Real Estate Agent

Real Estate Agent: Definition, Role, and Compensation

Key takeaways
* A real estate agent is a licensed professional who represents buyers or sellers in property transactions.
* Agents typically earn commissions—percentages of the sale price—but fee structures are evolving (flat fees, reduced commissions, à la carte services).
* Most agents work under a licensed real estate broker; some are members of the National Association of Realtors (NAR) and must follow its code of ethics.

What a real estate agent does
Real estate agents handle tasks that guide a property from listing to closing. Typical responsibilities include:
* Advising sellers on pricing, staging, and marketing; listing properties on MLS and other venues.
* Searching for properties, analyzing comparable sales, and preparing offers for buyers.
* Negotiating offers and counteroffers, conveying communications between parties, and protecting clients’ interests.
* Coordinating inspections, appraisals, escrow/closing procedures, and required paperwork.
* Researching market trends, local zoning, neighborhood features, and legal/regulatory updates.

Types of agent representation
* Listing agent (seller’s agent): Represents the seller and focuses on marketing and pricing the property.
* Buyer’s agent: Represents the buyer and seeks suitable properties, advises on offers, and negotiates terms.
* Dual agency: When one agent or brokerage represents both buyer and seller. It creates potential conflicts of interest and is illegal in some states (Alaska, Colorado, Florida, Kansas, Maryland, Texas, Vermont, and Wyoming). Agents must disclose whom they represent.

How agents are compensated
* Traditional commissions: A percentage of the final sale price, typically split between listing and buyer’s agents and between agents and their brokers.
* Alternatives: Flat fees, tiered or lower commissions for high-price sales, or à la carte services (pay only for listing on MLS, open house help, etc.).
* Who pays fees: Commission arrangements are negotiated; historically sellers paid listing commissions that are shared, but compensation practices are changing and may be negotiated by buyers or sellers.

Real estate agent vs. broker vs. Realtor
* Real estate agent: Holds a basic license after required courses and passing a state exam. Usually works for a broker.
* Real estate broker: Holds additional education and a broker’s license, often manages or owns a brokerage, may handle escrow/earnest money and hire agents.
* Realtor: Any agent, broker, or other real estate professional who is a member of the National Association of Realtors (NAR) and adheres to its code of ethics.
Note: All brokers were agents at some point, but not all agents are brokers; not all agents or brokers are Realtors.

Becoming a real estate agent (general steps)
* Meet age/residency requirements for your state.
* Complete pre-license education as required.
* Pass the state real estate licensing exam.
* Activate your license and affiliate with a broker or brokerage.
* Maintain continuing education and comply with state regulations.

Compensation and earnings
* Median annual wages (U.S., 2023): about $54,300 for sales agents and $63,060 for brokers (Bureau of Labor Statistics). Actual income varies widely by market, experience, part-time vs. full-time status, and deal volume.
* Income tends to be commission-driven and can fluctuate with market conditions.

Skills and habits for success
Successful agents typically have:
* Strong communication and negotiation skills.
* Local market knowledge and research ability.
* Networking and relationship-building capabilities.
* Marketing and technology proficiency.
* Organization, goal-setting, persistence, and ethical integrity.

Recent industry change
In 2024, the National Association of Realtors reached an agreement in a nationwide lawsuit related to commission practices, a development that may affect how broker compensation is displayed and negotiated on multiple listing services (MLS).

Bottom line
Real estate agents facilitate property transactions by advising clients, marketing properties, negotiating deals, and guiding paperwork to closing. While commissions remain common, fee structures are diversifying. Agents usually operate under a broker’s supervision, and professional success depends on market knowledge, communication, networking, and ethical conduct.