People use the terms Realtor and real estate agent interchangeably, but they aren’t the same thing. Not every real estate agent is a Realtor. Both must be licensed to sell real estate, but there are some important distinctions.
An agent is an individual who has obtained a state license to assist consumers in buying or selling properties. Realtors are agents who have gone one step further they’ve also become members of the National Association of Realtors (NAR). The NAR is the largest trade association in the U.S., and “Realtor®” is actually a trademarked term. A Realtor can be a real estate agent, a broker-associate, a managing broker, or an exclusive buyer’s agent, and this is just the beginning of the list.
Education and Other Requirements
Real estate agents must meet certain age and education requirements in the state where they want to work, although these aren’t usually particularly stringent. For example, a four-year college degree is rarely or ever required. Agents must then attend state-approved education courses and apply for and pass the state’s licensing exam. They can then apply for a real estate license. Some states have ongoing certification requirements. A Realtor must meet all these standards, but must additionally pass a course on the NAR Code of Ethics and every four years thereafter to maintain certification.
The Code of Ethics
The NAR Code of Ethics was adopted in 1913, and it’s strictly enforced by local real estate boards. It’s not just a bunch of rules that agents swear to uphold and adhere to because their brokers made them join the Association. The standards are much more restrictive and confining than state guidelines that govern agents. Although there’s no evidence that all Realtors are morally or ethically “better” than unaffiliated real estate agents, the Code of Ethics is an attempt by the industry to regulate them. As a practical matter, even non-NAR member “real estate agents” are held to the same legal standard.
These are the things that a Realtor promises to do, while non-affiliates don’t:
• Put the interests of buyers and sellers ahead of their own and to treat all parties honestly.
• Refrain from exaggerating, misrepresenting, or concealing material facts about a property. Investigate and disclose when situations reasonably warrant it.
• Cooperate with other brokers/agents when it’s in the best interests of the client to do so.
• Disclose if they represent family members who own or are about to buy real estate, or if they themselves are a principal in a real estate transaction.
• Avoid providing professional services in a transaction where the agent has a present or contemplated interest without disclosing that interest.
• Do not collect any commissions without the seller’s knowledge, nor accept fees from a third party without the seller’s express consent.
• Refuse fees from more than one party without all parties’ informed consent.
• Do not comingle client funds with the agent’s own money.
• Attempt to ensure that all written documents are easy to understand and give everyone a copy of anything they sign.
• Do not discriminate in any fashion or for any reason on the basis of race, color, religion, sex, handicap, familial status, sexual orientation, gender identity, or national origin.
• Be competent to conform to standards of practice and refuse to provide services for which they are unqualified.
• Engage in truth in advertising and marketing.
• Do not practice law unless the agent is also a lawyer.
• Cooperate if charges are brought against them and present all evidence as requested.
• Agree to not “bad mouth” competition, and agree to not file unfounded ethics complaints.
• Do not solicit another Realtor’s® client, nor interfere in a contractual relationship.
• Submit matters to arbitration for settlement and not seek legal remedies in the judicial system.
How To Find A Real Estate Agent
Talk to a lender before you hire a real estate agent
Sometimes home shoppers hire a real estate agent and dive into their home search before they ever talk to a lender. Most experts recommend that you talk to a lender first to learn how much how you can afford. Getting preapproved for a mortgage will provide you with the maximum amount you can borrow and identify issues that need to be worked on early in the process. This helps you stick to homes in the right price range, and it will show potential Realtors (and sellers) that you’re a serious buyer. In competitive markets, you’ll need a preapproval letter in order for buyers to consider your offer.
Get referrals from your network
Ask friends and family members if they can recommend a real estate agent with whom they’ve had a good experience. Ideally, you’ll want someone with experience working with clients who are similar to you. The needs of first-time buyers, for example, are different than those of repeat buyers or homeowners who are looking to downsize. Look for a real estate agent who is a Realtor with a capital R. That means they’re a member of the National Association of Realtors (NAR) and have formally agreed to abide by the group’s code of ethics. Some Realtors also have certifications to show that they’ve completed training in a certain area of real estate. Some designations include:
• CRS (Certified Residential Specialist): Completed additional training in handling residential real estate.
• ABR (Accredited Buyer’s Representative): Completed additional training in representing buyers in transactions.
• SRES (Seniors Real Estate Specialist): Completed training aimed at helping buyers and sellers aged 50 and older.
Research potential candidates
Start by examining their online presence. Check their websites and active social media accounts they use to promote their listings. Take a look at their online reviews as well. Don’t worry about one or two negative reviews, but more than that could be a red flag. Check with your state’s real estate regulator to find out whether an agent you’re considering is licensed or has any disciplinary actions.
Interview at least three real estate agents
This is your opportunity to get a sense of the real estate agent’s style as well as their experience. Ultimately, you’re looking for a Realtor who is familiar with a particular area and understands your budget needs.
Request references — and check them
Ask real estate agents to provide information on homes they’ve listed and sold in the past year, with contact information for at least a few recent clients. Call those clients to find out their experience and what type of support the agent provided throughout the process, including during the negotiations. Ask if they’d hire that agent again for their next real estate transaction.
Go with your gut
Just as important as the knowledge and experience an agent brings is their ability to guide you smoothly through the process. Above all, go with an agent you trust and will feel comfortable with if the road to closing gets a little bumpy.
Take a close look at your contract
Your contract should spell out all of the terms to which you’ve already agreed, including the real estate commission. Traditionally, the seller pays 6 percent of the sales price of the home for real estate commissions, with half going to their own real estate agent and half going to the buyer’s agent. The commission rate is negotiable, however, with the average commission actually landing closer to 5 percent in recent years. Another factor to look at: The length of the contract itself. Look for a contract limited to six months or less. In a competitive seller’s market, it can take less than 30 days to sell a home.
What Type of Agent Do You Need?
Agents who work with homeowners selling a home are called “seller’s agents” or “listing agents.” These agents represent the interests of the homeowner during the listing and negotiation process. Agents who work with homebuyers are called “buyer’s agents” or “selling agents.” These agents represent the interests of the buyer during the showing and negotiation process. Some buyer’s agents work exclusively with buyers, meaning they don’t list any homes at all. The terms “seller’s agent” and “selling agent” often confuse people in the home buying and home selling process because they sound almost identical. However, they represent different parties with different interests. Seller’s agents represent the party selling a home, while selling agents represent the party buying the home; however, they’re only called a “selling agent” once the final contract is signed.
Some agents are called “dual agents,” which means they’ve agreed to represent the interests of both the buyer and seller during the home buying process. Dual agency is controversial because agents are forced to walk a very fine line and stay neutral throughout the process. After all, they’re representing a seller who wants to get the highest price possible for their home and a buyer who wants to get the lowest price possible for that same home. There’s also a potential conflict of interest because of commission. In a typical sale, the buyer’s agent and listing agent split the roughly 6% commission, getting roughly 3% each. A dual agent keeps 100% of the commission, which means it’s in their best interest to sell a home for the highest price possible. This works out great for the seller, but not so great for the buyer. Many real estate professionals feel strongly about dual agency, with good reason. Dual agents are legally prohibited from taking sides in the transaction or sharing confidential information. So they get double the commission while providing less advice and guidance to both parties. Dual agency is only legal in some states, In the states where it’s allowed, agents are legally bound to disclose their dual agency before a contract is signed.
How to Find a Great Real Estate Agent
There’s a lot to consider when it comes to finding the best agent for your situation. Here’s how to get started.
Create a Short List of Agents
One of the best places to start your search is Zillow’s Agent Finder, which allows you to see a full list of local agents with their client testimonials and recent listings. The recent listings feature is especially useful. First, you can use it to find agents who have recently worked with sellers or buyers in the area you’re considering. If you’re selling your home, it also lets you analyze how each agent photographs and markets their listings.
Ask Lots Questions
Now that you’ve got a short list of agents, your next step is to talk to them in person. Yes, you can do a phone interview, but meeting in person is better. A face-to-face meeting allows you to really get a feel for who this person is, what their values are, and whether or not their personality will fit well with yours. This is the person who will be guiding you through a stressful, and financially significant, process; you need to feel comfortable talking with them. You also need to know if they’re going to tell you the truth instead of sugar-coating some bad news. And you need to know that you share the same core values.
Talk to Past Clients
Once you’ve interviewed several agents in person, it’s essential to talk to some of their past clients. Ask each agent to provide you with contact information for at least three clients they’ve worked with in the past year.
Consider asking these clients the following questions:
• How was your experience with this agent overall?
• What did you like best about this agent? What did you like least?
• If you sold your home, how did the agent market your property? Do you feel it was effective? How long was your home on the market?
• If you bought your home, do you feel the agent was willing to show you every property you were interested in? Did you feel they understood what you really wanted in a home?
• Were they quick to respond to phone calls and email?
• Are they a good listener?
• What was your home’s list price and final sale price?
• Do you feel this agent got you the best price possible?
Verify Their License
It’s hard to believe that someone would lie about being a licensed real estate agent, but it happens. Fortunately, there’s an easy way for consumers to check that an agent’s license is legitimate. In Utah, you can call the Utah Department of Real Estate to inquire as to a license.
Working With New Agents: Pros & Cons
If you’re considering working with an agent with little or no experience, then you need to find out more about their current situation and future goals. For example, many agents begin their careers selling homes on the side while still holding down a full-time job. While there’s nothing wrong with this, it’s important to find out whether this agent will have the time and flexibility you need. Consider these questions:
• Will you be able to return phone calls or emails during the day, or only in the evening?
• Will you be limited to showing homes only on the weekend?
• Do you have a mentor you can turn to if the negotiation process gets tricky or unfamiliar?
• Have you attended any recent conferences or seminars? If so, which ones?