What does a real estate agent do? Here’s why and how they’re an invaluable asset for today’s homebuyer. —-
After some time, you’ve finally decided you’re ready to buy your first home (congratulations, that’s a big step!). And, in today’s information age, you’re sure you can handle the process yourself. You may wonder, what does a real estate agent even do? After all, there are dozens of websites with home listings and steps on how to navigate the transaction process.
That may be true, but the process is far more complicated than that. According to the National Association of Realtors®, 88% of homebuyers purchased their home in 2020 through a real estate agent, and for good reason. Real estate agents are essential advocates through the homebuying process. They’re there to help find the perfect house, act as a liaison for the different parties you’ll interact with, and go to bat for you throughout the transaction process. Without that added support, you could end up missing out on the right home, get slowed down by paperwork, or even cost yourself a good chunk of money.
Still undecided? We’ve talked with veteran real estate professionals and learned the ins and outs of the role agents play for buyers. We constructed the go-to guide on what a real estate agent actually is and how he or she can help your homebuying experience.
What is a real estate agent?
Let’s start with the basics. Real estate agents are licensed professionals that assist buyers (or sellers) during the transaction process. They are who you’ll count on most to help you find the right home, negotiate the offer, and walk you through every step of the experience. For the sellers, they help decide the list pricing, get the listing on the MLS database, and market the house to potential buyers.
Where things may get confusing is with the different types of agents. Is a broker the same as an agent? Are all agents Realtors®? Here’s what you need to know.
The general ‘real estate agent’
When you hear the term “real estate agent,” that refers to what we mentioned above — a licensed professional involved in the transaction process. That means the real estate agent can represent a buyer, seller, or, in some cases, both simultaneously (that’s called dual agency, and it’s actually illegal in eight states).
The requirements to become a licensed agent varies by state. Typically you must meet an age requirement, take a certain amount of pre-license education, and pass a real estate exam that includes federal- and state-specific questions. For example, Texas has some of the most stringent requirements, asking for at least 180 hours of coursework before taking the exam. Vermont, on the other hand, requires just 40 hours.
The real estate broker
The real estate broker is a type of agent that has taken additional coursework and passed a separate broker exam. After receiving a broker license, these agents can work independently and even start their own brokerage firm instead of working under someone else.
Similar to real estate agents, the requirements to become a broker varies state by state. Typically, you need to have a few years of experience as a licensed agent in that state, complete more educational hours, and pass another exam. If you see the term “associate broker,” that is a broker who works under another broker or brokerage firm.
If you’ve heard the term “Realtor®” and assumed it applied broadly to real estate agents as a whole, you’re not alone. However, a Realtor® is a licensed real estate agent that is also a member of the National Association of Realtors® (NAR). Agents who hold this trademarked title must abide by the organization’s Code of Ethics, first adopted in 1913.
It might seem like a label that doesn’t mean much; however, the Code of Ethics is a well-respected rulebook for agents. It’s a 17-article governing set of rules that lays out Realtor® duties for their clients, the public, and other real estate professionals. Of the estimated 2 million active real estate agents in the U.S., there are over 1.4 million Realtors®.
There are also separate designations and certifications that allow agents to work with specific buyers (or sellers) or work toward a particular real estate need, similar to how doctors and lawyers have different classifications.
Many designations are affiliated with the NAR, and an agent must complete coursework and sometimes an exam to receive the title. Some common designations helpful for buyer agents are:
- Accredited Buyer’s Representative (ABR) – Agents with a focus on buyers. They have an in-depth knowledge of the home buying experience.
- Certified Residential Specialist (CRS) – Agents trained and knowledgeable in residential sales and how to get the most out of a home purchase.
- Seniors Real Estate Specialists (SRES) – Agents specialized in how to best serve the needs of buyers and sellers over 50 years old.
- National Association of Exclusive Buyer Agents (NAEBA) – This organization isn’t affiliated with the NAR and is an entirely different professional association. Members work exclusively with buyers and work to ensure the transaction process is fair and ethical for them. You may choose to work with a NAEBA agent if you’re worried about conflicts of interest or want an agent more focused on buyer-specific needs.
What will a real estate agent do for me?
Now that you know the basics, you may be wondering how a real estate agent can really benefit your home buying experience. Here’s how they’ll help during every step of the process.
Your agent will find the perfect house
For many homebuyers, the biggest perk of a real estate agent is helping to find your next home. In fact, a little over half of homebuyers in 2020 considered an agent’s support in the home search as their most significant considering factor when choosing an agent.
Real estate agents are deeply embedded in their community and know all about the local housing market. They continually follow trends in the area, understand each neighborhood, and hold access to the MLS database, which is vital in finding specifics on newly available homes. Most importantly, though, they understand each client’s specific needs and can leverage their network to find the perfect house, says Charli Lynn, a Boca Raton real estate agent with the Lynn Realty Group, who, alongside her husband, has over 32 years of experience.
Lynn says, nowadays, many agents work together to help both buyers and sellers. Your real estate agent may learn about a house becoming available and get you in to see it before others. Or your agent may receive details about the market in a specific neighborhood you wouldn’t be able to find on your own.
“[These] are things [a buyer] would never know by just searching and making the phone call themselves,” says Lynn.
Once you find a few homes you’re interested in, your agent will coordinate showings and act as a second set of eyes on the property. They’ll make sure you don’t miss anything, such as signs of damage or pests, and make sure listing agents answer all your questions. They will also work with the sellers to get all appropriate documentation, such as disclosures or inspection reports — things you might not have known existed.
Your agent will present a strong offer
You’ve found the perfect house, and now it’s time to move on it. Here’s where a trusted real estate agent can save you time and make sure you don’t miss out on your dream home.
Before agents write an offer, they will research comparable sales in the area, otherwise known as “comps,” to make sure the listing price is fair and to give you a better idea of a good offer. The best way to set yourself up for success in this stage is to ensure the agent has all relevant information from both you and the listing agent. That includes your maximum offer price, anywhere you can be flexible, and if there’s any competition on the house.
Once you’re ready to make an offer, your agent will make sure it’s as strong as can be. They will instruct you on every necessary document, so you don’t waste any time, and they will set the timeline for the entire process. They may also recommend an escalation clause if there might be a bidding war.
If the sellers come back with a counteroffer, the agent will be your best advocate, negotiating on your behalf to find a reasonable purchase price.
Your agent will walk you through the transaction
When the offer is accepted and a closing date is set, your agent becomes a traffic cop of sorts. They help coordinate your home inspection and act as a liaison with the listing agent for any problems in the report. They’re now your best advocate again, making sure the sellers fix any issues — or at least compensate you fairly for them.
While agents aren’t loan originators, they may introduce you to one and help you keep track of how your mortgage loan application is progressing. The financing process can be very confusing and often burdensome. Your real estate agent will be invaluable in answering your questions and making sure you’re treated fairly. They will also educate you on your home insurance, which you’ll need to secure your loan, and point you in the right direction to find the best policy.
Depending on your state or lender, you may also require a real estate attorney. Your agent will recommend a few in their network and make sure you understand what their role is. That includes walking you through the purchase and sale agreement and other legal issues that arise.
Finally, your agent will make sure you are sticking to the timeline they set when creating your offer. Their priority during this stage is to make sure all parties meet their deadlines, so you can hit your closing date and move into your home as soon as possible.
Your agent will be next to you at the closing table
Within 24 hours of your closing, your agent arranges the final walkthrough of your new home. This is just to make sure the property is clean, there’s no new damage, and any repairs you and the seller agreed upon are completed.
On the day of the closing, your agent will be there for moral support and to answer any questions. The attorney working the closing will most likely explain everything you’re signing, but if not, your agent should have the answers.
Your agent will always be your biggest advocate
We know we mentioned this already, but it’s worth saying again: Your real estate agent will be your biggest advocate throughout this process. If any surprises or issues appear, your agent will break down all your options and then go to bat for you in fixing them. If you want to walk away, your agent will explain what that means for your earnest money and how to best go about it. If you’re simply overwhelmed, your agent will answer your questions and help put your mind at ease.
Plus, a lot of the time, they’re a personified version of Yelp. They can recommend specialty inspectors, contractors, movers, or even restaurants in your new neighborhood!
What if I don’t have an agent?
In short, you’ll have to do everything mentioned above by yourself. But here are some specifics.
You may miss out on the right home
There are plenty of websites showing home listings nowadays, but Lynn says they aren’t always accurate. Real estate agents have access to their own network of contacts and the MLS database, which has updated listings. That means an agent can tell you if a home is already under contract and save you valuable time in the home search. They can also find you homes you wouldn’t be able to find yourself, and can get you in early to beat the competition.
You’ll have to do all the legwork
There is a lot of paperwork involved in a home transaction, but that’s not even the worst of it. Without a real estate agent, you’ll have to coordinate your showings, reach out to listing agents, write your own offers, find recommendations for inspectors and lenders, and negotiate on your own.
If you have a real estate background, that might not seem too difficult. But if you don’t, you might miss specific details or let items fall through the cracks.
You could lose money
If all your I’s aren’t dotted and T’s crossed, that might mean lost money down the road. Maybe you didn’t include an inspection contingency and you need to walk away after the home inspection. That could mean you lose your earnest money. Perhaps you fell behind on the timeline, and the seller had a “time of essence” clause in the contract. Again, you could lose your earnest money. Or maybe there’s an issue with your loan application and financing falls through. Depending on your contract, that could mean the loss of your down payment.
These may be extreme examples, but a real estate agent is there to make sure everything is accounted for and your money is safe.
How to find an agent
Not only is it essential to have a real estate agent, but it’s also important to find the right one. That itself can be a daunting and challenging process.
The best place to start is to figure out what’s important to you in an agent and what your expectations are. Then it’s worth it to take your time and research all of your options. Drive around your community to find well-marketed agents, get recommendations from family/ friends, or use online resources. Leveraging a reputable agent-matching tool lets you review the top buyer agents in your area based on your specific needs. Also, don’t be afraid to look up your potential agent to make sure they’re licensed.
Finally, it’s important to ask potential agents questions and get a feel for what they are like to work with. Outside of background and experience, personality should be a driving factor.
“I think it’s super important to have that conversation [with the agent] so that if you don’t feel the click right away, move on and interview somebody else,” says Lynn.
After all, this is someone you will hopefully have a long-term relationship with. According to the NAR, 91% of recent buyers said they would use their agent again or recommend them to someone else.
Once you find your trusted agent, you’re on your way to finding the perfect house. And since you now better understand their role, agents should make the process a little more straightforward and less nerve-wracking.
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