when you re engaged in a real estate transaction you should be clear about which party a real estate agent represents the buyer the seller or both parties 3 the party that the real estate agents represent and have a fiduciary responsibility to can significantly affect how they act during the transaction state laws regulate whether an agent can represent both parties in a real estate transaction technically known as dual agency 4 agents must disclose whom they represent so that buyers and sellers are aware of any conflicts of interest 4
dual agency in which one person represents both the buyer and seller in a real estate transaction is illegal in eight states alaska colorado florida kansas maryland texas vermont and wyoming real estate agent compensationtraditionally agents were paid a percentage of the property s sale price through commission the more the house sells for the more money the agent makes 2 however payment arrangements for real estate agents are changing with online listings allowing consumers to do much of the shopping on their own without help from an agent 5some brokerages charge a lower commission for more expensive properties and some handle the entire transaction for a flat fee that ends up lower than a regular commission other companies offer an la carte price structure that lets sellers pay only for certain parts of the sale process such as adding the property to a multiple listing service or helping with an open house 5you hear people use the terms real estate agent real estate broker and realtor interchangeably while there is overlap among them there are key differences to know real estate agent vs real estate brokerthe distinctions between a real estate agent and a real estate broker vary across states 4 generally speaking anyone who earns a basic real estate license which involves taking a certain number of accredited courses and passing an exam is a real estate agent a salesperson qualified to help consumers buy or sell property 1a real estate broker is a step up the professional ladder brokers have additional training and education and have a broker s license most states also require that brokers have a certain amount of recent experience as active real estate agents brokers handle the technical aspects of the real estate transaction 4 a client signs a contract with a brokerage not an individual agent in many states brokers additional certification authorizes them to handle other legal and financial aspects of a deal such as handling the earnest money deposit and establishing the escrow account 1brokers normally own a firm or a franchise they can be on their own but must obtain an additional license to hire agents or other brokers to work for them meanwhile a real estate agent ordinarily cannot work alone but must operate with a real estate broker the exceptions are in states such as colorado and new mexico which mandate that every real estate professional be licensed as a broker 67 more typically agents work for brokers and split commissions with them on march 15 2024 the national association of realtors settled a class action lawsuit brought by home sellers who alleged that the association had inflated the commissions paid to its realtors as part of the proposed 418 settlement the nar agreed to prohibit offers of broker compensation when a property is listed on its multiple listing services mls if approved by the court the new rule is expected to give buyers more room to negotiate on agent commissions 8real estate agent vs realtorevery real estate broker is or has been a real estate agent but not every real estate agent is a broker how do realtors fit into the equation a realtor is a member of the national association of realtors nar a trade association both agents and brokers can be realtors along with property managers appraisers and other real estate industry professionals realtors are expected to be experts in their field and must follow the nar s code of ethics which requires agents to uphold specific duties to clients customers the public and other realtors in addition to nar realtors must belong to a state or local real estate association or board all realtors are real estate agents brokers or in a related profession but not all agents or brokers are realtors there are about three million active real estate licensees in the u s almost 1 6 million nar members and about 106 500 brokerage firms in the u s 910