There is a lot to consider when selecting a real estate agent, from their experience to their demeanor to their ability to understand your dire need for a washer/dryer in your kitchen (to fold your laundry while the pasta boils, obviously).
Real estate agents are especially key for first-time buyers, who are inexperienced with the process of buying a home, but it’s a safe practice to use one with any transaction. Their duties include creating a comparative market analysis (CMA) to look at prices for properties recently sold in the area, helping you navigate the closing process and keeping you calm when the unexpected happens (as it always does).
But before you start your search, it helps to understand that there is a difference between an agent, a broker, and a Realtor, and they don’t (or in some cases, shouldn’t) all do the same thing. Not only will this help you know whom to look for, but knowledge is power, and power as a homebuyer is the ability to avoid conflicts of interest that could put your carefully-saved dollars at risk.
Here’s a simple breakdown of the various types of real estate professionals:
Brokers vs. agents
Though the terms are often used interchangeably, brokers and agents are not the same things. They are both licensed by the state to buy and sell real estate, but brokers have taken their education a step further and are allowed to hire agents to work at their firms, called brokerages. Brokerages can include big companies like Douglas Elliman and Corcoran, or the local offices named after the brokers who founded them.
In other words, brokers can operate independently, but real estate agents must work for licensed brokers who are legally responsible for them. Both are legally allowed to represent buyers and sellers, though some specialize in one or the other (we’ll explain in a bit).
Whomever you choose, they are both also legally required to give you a disclosure form called the Agency Relationships in Real Estate Transactions, which details their roles and services.
Realtor vs. real estate agent
Also contrary to popular belief, the term “Realtor” is not just a cute nickname for a real estate agent. It’s a fancy trademarked term for agents and brokers who are members of the National Association of Realtors, which holds them accountable to its own specific code of ethics.
The buyer’s agent
In a real estate transaction, a buyer’s agent represents (drumroll!) the buyer. A buyer’s agent will help you with the many moving parts in the purchase process, including finding something in your budget, presenting an offer and negotiating a price on your behalf.
And, as we said earlier, some agents and brokers work exclusively with buyers, meaning they don’t list properties or represent sellers.
The seller’s agent
Another surprise: A seller’s agent represents (you guessed it!) the seller. The seller’s agent helps determine the listing price of the home, markets it to potential buyers and works to secure the best price possible for the seller.
Some homebuyers opt-out of the entire agent-broker-Realtor trifecta and choose instead to work with a facilitator, who is more like a mediator. Rather than representing either the buyer or the seller, they help both parties work out a purchase agreement. Facilitators aren’t typically recommended for first-time or novice buyers, however, as their services aren’t normally as thorough as an agent’s.
You may have noticed a variety of mysterious letters after the names of some real estate agents. They indicate special designations or certifications that have given them extra training in some areas of expertise.
Here are the most common:
- MRP: Stands for Military Relocation Professional, helpful for veterans and active service members.
- SFR: Stands for Short Sales and Foreclosure Resource, helpful with short sales and foreclosure properties.
- GREEN: Helpful for those looking to live in eco-friendly residences.
But wait, what happens when a buyer likes a property that’s listed through the same brokerage their agent works for? This is called dual agency. The situation gets even trickier when the buyer and seller’s agent are the same person.
At the brokerage level, dual agency is quite common, and not that big of a deal. It can be hard to avoid if you’re house-shopping in a small town, or if a few agencies dominate the market.
But while some firms are so big that not all of their agents even know each other, dual agency does present the risk that your confidential information will be shared, such as the absolute top price you’re willing to pay.
A single agent representing both the buyer and the seller, however, presents so much conflict of interest that it’s illegal in some states. Many agents themselves consider it a bad practice, as it’s basically impossible for one person to advocate objectively for both parties.
Because of the potential conflicts, both types of dual agency require your written consent and the agents must swear that confidential information won’t be shared with the other party.