What is a salesperson in real estate

K. Kinsella

Last Modified Date: October 17, 2022

A real estate sales representative brokers deals involving residential and commercial real estate. During sales, he or she may represent the interests of either the buyer or seller and in some instances, the same representative may work with both parties involved in the transaction. Few colleges offer degree programs designed to prepare people to work in these roles, although regulatory boards in many nations operate short-term vocational training classes.

When a property owner decides to place a home or commercial site on the market, a real estate sales representative may be asked to assist with the sale process. In such instances, the representative may advise the property owner of a suitable asking price before placing advertisements for the building on real estate web sites and in local journals and newspapers. Some of these individuals also market properties in their own offices in which case fact sheets containing pictures, room descriptions and amenities may be prominently displayed. Typically, prospective buyers are required to submit bids to the real estate sales representative who then liaises with the property owner before accepting or declining these offers.

Real estate sales representatives are trained to do all of the paperwork required to sell property.

In many instances, buyers wish to visit properties before finalizing bids and the real estate sales representative has the responsibility for taking people on tours of the listed buildings and land parcels. An individual who is representing the buyer will attempt to draw attention to the most attractive features of a building to drive up the sale price. Laws in most countries prohibit a seller's agent from concealing vital information that could impact the buyer's willingness to submit a bid. Additionally, rules in many areas are designed to prevent these representatives from making false or misleading statements in order to generate sales.

Real estate representatives meet with both the sellers and the buyers to complete paperwork and make the sale official.

Buyer's agents are real estate sales representatives who try to negotiate down home prices on behalf of prospective buyers. These individuals may take their clients on tours of various properties and submit bids on their client's behalf. While a single person can represent both parties in a sale transaction, many people prefer to use two agents to avoid situations involving real or perceived conflicts of interest.

Real estate sales representatives create ads for properties being sold for printing in local newspapers.

In many areas, real estate sales agents have to attend a series of training classes that culminate in a licensing examination. People must pass the exam before starting work in the real estate business. Thereafter, representatives normally receive their pay in the form of sales based commissions although some of the professionals also charge a retainer fee that is intended to cover their day-to-day costs during the negotiation process.

What Is a Real Estate Agent?

A real estate agent is a licensed professional who arranges real estate transactions, putting buyers and sellers together and acting as their representative in negotiations. Real estate agents usually are compensated completely by a commission—a percentage of the property’s purchase price—so their income depends on their ability to close a deal. In almost every state a real estate agent must work for or be affiliated with a real estate broker (an individual or a brokerage firm), who is more experienced and licensed to a higher degree.

6 Steps to Become a Real Estate Agent

Key Takeaways

• A real estate agent is a licensed professional who represents buyers or sellers in real estate transactions.
• A real estate agent usually works on commission, being paid a percentage of the property’s sale price.
• In most states a real estate agent must work through a real estate broker, firm, or fellow professional with more experience and a specialized license.

How a Real Estate Agent Works

Real estate agents usually specialize in either commercial or residential real estate. Either way, they perform different duties, depending on whether they work for the buyer or the seller. Agents who work for the seller, also known as listing agents, advise clients on how to price the property and prepare it for a sale, including providing tips on last-minute improvements that can boost the price or encourage speedy offers. Seller agents market the property through listing services, networking, and advertisements.

Agents who work for the buyer search for available properties that match the buyer’s price range and wish list. These agents often look at past sales data on comparable properties to help prospective buyers come up with a fair bid.

Agents act as go-betweens for the principal parties, carrying offers and counteroffers and other questions back and forth. Once a bid is accepted, agents on both sides often continue to work, helping their clients through the paperwork, conveying communications, advising on inspections and moving, and generally shepherding the deal through to closing.

It’s important for consumers to understand whether a real estate agent represents the buyer, the seller, or both parties; obviously, the agent’s loyalty can greatly affect several details of the transaction, including the final price. State laws regulate whether an agent can represent both parties in a real estate transaction, technically known as “dual agency.” Agents must disclose their representation, so that buyers and sellers are aware of any conflicts of interest.

Dual agency, in which one person represents both the buyer and seller in a real estate transaction, is illegal in eight states: Alaska, Colorado, Florida, Kansas, Maryland, Oklahoma, Texas, and Vermont.

Real Estate Agents’ Compensation

Traditionally, an agent is paid a commission that is a percentage of the property’s sale price. The more the house sells for, the more money an agent makes. However, with online listings allowing consumers to do much of the shopping on their own without help from an agent, the traditional payment structure is changing.

Some brokerages charge a lower commission for more expensive houses, and some handle the entire transaction for a flat fee that’s much less than a regular commission. Other companies offer a fee-for-service pricing structure that lets sellers pay only for certain parts of the sale process, such as adding the property to a multiple listing service (MLS).

You may have heard people use the terms “real estate agent,” “real estate broker,” and “realtor” interchangeably. While overlap among the three definitely exists, there are key differences.

Real Estate Agent vs. Real Estate Broker

The exact definitions of and distinctions between a real estate agent and a real estate broker vary among states. Generally, however, anyone who earns a basic real estate license (which involves taking a certain number of accredited courses and passing an exam) can be called a real estate agent. A real estate agent is essentially a salesperson, qualified to help consumers buy or sell a property.

A real estate broker is a step up the professional food chain. Brokers have additional training and education that have qualified them to pass a higher licensing exam; most states also require them to have a certain amount of recent experience as an active real estate agent. Brokers handle the technical aspects of the real estate transaction. A client signs a contract with a brokerage, not the individual agent. In many states brokers' additional certification authorizes them to handle other legal and financial aspects of a deal, such as handling the earnest money deposit and establishing the escrow account.

Brokers typically own a firm or a franchise. They can be solo practitioners, but they must attain another higher-level license if they want to hire agents or other brokers to work under them. As mentioned earlier, a real estate agent usually cannot work alone but instead must operate through a real estate broker; the exception is in states such as Colorado and New Mexico, which mandate that every real estate professional be licensed as a broker. Usually, though, agents work for brokers and split commissions with them.

Real Estate Agent vs. Realtor

So every real estate broker is a real estate agent (or has been), but not every real estate agent is a broker. How do realtors fit into the equation?

A realtor is a member of the National Association of Realtors (NAR), a trade association. Both agents and brokers can be realtors, along with property managers, appraisers, and other real estate industry professionals. Realtors are expected to be experts in their field and must follow the NAR’s code of ethics, which requires agents to uphold specific duties to clients and customers, the public, and other realtors. In addition to NAR, realtors must belong to a state or local real estate association or board.

All realtors are real estate agents or brokers (or something related), but not all agents or brokers are realtors. As of July 2020, NAR reported that it had nearly 1.4 million members. Roughly two-thirds of them held real estate agent licenses.

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