Posted by: Kaplan Real Estate Education
Updated: October 25, 2021
What Is a Real Estate Agent?
A licensed real estate agent connects buyers and sellers for transactions and represents them in legal negotiations. Generally, agents are compensated through commission, which is a percentage of the sale of the house. The percentage agents receive depends on their state and brokerage. A brokerage is the managing house for agents, allowing the agents to use the company branding, connections, and legal team. If you’re interested in a career in real estate, read our post on how to become a real estate agent.
Real Estate Agent vs. Real Estate Broker
|Broker||Real Estate Agent|
|Took more training and courses to become a managing broker||Has taken only the steps necessary to get licensed—prelicensing courses and the licensing exam|
|Can work independently or own their own brokerage||Works for a brokerage|
|Assists in the backend of sales; the technical and legal details||Submits offers and negotiates; completes sales|
|Capable of doing what the real estate agent does in addition to managing the brokerage.||Works with clients to find them a property|
|Can make a commission from selling a home but also gets a portion of their agent's commission||Earns commission on the sale of a home but has to share the commission with their brokerage|
Managing Your Real Estate Business
There are several administrative tasks a real estate agent does at a well-run real estate business. An excellent real estate agent:
- Keeps up with local and regional market activity and industry news
- Researches active, pending, and sold listings and reviews the daily MLS hot sheet or activity report
- Completes, submits, and files real estate documents, agreements, and records with the proper state agencies
- Plans and coordinates appointments, open houses, showings, and meetings with clients and other real estate agents
- Develops real estate marketing plans for listings and creates fliers, newsletters, and other promotional collateral
- Responds to incoming emails and phone calls
- Update websites, social media profiles, and blogs
Many successful real estate agents have an assistant or office manager to help with the day-to-day activities, allowing the salesperson or broker to focus on more direct revenue-generating activities.
What Does a Real Estate Company Do?
A real estate company can either be a property management group or a brokerage. A property management company buys commercial properties and turns them into apartments or townhomes. This work is all internal, corporate, or onsite at the property, not always buying or selling a property. On the other hand, an agent at a brokerage helps clients buy or sell a home while following the brokerage's branding. In addition, the agent gains access to the brokerage’s resources, such as legal help and backend technical aspects of a sale.
You're Not Just Selling Homes; You’re Selling Yourself.
Attracting clients is crucial to a real estate agent’s success. Below are some tips to attracting new clients:
- Market yourself. Competition is fierce. You need to develop your personal brand in real estate and be known as an expert in the specialization you enjoy. This will help you differentiate through effective marketing. Websites, postcards, television and radio spots, billboards, fliers, and blogs are all channels that can be utilized in effective real estate agent marketing plans.
- Lead generation. Generate leads through networking and relationship development. This starts with people you know, such as friends, family, business associates, and so on. There is little more valuable to a real estate agent than a thriving database of leads.
- Everyone is a prospect. Everyone you meet is a prospective client because most people either rent, buy, or sell a home at some point in their life. A real estate agent’s day is often consumed by cultivating leads and meeting and following up with potential buyers and sellers.
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How Real Estate Agents Work With Sellers
- Meet with and understand the needs of sellers with new listings.
- Demonstrate your market knowledge, marketing abilities, and negotiation skills.
- Research the current local market activity and comparable properties to establish an asking price.
- List the property with relevant listing services.
- Take photos of the property—interior and exterior—to prepare a listing presentation and advertising collateral.
- Stage the home properly, so it looks perfect when you conduct open houses.
How Real Estate Agents Work With Buyers
- Meet with, interview, understand, and qualify prospective buyers.
- Research the listing services for potential properties that fit the needs of your clients.
- Plan property showings for buyers, and set up appointments that fit their schedule.
- Show properties to buyers and communicate details of the property you learned during your research or while speaking with other experts (home inspectors, appraisers, and other real estate agents).
- Demonstrate negotiation skills, making offers of purchase on real estate.
What Do Real Estate Agents Do at Closing?
Throughout the process, the real estate agents act as mediators between the buyer and seller. There is typically a final walkthrough just before the closing date to ensure there has not been any damage to the property. The agent also handles negotiations unless the state requires others present during the signing—such as lawyers and title or escrow agents. In addition to conducting negotiations, the agent reviews all contracts and materials for any mistakes and to ensure accuracy.
Networking With Fellow Real Estate Agents
Real estate agents typically work in an office with other agents and brokers. Here, they can discuss new listings, get updates on current listings, and discuss their client’s needs. The MLS database is another way agents narrow down a search for a buyer or learn about the competition for sellers. This allows agents and brokers to quickly gather first-hand knowledge on properties available in the local market.
How Do Real Estate Agents Get Paid?
Agents earn a commission which is a percentage of the property's sale price. However, they have to give their broker a cut as well. A broker can make a commission from selling a home like an agent. But if they own the brokerage, they get a portion of their agent's commission.
How Much Do Real Estate Agents Make?
As in any career, compensation or salary can differ between positions or even for the same position—the same is true for real estate agents. According to Andrew DePierto of Forbes magazine, on average, a real estate agent in 2019 was making $41,200 annually. However, in 2019, the demand was extremely low for moving. It wasn’t until after the pandemic’s effects subsided that the housing market took off. According to Indeed, the average established agent’s salary is $86,000 as of March 2021. Learn more about how much a real estate agent makes.
Remember, a real estate agent’s income is not limited by an hourly wage or a corporate-dictated salary range. As a real estate salesperson, your income is primarily dictated by the time you invest, how hard you work, and ultimately how many houses you sell. You can grow your real estate business (at your own pace) by adding an assistant or getting the appropriate license that allows you to build and own a brokerage.
Developing Your Real Estate Skills
Continuing education isn’t just a requirement to maintain a real estate license. It’s also a way to develop skills that keep an agent at the top of their game and open doors to new real estate opportunities within their market. Ongoing development and growth are crucial to the long-term success of real estate agents and brokers. Continuing education not only widens their scope of expertise, but it also improves their proficiency, knowledge, and marketability as a real estate professional.
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