Real estate is a complex industry. Professional realtors wear many hats in the course of their day. But how do we define the role of the realtor, specifically their core job duties? With over 3 million licensed agents operating in the United States, a single definition is tricky. Let’s explore the different types of real estate agents, what each type of agent does, and what separates them from each other.
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The difference between a real estate agent and a realtor
Before we look at the different types of real estate agents, let’s clarify some definitions and trends.
Internet real estate companies like Redfin and Zillow have fundamentally changed how different types of real estate agents operate. With many self-service tools now available to the public, successful agents have come to provide customers with local expertise, an awareness of the current market, and superior negotiation skills. They should have an understanding of the legalities and paperwork necessary to complete transactions and be continually available to guide customers through the process.
You may hear people use the terms “real estate agent” and “realtor” interchangeably. That’s ok for casual discussion, but there are some minor differences that all real estate professionals should be aware of. Each has a similar workload that includes compiling available property lists, showing homes, and being a general expert concerning the local market.
A real estate agent is a licensed individual with the knowledge and expertise necessary to help carry out real estate transactions for their clients. A realtor is simply a real estate agent who maintains active membership in the NAR (National Association of Realtors). With more than 1.6 million members, the NAR holds its members to a higher standard of ethics in return for increased professional prestige.
The bottom line? A realtor is an agent who’s taken the time and effort to obtain extra accreditation. But what exactly is the role of a real estate agent?
The four types of real estate agents
Clients view real estate agents as experts in their field, and real estate agents should strive to become market experts within their chosen niche. According to NAR, 86% of clients purchased their home using an agent, and 88% of all licensed agents surveyed held a college degree. NAR also found that of clients who worked with a real estate agent, 89% said they would recommend that agent to a friend.
Essentially, you can break down the real estate industry into four types of real estate agents.
- A real estate broker
- The buyer’s agent
- The seller’s agent
- Dual agents
Let’s dive into the defining traits of each.
Real estate broker
What is a real estate broker, and how do their responsibilities differ from normal real estate agents?
Long story short, a real estate broker is a more accredited, management-level professional who oversees a team of agents—while also acting as an agent themselves. Many states require all agents to be licensed, and the broker represents a higher level of licensing. Think of the broker as a manager: they have the additional ability to hire and oversee a team of real estate agents.
Like any agent, brokers can work on both the buyer’s and seller’s behalf—and they must make some sales each year in addition to their management duties.
Other duties include:
- Preparing the seller’s home for listing
- Showing properties to prospective buyers
- Negotiating on behalf of the buyer or seller
- Providing all necessary paperwork and legal disclosures
- Offering support and advice throughout the closing process
The buyer’s agent
Unlike a broker or a general agent, the buyer’s agent only represents the buyers’ interests when purchasing a property. Their job is to advocate for the buyer, rather than acting as an all-around agent who’s also involved with the sales process. The buyer’s agent is responsible for a wide range of duties, including:
- Creating a list of potential properties based on buyer preference
- Acting as a local market expert
- Arranging property walkthroughs
- Assisting with negotiations and offers
What makes a buyer’s agent unique is the fact that their professional scope is limited compared to a dual agent, which helps limit conflicts of interest during complex transactions.
The seller’s agent
On the other side, we have the seller’s agent. You may also hear them referred to as a listing agent. Just like the buyer’s agent, it is up to the seller’s agent to advocate directly for the seller during real estate transactions.
The seller’s agent provides an in-depth understanding of local markets in order to help your client accurately price their property. They also help the seller optimize their home for walkthroughs, tours, and open house events. It’s up to the seller’s agent to sell the house for their client.
The dual agent
The last classification is the dual agent. The role encompasses the responsibilities of both a buyer’s and seller’s agent. A dual agent specializes in handling complex, multiple-step real estate transactions where a single client is both selling an old property and buying a new one. The dual agent serves as a single point of contact throughout the entire process.
Dual agent vs. designated agent
You’ll sometimes hear dual agents referred to as designated agents. While the two roles are similar, they aren’t actually the same. A dual agent represents both sides of the real estate spectrum. A designated agent, on the other hand, is chosen by a broker to represent a particular client in a transaction where the brokerage is representing both the buyer and seller, but with different agents. It’s a way to avoid conflicts of interest while still allowing the same brokerage to handle both sides of the transaction. In the case of a complex transaction, there will be two designated agents, one to assist with each element of the purchase/sale.
Specializations of real estate agents
Each of the roles above should theoretically be able to be accomplished by any agent. However, real estate agents tend to specialize in one type of transaction, and then grow their expertise and business within that niche. While these four categories represent the major real estate jobs, further subdivisions do exist.
Let’s take a look at ways to classify real estate agents based on the intensity and nature of the services that they provide.
The discount agent/choose-your-commission agent
The discount agent is very different from a traditional real estate agent. Rather than offering comprehensive service for their clients, discount agents sell their offerings a lá carte. Clients pick from a list of options to customize their experience. As a result, compensation is usually lower than a traditional agent.
Discount agents are sometimes known as choose-your-own-commission agents for this reason. A discount agent is ideal for experienced buyers and sellers, or people looking to save on the costs associated with their real estate transaction.
The luxury agent
Traditional agents represent buyers and sellers from the middle of the real estate spectrum, discount agents dominate the low end, and luxury agents handle the market’s top-tier business.
Luxury agents deal in properties whose values reach into the millions. These agents work exclusively with high-net-worth individuals, helping them buy and sell expensive real estate. Unsurprisingly, luxury real estate agents are some of the top earners in their field.
Carving out your niche
Each type of real estate agent occupies their own corner of the market. From brokers to buyer’s agents, dual agents to luxury professionals, every subcategory services a different clientele with a different focus. Excelling in your niche takes hard work, dedication, and marketing efforts that match your professional persona.
Wherever and however you hope to develop your real estate business, Luxury Presence can help. Through our platform, industry professionals of all locations and sizes can improve and focus their marketing efforts on the specific demographics that they serve. Contact us today to learn how the time and money you spend on digital marketing can go further over the year to come.