How to Choose Between Agents, Brokers, and Realtors
When you’re ready to begin your home search, you need someone to help you navigate your journey. Who should you choose? You have a friend who just passed the real estate exam and really wants to help. Then, there’s your uncle who’s “in the business”, but calls himself a “broker”? And you just saw an ad on YouTube touting officially licensed Realtors® as the only way to go.
Before choosing someone to represent you, it’s important to know the difference between these three types of real estate experts and how they’ll help you navigate the home buying process.
It’s All About The Training
While any of these real estate professionals can help you buy and sell property, the differences are as diverse as the titles. Ultimately, it’s the level of education required for each title that makes them unique. Let’s take a look at the training necessary to hold these specific designations that help a real estate professional distinguish themselves in their field.
Level 1 – Agent
These individuals are who people often think of when looking to buy or sell a home. Agents must be licensed in their state to offer real estate services and each state requires minimum pre-licensing training hours before taking the real estate exam.
Level 2 – Broker
Brokers are experienced agents who’ve received additional training and passed the broker’s license exam in their state. This education includes more in-depth study, including real estate investments and property management. Brokers may supervise a team of agents at a real estate firm or brokerage.
Level 3 – Realtor®
The Realtor designation is reserved for agents and brokers who are members of the National Association of Realtors® (NAR). These individuals are expected to complete additional continuing education requirements set by the state, pay dues and hold membership in their local association, and commit to following NAR’s Code of Ethics & Standards of Practice.
The Roles They Play
As a homebuyer, you’ll likely use a buyer-specific agent or broker. Along with your mortgage provider, this individual will help you navigate the homebuying process, advocating on your behalf as you deal with sellers, home inspectors, title companies, and more.
If you’re selling your home, a real estate listing agent (or broker) will advise you as you prepare your home for the market, negotiate with buyers on your behalf, and provide guidance until you complete the closing transaction.
It’s worth noting that, while many agents prefer to specialize, a single individual can serve as both a listing (or seller’s) agent/broker and a buyer’s agent/broker. This situation might arise if you intend to sell an existing home and purchase a new one within a short timeframe.
Standard Fees & Commissions
While compensation for real estate services varies and can be negotiable, you’ll find that 6% of the home’s sale price is the most common figure. Typically, the listing agent and buyer’s agent split the commission 50/50, but fees and percentages may differ by agent, brokerage, and geographic location. Traditionally, the seller pays the 6% commission, but market conditions, like a “seller’s market”, may find buyers offering to pay some or all of these costs as a way to ‘sweeten the deal’ and ensure they get the house over another potential buyer.
Which One Should I Choose?
Review your home buying goals to determine which type of real estate professional can best help you reach them. Be sure to confirm their credentials with your state’s licensing commission and check out online presence to get a feel for their standing in the community and any reviews they may have received for their service. Lastly, be sure to interview them to ensure they’re a good personality match; you may be working with them for months as you search for your perfect home.
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