Thinking of becoming a real estate agent but not sure what exactly he does? Well, to start with, you need to know that a real estate agent is someone who helps or assists people in purchasing and selling properties. But that’s not all a real estate agent does!
In this blog, we are going to explain what does a real estate agent do. Moreover, we will discuss how a real estate agent is different from a realtor or broker. In addition, we will explain how real estate agents get paid.
So, without further ado let’s start:
Who is a Real Estate Agent?
A real estate agent is a professional whose job is to facilitate real estate deals between buyers and sellers. To become a real estate agent in the US, you must get a real estate license by passing an exam.
Since real estate laws vary from state to state in the US, therefore, requirements to get a real estate agent license are also different in each state. However, in all US states, you need to undergo training and pass the real estate license examination to get a real estate agent license.
Moreover, in most states in the US, real estate agents are required to renew their licenses every 2 to 3 years. So, it’s not like you pass the exam once and get a license to be a real estate agent for life!
What Personality Type Makes a Good Real Estate Agent?
Individuals with ENTP personality type are meant to be real estate agents. It’s because they are usually extroverted and more focused on understanding people and problems.
Moreover, people with ENTP personality are quick thinkers as well as resourceful and strategic, and thus have a thing for solving challenges.
How Do Real Estate Agents Get Paid?
Most real estate agents in the US either work in-house or as independent contractors for licensed real estate brokerage firms. So, they mostly make money through commissions or sometimes through referral fees.
In the US, the average real estate commission is around 5% to 6% of the property price, which is then split between the brokers and agents from the buyer and seller side.
For instance, if a property is sold for an agreed 6% commission, the listing agent and broker will get a 1.5% commission each. Similarly, the buyer's real estate agent and broker will get a 1.5% commission each.
Real Estate Agent vs Realtor vs Broker
Contrary to general opinion, a real estate agent and a realtor are not exactly the same.
Claiming that a real estate agent and a realtor are the same is like saying that a surgeon and a physician are identical. While all surgeons are physicians, not every physician is a surgeon.
Similarly, all realtors are licensed real estate agents, but not every real estate agent is a realtor.
So, what’s the difference between a realtor and a real estate agent?
Well, realtors are licensed real estate agents who are members of the National Association of Realtors (NAR) which is a trade association for those who work in the real estate industry.
It’s also important to know that “Realtor” is a trademarked term and is only used to refer to those real estate agents who are members of NAR.
On the other hand, real estate agents are those professionals who deal in buying, selling, renting, and leasing of properties for their clients. However, every real estate agent has to work under a broker.
A real estate broker is more experienced than a real estate agent and also has more exposure. It’s because a real estate broker has to undergo some additional training and also needs to get a broker license which is different from a real estate agent license.
A real estate broker has the privilege to work independently as well as working with a real estate brokerage firm where he will be supervising real estate agents.
You should also know that brokers typically earn more than real estate agents as they make money from their own deals as well as receive commissions on the deals made by the real estate agents.
What Does a Real Estate Agent Do?
As we mentioned earlier, a real estate agent is someone who facilitates the buying, selling, leasing, or renting of properties for their clients.
But a real estate agent’s role is more than just facilitating or finalizing real estate deals. Here’s everything that a real estate agent does as part of his job:
Develop a Deep Understanding of the Local Housing Market
Being a real estate agent means knowing your neighborhood like the back of your hand. It's not just about knowing how much properties cost or what they look like. It's about understanding everything that makes a neighborhood tick.
As a real estate agent, you need to act like a detective. You need to know not just about the houses, but also about the schools, parks, and markets nearby. This will help you match the right home to the right buyer.
In short, you have to be a walking encyclopedia of the neighborhood. You know which streets are quiet and safe, which schools are best, and which areas are up-and-coming. This deep understanding will help you guide buyers to their perfect home and sellers to the best price for their property.
Perform Real Estate Market Analysis
Performing real estate market analysis is a big part of a real estate agent’s job. As a real estate agent, you need to gather data about the local housing market, like how many houses are being sold, what they're selling for, and how long it takes for them to sell. You also have to look at other factors like how many houses are available for sale and how many people are looking to buy.
Once you have all the information, you analyze it to understand what's happening in the market. For instance, if you notice that a lot of houses are selling quickly and for high prices, you can conclude that it's a seller's market, meaning sellers have the advantage.
On the other hand, if houses are sitting on the market for a long time and selling for less than expected, it could be a buyer's market. This kind of analysis will help you as an agent to advise your clients on when to buy or sell, and at what price.
Moreover, you need to understand that market analysis isn't just about the present, it also involves anticipating the future. By studying past trends and current circumstances, you need to make logical guesses about where the market might be headed.
Meeting with Clients & Answering Their Questions
Another part of a real estate agent's job is of course meeting with clients and answering their questions. When buying or selling a property for the first time, there can be a lot of unfamiliar terms and confusing tasks that your clients don’t have an idea about.
Your client might wonder about terms like "pending" and "contingent," or why title insurance is important. He also might feel unsure about how to fill out disclosure forms properly. That's where you need to help him as a real estate agent.
It’s part of a real estate agent’s job to patiently and clearly explain everything to his clients. In addition, he should be knowledgeable and able to answer all the questions asked by his clients.
Managing Paperwork
In some cases, managing paperwork is also a part of what a real estate agent does. Whether it’s about buying or selling a property, there's a lot of paperwork involved, like contracts and agreements.
So, as a real estate agent, you might have to prepare the contract and do the documentation. But even if you don't have to, you still have to go through every piece of paper to make sure everything is in order.
Once the parties agree to everything and sign the legal documents, the real estate agent takes over from there. He will handle submitting all the paperwork to the right places, making sure everything gets where it needs to go.
Keep an Open Line of Communication
A real estate agent should also have to act as a messenger during the process of closing deals. He is the one who talks to the other party's agent, so his client doesn't have to worry about awkward conversations or misunderstandings.
Once the client agrees on an offer, the real estate agent steps in to help with any back-and-forth negotiations. He makes sure that his client knows exactly what's happening every step of the way.
Buying or selling a house usually takes some time, and it's natural for clients to feel a bit impatient and concerned. But as an agent, you need to keep them updated, so that they know where things stand.
As an estate agent, it’s your duty to make your client feel a bit relaxed and assure him that everything is moving forward smoothly.
Offering Support
Buying or selling a house can be a rollercoaster of emotions and being a real estate agent, you need to be the personal guide for your client throughout the journey.
Not only you have to offer support to your clients, but you also have to be a cheerleader, counselor, and friend to them.
There can also be moments when your client might feel frustrated or disappointed. So, you have to be there to listen, empathize, and offer support to him during those tough times.
Moreover, you need to give honest feedback to your client and help him see the bigger picture.