duties and activities of the agent include:
- Determine the home's value in the current market for a listing price.
- Advise the homeowner in readying the home for listing and showings.
- Enter the home into the MLS database.
- Market the home to other agents and brokerage members of the MLS.
- Market the home in print, and other traditional media, as well as on the Internet.
- Supervise and/or schedule showings of the home.
- Report to the seller any interest and some feedback from buyers who see the home.
- When a buyer makes an offer, help the seller in negotiations to try and get the price they want and a signed purchase agreement.
- Coordinate the process from contract through the closing, including inspections, documents, and other items necessary to close.
For many years the "live or die by listings" saying applied. However, established dedicated buyer agents can do quite well these days. In 2008 in my vacation home market I switched to buyer agency only because I preferred working with buyers and felt that I offered more value.
- Working with Buyers: The same brokerage and agent listing a home is seldom who will deliver a buyer. The MLS allows any other brokerage and agent to bring a buyer who makes an offer to buy. So, an agent, though able to work with both sides in a transaction, is usually only working with the seller or the buyer. Let's look at some of the duties and activities of an agent working with buyers:
- Help them to locate and view homes that meet their requirements.
- Help them with securing a mortgage.
- Advise them on the area, market conditions, and if they believe that homes of interest are priced right or not.
- Work with them to craft the initial offer in a purchase agreement.
- Work with them through negotiations and counter-offers with the seller(s).
- After a purchase contract is executed, coordinate the transaction process on the buyer side.
- Coordinate/schedule appraisals, inspections, and other activities related to the transaction.
- Deliver and explain all documents, title insurance, deeds, etc.
- Work with them through the closing and getting their keys.
While real estate agents are often compared to travel agents when discussing the changes brought about by the Internet, they do add value to the transaction process. They may be less valuable in the location of homes because of the Internet, but helping buyers and sellers to get value and get through the process is a valuable service.