What exactly does a real estate agent do?

Whether you’re looking to buy a house or you’re considering selling, you might be wondering if you need to get a real estate agent. After all, real estate doesn’t seem that complicated, right? Why should you hire someone to help you find or sell a house?

According to the National Association of REALTORS® (NAR), 86% of home buyers use real estate agents or brokers, while just 92% of home sellers choose to use an agent. With numbers like that, there must be a good reason why real estate agents are the norm. Turns out, there are several.

What is a real estate agent?

A real estate agent is a licensed professional who helps buyers and sellers in real estate transactions in exchange for a commission on the sale. There are several types of real estate agents. A buyer’s agent, like the name suggests, acts as a representative of the buyer, helping them to find the right house for them and make the best investment possible. A listing agent, on the other hand, represents sellers, helping them get their home ready for market and get the best price possible.

In a few states, there are also dual agents who represent both buyer and seller, however the practice is generally frowned upon because it can create a conflict of interest. Dual agency is illegal in many states.

There are residential real estate agents and commercial real estate agents, and real estate brokers who are licensed to own or operate their own brokerage.

For our purposes, we’ll focus on buyer’s agents and listing agents. These licensed professionals facilitate the vast majority of residential home sales and earn a combined commission that generally totals 5% or 6%.

What does a real estate agent do for the buyer?

A buyer’s agent helps a client purchase a home. If that client is selling another home before buying a new one, they may function as both listing agent and buyer’s agent. But since they’re the same person working for the same client, this isn’t dual agency.

An agent can do a number of things for a buyer:

• Find potential homes: Yes, you know how to use Zillow, but agents are tied in directly to the Multiple Listing Service (MLS) and will have early notice of new listings and relationships with other agents to show you houses that may not have hit the market yet.

• View properties for you: If a great property comes on the market while you’re away and can’t make the open house, a trusted buyer’s agent can see it for you and give you the lowdown.
• Communicate with listing agents: If you have questions about a home, your agent can run them by the listing agent to get more direct answers. They can also set up in-person showings and handle any requests from the seller side.
• Offer referrals: You’ll make plenty of new friends during a home sale, from your agent to an attorney to a home inspector to mortgage lenders. Your agent has worked with many people and can give you quality referrals.
• Generate and submit offers: When you find a home you love, your agent will craft a bid and submit a formal offer on your behalf. They’ll work with you to craft an offer you’re comfortable with, build in contingencies you want, and negotiate the back and forth.
• Help with mortgage approval: If you authorize them to do so, your real estate agent can file the information needed to get approved for a mortgage.

Related: Here are the pros and cons of buying a home without an agent

What does a real estate agent do for the seller?

If you’re ready to sell your home, you’ll use a listing agent rather than a buyer’s agent. (Although the listing agent can also function as the agent who represents you as a buyer, too, if you’re also looking for a new home.)

Listing agents and buyer’s agents have a number of similar duties, but there are a few specific things a listing agent does for sellers.

• Help price your home: An agent has experience selling homes and has access to comparative market analysis (CMA). They’ll analyze your home, figure out the condition, recommend certain upgrades or maintenance, and determine the right price to list your home.
• Provide presale suggestions: There are a number of little things you can do to improve the eventual sale price. From fixing things that will be flagged on a home inspection to simple decluttering, a seller’s agent can help you find little tasks that can make a big difference.
• Market your home: A good listing agent will take professional real estate photos of your home, write up a strong listing for the MLS, set up open houses, and advertise your home to find the right buyers in your area.
• Vet buyers and guide you through offers: Not every offer is a good one. Some buyers are a little too good to be true, some might be stretching too far, and a good listing agent can help you parse great offers from subpar or even fake ones. Likewise, if you have multiple offers, listing agents can explore buyer financials, preapprovals, and the various contingencies of each offer to help you pick the right one for you.
• Negotiate: Of course, one of the best things a listing agent does is negotiate on your behalf if you want to get a slightly better offer.

Do I need a real estate agent?

Legally, or officially, no, you don’t need a real estate agent for either side of the transaction. However, most people use them because they make life a lot easier. And in the grand scheme of a home sale, 5% to 6% isn’t an excessive price to pay for their help.

Real estate agents have deep knowledge of the areas they represent, from the property values to schools and neighborhoods. They also understand the process, which can be incredibly valuable for first-time home buyers or sellers. They’ll guide you through it all, taking a number of items off your plate (including communication) and answer any questions that arise.

Perhaps most importantly, they’ll take care of the paperwork or help you find the right people to do so. Messing up real estate paperwork can be an enormous headache and may even jeopardize a sale. You don’t want to accidentally go down that road.

So, no, you don’t need an agent, but it is a really good idea to have one.

FAQs

Here are more details about what real estate agents do.

How do you find an agent?

There are a lot of real estate agents out there. How do you find the right one for you? No matter whether you’re buying or selling a home, a good place to start is by asking friends or family for referrals. If you consider someone a good judge of character, they’d probably make a good real estate agent choice for themselves. Gather a few recommendations, review resumes, conduct a few interviews, and figure out who makes sense for you. (Here’s a complete guide to finding a real estate agent.)

If you’re looking to buy a home, you can just start clicking on MLS sites like Zillow or Redfin to get matched to an agent but you’re under no obligation to use them.

What are some tips for interviewing a potential agent?

You’ll work closely with this person during your home search or sale, and a really good agent is someone you may like to use for all of your real estate needs throughout your life. So, when interviewing a potential agent, make sure to ask the basic questions about their license and how long they’ve worked in the area, but pay attention to how you get along with them.

The right real estate agent for you is someone with experience who you genuinely enjoy speaking to. They’re probably going to give you some bad news at some point, and you may have some frustrations throughout the process — you want to go through it with someone who you trust and actually like.

→ Here’s what questions to ask the realtor when selling

Can I buy or sell a property without a real estate agent?

Yes, you can buy or sell property without a real estate agent. However, it’s not advisable from a logistical standpoint (as we covered before) or a financial one.

For sale by owner (FSBO) properties bring in considerably less money than properties sold by agents. The NAR’s 2020 Profile of Home Buyers and Sellers found that FSBO homes sold for 26% less than ones represented by an agent. While those people didn’t have to pay 6% in agent commission, they lost a lot more than that in the sale.