A real estate agent, working on behalf of a licensed real estate broker, is a licensed professional who works on behalf of the buyer and seller of real estate during a sales transaction.
How It Works
A real estate agent, working on behalf of a real estate broker, acts as an intermediary between sellers and buyers. A real estate agent attempts to find sellers who wish to buy and sellers who wish to sell specific locations. In addition, an agent will help negotiate a transaction between the buyer and seller, documenting the exchange of terms and conditions, and representing either or both parties at the settlement (the closing of the transaction where the real estate is transferred and money is paid). Real estate agents may also help with other aspects of a transaction, including inspections, legal documentation, and even financing. These services are usually secured by referral by real estate agents and not provided as part of the real estate agent's fees.
Real estate agents market their services and attempt to secure an "exclusive" listing, the right to represent the property owner in any sale of his or her property. In the event that a sale is actually completed by another agent, the commission is usually shared.
A real estate agent usually works on a commission (depending on the location, market, and prevailing laws, a commission somewhere between 3.5% - 7% of the purchase price of the real estate). The commission is usually paid by the seller at the closing (i.e. final transfer of property and money).
In the United States, real estate agents must be licensed in order to receive a fee for their services.
Why It Matters
The details of a purchase or sale of real estate can be complicated and expensive. Licensed real estate agents are trained to handle all aspects of a real estate transaction and to represent the best interest of the buyer or seller.
Good references, local market knowledge and experience are key to the success of the real estate agent and should be evaluated before engaging their services.