Everything You Need to Know About Working With Real Estate Agents
These days, more than half of buyers start their home search online, according to the 2018 Profile of Homebuyers & Sellers, released by the National Association of Realtors (NAR).
However, just because a home search starts online, it doesn’t mean that buyers aren’t looking for a little help with the process. In fact, 87% of recent home buyers purchased through a real estate agent or broker.
So, what does a real estate agent do? And what can you expect from working with one? Let’s take a look.
What Do Real Estate Agents Do?
Real estate agents go through a state-mandated process and are licensed to be involved in real estate transactions. A real estate agent can list homes for sale, help buyers navigate the process, show homes to prospective buyers, and handle the various paperwork of a real estate transaction.
Additionally, real estate agents are usually expected to market the homes they list. So, if you’re selling, expect your real estate agent to include your home in a newsletter, take attractive photos, and post it online.
Some real estate agents are Exclusive Buyer's Agents, which means that they work only on behalf of those looking to buy. That way, you know you won’t have a conflict of interest because the agent won’t be working both sides of the transaction.
How Can Real Estate Agents Help You?
When you work with a real estate agent, there are a few things you can expect:
- Help finding a lender who can get you pre-approved for buying a home
- Help finding the right home for your situation
- Connecting with professionals like home inspectors and title agents
- Negotiating an offer on your behalf (whether you’re buying or selling)
- Communicating with other players during the course of the sale
- Helping you navigate the mortgage process
- Advising you on properly pricing your home as a seller
- Marketing the property heavily on behalf of a seller
- Screening potential buyers to make sure they’re qualified
- Attending home inspections and appraisals on behalf of sellers
Real estate agents essentially represent their clients in the home buying or selling processes. Agents can’t force you to do anything you don’t want to do, however. They still have to get your approval to move forward with deals.
How Do You Find (And Hire) a Real Estate Agent?
There are plenty of ways to find a real estate agent. Here are some places to look for a real estate agent:
- Ask for recommendations: Chances are, someone you know has used a real estate agent in the past. Ask them if they can provide you with a recommendation.
- Search online: An online search of real estate agents in your area can provide a long list of real estate agents.
- Look at current listings: You can also look at local home listings, take note of the agents, and contact them.
- Attend an open house: It’s also possible to attend an open house and meet the real estate agent involved — and other real estate agents who might be at the open house.
- Check the NAR website: The National Association of Realtors offers a database of agents who are members of the NAR in your area. Members of the NAR are required to meet certain standards and agree to a code of ethics.
Once you’ve identified some qualified real estate agents, meet with them. You want to find out what their experience level is, how well they know the local market, and get a feel for how well you’d work together. It’s important to find someone you’re comfortable with since you’ll be spending a lot of time together.
In some cases, when you work with a real estate agent, whether to buy or to sell, you might be required to sign an agreement. This agreement gives the agent the ability to represent you, as well as also expresses your commitment to working with them. Not every agent requires an agreement, but some do, and you need to read through the agreement before moving forward.
If you are listing a home with a real estate agent, however, you do need to sign a listing agreement. When an agent is selling your home, an agreement is going to be part of the issue.
How Do Real Estate Agents Get Paid?
First of all, it’s important to realize that real estate agents don’t work independently of brokers. Real estate brokers have received additional licensing from the state and passed a broker exam. Brokers can work as independent agents, in addition to hiring others to work under them. When it comes to transactions, it’s the broker who actually receives the commissions.
Real estate professionals are usually paid when a transaction is closed, so if you don’t buy or sell the home, the real estate agent doesn’t get paid. In general, a broker receives the commission from the sale, and then splits it with agents involved. Listing agents and buyer’s agents usually receive a cut.
A common commission is 6%, and that would then be split between the broker, and the agents involved, depending on the agreement.
For the most part, the seller pays the commission, with the amount of the commission subtracted from the final amount received by the seller. However, a good listing agent will help a seller price a home in a way that makes up for part of the commission. So, while the buyer doesn’t officially pay for using a real estate agent, they might contribute toward the commission through the price they pay on the home.
When choosing a real estate agent, find out who will pay them, and the commission they expect to receive.
Whether buying or selling a home, a real estate agent can help you successfully navigate the process. When you find someone who’s qualified and ready to go to bat for you, it can be worth the commission you end up paying.