Real Estate Agent A real estate agent is someone who has a professional license to help people buy, sell, or rent all sorts of housing and real estate. To get that license, states require that individuals take prelicensing training. The required number of training hours can vary significantly by jurisdiction. In Virginia, for example, real estate agents must take 60 hours of prelicensing training, but in California they need to take 135 hours. Once that training is done, aspiring agents take a written licensing exam. These exams are typically divided into two portions: one on federal real estate laws and general real estate principles, the second on state-specific laws. Once they pass their exams, they’ve earned the title of a “real estate agent” and can begin working with home buyers, sellers, and renters.
Real Estate Broker A real estate broker is someone who has taken education beyond the agent level as required by state laws and passed a broker’s license exam. Similar to real estate agent exams, each state sets its own broker education and exam requirements. The extra coursework covers topics such as ethics, contracts, taxes, and insurance—at a more in-depth level than what’s taught in a real estate agent pre-licensing course. Prospective brokers also learn about real estate legal issues and how the law applies to operating a brokerage, real estate investments, construction, and property management. As a result, “brokers have in-depth knowledge of the real estate business,” says Jennifer Baxter, associate broker at Re/Max Regency in Suwanee, GA. To sit for the broker’s exam and obtain licensure, real estate agents must already have a certain level of experience under their belt—typically, three years as a licensed real estate agent.
There are three types of real estate brokers, each with subtle differences in the role they perform:
Principal/designated broker: Each real estate office has a principal/designated broker. This person oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. Like real estate agents, principal brokers get paid on commission—taking a cut of the commissions of the sales agents they supervise (although many principal brokers receive an annual base salary).
Managing broker: This person oversees the day-to-day operation of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff. (Some principal/designated brokers also serve as managing brokers.)
Associate broker: This real estate professional—sometimes called a broker associate, broker-salesperson, or affiliate broker—has a broker's license but is working under a managing broker. This person typically is not responsible for supervising other agents.
Realtor In order to become a Realtor—a licensed agent with the ability to use that widely respected title an agent needs to be a member of the National Association of Realtors®. As a member, a person subscribes to the standards of the association and its code of ethics. “Essentially, the NAR hold us to a higher standard,” says Peggy Yee, a Realtor in Falls Church, VA. Membership in the NAR also comes with access to real estate market data and transaction management services, among other benefits.
Listing agent A listing agent is a real estate agent who represents a home seller. Listing agents help home sellers with a wide range of tasks, including pricing their home, recommending home improvements or staging, marketing their home, holding open houses, coordinating showings with home buyers, negotiating with buyers, and overseeing the home inspection process and closing procedures. Generally, listing agents don't receive a dime unless your home gets sold. If it does, the typical agent commission is 5% to 6% of the price of your home (which is typically split between the listing agent and the buyer's agent), but a listing agent’s fee can vary depending on the scope of their services and their housing market.
Buyer’s agent True to their name, buyer's agents represent home buyers and assist them through every step of the home-buying process, including finding the right home, negotiating an offer, recommending other professionals (e.g., mortgage brokers, real estate attorneys, settlement companies), and troubleshooting problems (e.g., home inspection or appraisal issues). Fortunately for home buyers, they don't need to worry about the expense of hiring a buyer's agent. Why? Because the seller usually pays the commission for both the seller's agent and the buyer's agent from the listing agent’s fee.
Rental agent In addition to helping people buy and sell homes, many real estate professionals help consumers find properties to rent. But what these agents do depends on the location—whether it's a large city or a small town—and the agent. Sometimes a rental agent will guide your search from the very start, helping you find the right neighborhood, apartment size, and price range, then go with you to open houses. More likely though, you'll already have a lot of that information decided, and the agent will send you listings that might be of interest to you. Once you've decided on a rental and have been approved by the landlord or management company, your agent should help you read and understand your lease. "Most tenants can find a place without a real estate agent, but they forget to seek out someone who can help them understand what they’re signing when they sign a lease," says Dillar Schwartz, a real estate agent in Austin, TX.
Rental agents will also represent landlords to help them find tenants—but the fee an agent will charge a landlord depends on what market they work in. In many places, the landlord pays the real estate agent to help find a desirable tenant. In more competitive rental markets, however, the tenant may be responsible for the real estate agent fee, sometimes called a "broker fee.” These fees can be as low as $50 to $75 for a credit check or application, but more common rates are one month's rent or 15% of the annual rent on the apartment.