If you’ve made the decision to buy a home—or sell the one you have—you also may be thinking about hiring someone to help things go as smoothly as possible.
A real estate professional can assist in assessing how much to list or bid on a home for, help with negotiations, hold your hand while you make important decisions, and help you understand the complicated paperwork.
The right agent can help you buy your dream home or sell the home you have now. The wrong agent might not focus on your needs or price your house incorrectly, leaving you angry or disappointed.
But how can you know who to hire when the pros often have different job experience or expertise and go by different job titles? Are all real estate agents also REALTORS? Is that the same thing as a sales associate? What’s the difference between a buyer’s agent and a listing agent? And what does a real estate broker do?
What’s in a Name?
Though REALTOR and real estate agent are often used interchangeably, there are some important differences. Here’s a breakdown of the various titles real estate professionals use and what they mean:
Real estate agent: This is the most common term used for professionals who help clients buy and sell real estate. (Some firms may call their real estate agents “sales associates” or “salespeople.”) But a person can’t just slap their name on a business card and start selling homes.
A real estate agent must have a professional license to help residential or commercial clients buy, sell, or rent a home or some other type of real estate. And to get that license, aspiring agents must take the required hours of pre-licensing training and any written exams mandated by their state. There are also continuing education requirements for license renewal. States also have different age, education, and residency requirements, and some jurisdictions also require a background check.
REALTOR: There’s a reason you may see REALTOR capitalized in print: The term is trademarked by the National Association of REALTORS (NAR) , the largest trade organization in the U.S., and it should be used only to refer to that organization’s dues-paying members.
Members of the NAR are licensed professionals who expect to be held to a higher standard of practice, and they have their own strict code of ethics which is made up of 17 articles, meant to protect clients, the public, and other real estate agents. According to the NAR, 65% of its members are licensed sales agents, 21% hold a broker license, and 15% hold a broker associate license.
If you’re looking at hiring a REALTOR vs. an agent, one of the big perks of NAR membership is access to additional research, market data, and transaction management services.
Broker: Brokers are professionals who take their real estate education and licensing to the next level—and they often manage other agents. (Think of it like a school principal who still may teach, but also has management responsibilities.)
Because of this elevated role, a broker’s pre-licensing coursework usually dives deeper into complicated topics such as contracts, taxes, insurance, and other legal issues.
Real estate brokers can work as independent agents or have other agents working for them—and they typically receive a percentage of their agents’ commissions as payment for overseeing their transactions. Agents who pass the broker exam but choose to work under another broker may be referred to as associate brokers.
Listing agent: Some agents prefer to work only with sellers. Others work only with buyers. But many agents do both. Real estate agents or REALTORS who represent home sellers are called “listing agents.”
And in that capacity, their duties may include pricing the home, suggesting improvements, marketing and holding open houses, coordinating showings with other agents, recommending renovations or offering staging tips, and negotiating with potential buyers.
Buyer’s agent: Agents who represent homebuyers are called “buyer’s agents,” and it’s their job to help their clients find potential homes to tour and show those homes, offer references for other professionals that may be needed (inspectors, mortgage brokers, etc.), negotiate deals, and help their clients through the closing. Listing agents and buyer’s agents typically split a 4% to 7% commission on a home’s sale price—and that money is typically paid by the seller from the sale proceeds of the home.
Looking Beyond the Job Title
Besides understanding the credentials, duties, and level of education each real estate professional involved in your home sale or purchase may have, here are some other factors to consider:
• Do you want to work with a team or an individual? With a team, you’ll have multiple agents looking out for you—and there might always be somebody to sub in if your agent is unavailable for a showing or to answer a question. With an individual agent, you’ll have just one person to go to for all your needs, but you’ll get to know that agent, and they’ll get to know you. That personalized approach might be helpful during what could be a stressful process.
• How much experience does your potential agent/REALTOR have? Not that there’s anything wrong with a sharp, gung-ho newbie, but given that your home purchase may be the biggest financial transaction of your life, it’s important to get it right. A seasoned agent can draw from past experiences when negotiating and problem-solving. You also may want to ask if the agent considers real estate to be a full- or part-time job. If this is a major purchase for you, you may want to know that you have the person’s full focus.
• How familiar is the agent/REALTOR with your current neighborhood (if you’re selling) and desired neighborhood (if you’re buying)? Knowledge of the area can be a plus when you’re looking at “comps” or “comparables” to determine the fair value of a home. Your agent should also be able to help if you need information about schools or crime or if you want to know how long it’s really going to take you to commute from your home to your office downtown. Of course, anyone can look up this information, but an agent’s insider knowledge (school zones that might slow you down? speed traps?) may give you an edge in decision-making.
• Where did you hear about the professional you’re considering? The agent with the biggest advertising budget may or may not be the right person for you. If you have family and friends in the area, they might be able to help with recommendations. (Don’t just ask who they used—ask if they’d use that person again.) It also might help your comfort level to speak with your top prospects in person, to get questions answered and to be sure communication is easy.
Finding a qualified, experienced real estate professional to work with is considered by some to be a major step in the home buying or selling process. The right person could help you with everything from figuring out how much house you may be able to qualify for, to getting you into the home you want with as little financial and emotional pain as possible.
Once you’ve found that person, you may want to look for a lender, as well—and a SoFi mortgage loan could be a good place to start. Applying for a loan with SoFi is easy—choose the loan option that best fits your needs with no hidden fees, and a quick online prequalification process.
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