The buying or selling of a home or investment property can be one of the most significant events in a person's life. Both of these things are usually accomplished with the assistance of a Real Estate Agent. Agents are responsible for arranging sales of houses or other properties on behalf of the sellers and/or buyers. In order to do this well, agents need to interface closely with the client on issues such as the method of sale, presentation of the property, costs, and inspection times. They need to know the local market well enough to accurately estimate the current market price and suggest a reserve or minimum selling price. They then need to arrange for the optimal means of advertising the property. Once an agreement is reached, the agent is responsible for drawing up the legal papers and arranging financing and insurance.
Real estate agents have similar jobs as Real Estate Brokers and the duties often overlap. One of the principal distinctions is that brokers are licensed to manage their own real estate businesses. Agents usually work with a broker, providing their services on a contract basis. In this type of arrangement, the agent is typically given access to the broker's resources which often includes office space. In return, the broker and agent share the commission earned from the agent's sale of the property.
Some real estate agents are specialists and concentrate on a particular facet of the profession. These include the following:
- Relocation Specialists: Their principal function is to assist individuals who are relocating to other geographic areas. In order to do this, specialists need to have extensive knowledge of schools and other neighborhood characteristics of the new area. They are often paid by employers who are relocating their employees.
- Commercial Real Estate Agents: They focus specifically on the purchase or sale of commercial property. Their expertise includes knowledge of such things as available housing for employees of the relocating business, school facilities for their children, and the local availability of appropriate labor.
- Leasing Agents: They are responsible for keeping commercial buildings fully occupied while obtaining the highest possible rental rates. This type of agent needs a thorough knowledge of local rental rates and of local rent control laws and laws which affect real estate development.
Real estate agents provide assistance to individuals or families who want to buy a house or sell one. When the client is a buyer, the agent will first meet with the client to find out what kind of house the client wants and how much money he/she can afford to spend. The agent will then research homes for sale and take the buyer to see some. When the client is a seller, the real estate agent will help the client set the price for the house and will come up with strategies to most effectively advertise and present the home to potential buyers.
Real estate agents act as intermediaries in price negotiations and represent their client in discussions with the other party. In order to do their job properly, they need to maintain a thorough knowledge of the real estate market in their community. They also need to know their client well enough to be able to identify which neighborhoods will best fit his/her needs and budget. They need knowledge of local zoning laws and they also need to know the best sources of obtain financing. In many cases, the agent becomes directly involved in securing favorable financing from a lender. As part of the process, which can often be a long one, agents may meet numerous times with prospective buyers to discuss and visit available properties. Once a contract has been signed by the buyer and the seller, the real estate agent is responsible for ensuring that all special terms of the contract are met before the closing date and also that any legally-required or agreed-upon inspections (e.g., radon and termite inspections) occur. In addition, the agent must see to it that any agreed-upon repairs are made by the seller.
When representing sellers, agents typically arrange for title searches to verify ownership. When listing a property for sale, agents compare the listed property with similar properties that recently sold so that they can best determine a competitive market price for the property. Although acting as a representative of the seller, agents quite often assist in arrange favorable financing for the prospective buyer. Many times, this move represents the difference between success and failure in closing a sale.
Typically, real estate agents work more than 40 hours a week and their work often includes evening and weekend hours. Despite the long and irregular hours, most agents have the freedom to pretty much determine their own schedule. They are in most cases able to arrange their work so that they can have time off when they want or need it. Agents usually work out of an office but in some cases work out of their home. Much of their home/office time is spent either on the phone or on the computer, where they peruse the Internet to gather and collate information about properties. Most of their out-of-office time is spent on the road showing houses to customers, analyzing properties for sale, or meeting with prospective clients.
A career as a real estate agent can be rewarding in an emotional, and sometimes in a financial sense; however, it can also be challenging and frustrating. The job requires lots of preparation and a ton of patience. Dealing heavily with the public requires good agents to have other skills as well. A pleasant personality, a good appearance, maturity, trustworthiness, good judgment, and enthusiasm for the job are attributes needed to attract prospective customers in this highly competitive field. Successful agents are also detail-oriented, well organized, and have a good memory for names and faces.
The U.S. Department of Labor Bureau of Labor Statistics (USDL BLS) projects employment of real estate agents to grow about as fast as the average profession over the next several years. That having be said, it should be noted that job prospects for real estate agents are very sensitive to swings in the economy and most especially to interest rates. During periods of low economic activity and rising interest rates, the sale volume falls and so does the resulting demand for agents. The USDL BLS points out that relatively low interest rates along with a general perception that real estate usually is a good investment portend a positive outlook for sales of real estate. On the other hand, improvements in technology are now allowing prospective customers to perform their own searches for properties online by accessing real estate information available on the Internet. This development has lessened to some extent the need for agents or at the very least made their jobs harder.
The field is relatively easy to enter and is attractive because of its flexible working conditions; however, those starting out face competition from their better established and more experienced counterparts in obtaining listings and in closing sales. The main sources of earnings of real estate agents are commissions on sales. Commission rates vary according to the type of property, its value, and whether or not the agent works for a broker (in which case he/she will need to share the commission with the broker). Commissions may be divided among several agents and brokers. Earnings, particularly for beginners, are often irregular because sometimes weeks and even months go by without a sale.
Real Estate Agent Training, Certification, and Licensing
Every state requires agents to be at minimum high school graduates who have completed between 30 and 90 hours of classroom instruction. However, as real estate transactions have become more legally complex, many firms have turned to college graduates to fill positions. Literally hundreds of universities, colleges, and community colleges offer courses in real estate. Many offer associate's or bachelor's degrees in real estate; some offer graduate degrees. Additional courses in business administration, finance, statistics, economics, marketing, law, and accounting can be especially helpful.
Licensure is a requirement in all states and every state has its own licensing process; therefore it is imperative that an aspiring real estate agent take the time to research the requirements of the state in which he/she intends to practice. The best way to start is by contacting the state's real estate commission. While no two states have the same regulations for obtaining a license, the requirements usually include an educational component as well as the ability to pass some sort of exam. Subject matter covered by the licensing exams varies by state but generally includes questions relating to national and state-specific laws and regulations affecting the sale of property. Some states also require sponsorship by a licensed real estate broker and/or a specific amount of experience selling real estate. Once a license is obtained, some states require annual renewal with proof of continuing education credits.
For those starting out, a good approach is to seek out and join the local real estate agents' association. Agents who are active in local real estate associations can broaden their contacts and increase their earnings. There are also national associations, most notably the National Association of Realtors (NAR), which boasts over one million members and provides continuing education courses, an annual requirement for maintaining a license in some states.
- Licensing information by state
- The National Association of Realtors (NAR)
- Mortgage News Daily
- The National Association of Real Estate Brokers (NAREB)
- The National Association of Exclusive Buyer Agents
- Real Estate ABC
The large majority of real estate agents are self-employed. Most of them, however, work on a commission or fee basis for local or nationally known brokerage firms. Many agents work part time, combining their real estate activities with other careers. Although real estate is sold everywhere, real estate agent jobs tend to be concentrated in large urban areas and in rapidly growing communities.
Schools for Real Estate Sales Agents are listed in the column to the left.