A real estate agent is a state‑licensed professional who helps people buy, sell, rent, or lease property. Agents act as intermediaries: they list and market properties, identify homes or commercial space that meet a client’s needs, prepare and review offers, negotiate terms, coordinate inspections and closings, and manage the paperwork that completes a transaction. Most agents work under a licensed brokerage and earn compensation—typically a commission—when a transaction closes.
“Agency” is a legal relationship created when a client (principal) hires an agent to act on their behalf. The agency relationship defines who the agent represents (buyer or seller), what decisions and duties the agent will perform, and the agent’s legal obligations. Agency matters because it determines the agent’s fiduciary duties, who gets confidential information, and how conflicts of interest must be handled.
Loyalty means the agent must prioritize the principal’s interests above the agent’s own and above third parties’ interests. Confidentiality means the agent must keep private information—like the principal’s bottom price, financing terms, or motivation to sell—unless the principal gives permission to disclose. In practice this means agents avoid sharing negotiating strategies or weaknesses and refuse offers that would benefit the agent over the client.
Agents must disclose material facts about the property and the transaction that could affect a client’s decision—known defects, zoning issues, liens, or pending assessments, for example. They also must disclose conflicts of interest (such as a relationship with the other party) and any financial incentives they receive. Honesty requires truthful marketing, accurate MLS entries, and transparent communication about offers and transaction status.
Reasonable care means the agent must use the knowledge, skill, and diligence a competent agent would provide—researching comps, meeting deadlines, and coordinating inspections. Obedience requires following lawful instructions from the client (e.g., pricing or showing restrictions). Accounting means properly handling and documenting client funds—deposits, earnest money, and commissions—so they can be tracked and produced on request.
A listing agent is hired by a property owner to market and sell the property. Typical duties: setting a listing price using a comparative market analysis (CMA), preparing the home for market (staging/photo recommendations), advertising the property on the MLS and other channels, coordinating showings and open houses, vetting buyers, negotiating offers, and guiding the seller through closing. The seller signs a listing agreement that defines the agent’s authority and commission.
A buyer’s agent represents the buyer’s interests: identifying homes, arranging showings, providing market data, advising on offers and contingencies, negotiating price and terms, and helping through inspections and closing. Buyer’s agents typically work under a buyer‑broker agreement that clarifies duties, duration, and compensation.
Dual agency occurs when the same brokerage or agent represents both buyer and seller in a single transaction. Because duties like confidentiality and full advocacy conflict when representing both sides, dual agency is restricted or banned in some states and requires informed consent in others. A transaction broker offers limited representation to both parties without fiduciary advocacy—helping the transaction proceed while providing fewer duties than a full agent. Both arrangements raise conflict‑of‑interest concerns and require clear, timely disclosures.
Sub‑agency happens when an agent working for a cooperating broker owes fiduciary duties to the seller through the listing broker. That structure is less common today but still exists in some markets. A designated agent model creates separate agents within the same brokerage—one designated to represent the seller and another to represent the buyer—while the brokerage as an entity may still have exposure. Designation reduces conflict but requires strict internal walls and disclosures.
Rental and leasing agents focus on residential or commercial leases—finding tenants, screening applicants, and negotiating lease terms. Property managers handle ongoing operations for owners: rent collection, maintenance coordination, tenant relations, and accounting. These roles overlap with agents but often include longer‑term operational duties rather than single transaction representation.
An “agent” (also called salesperson) holds a state license to perform real estate activities but generally must work under a licensed broker. A “broker” has additional education and licensing that allows them to run a brokerage, supervise agents, and hold client funds. Brokers can also act as agents but are responsible for compliance and oversight of their team.
“Realtor®” is a trademarked term for a real estate professional who is a member of the National Association of Realtors (NAR). Realtors agree to abide by NAR’s Code of Ethics, which imposes higher standards on duties to clients, fair dealing, and public trust than basic licensing rules.
Real estate agents handle marketing, negotiation, and transaction coordination, but they are not attorneys. Use a real estate attorney when transactions involve complex legal issues—title disputes, significant contract drafting or unusual contingencies, large commercial deals, partition actions, or when your state’s law requires attorney review for closings. Attorneys can provide legal advice, draft enforceable documents, and represent you in litigation.
Most residential transactions pay agent compensation as a percentage commission of the sale price (commonly 5–6% split between listing and buyer brokerage). The listing broker typically offers a cooperating broker fee through the MLS. Individual agents receive a split of their brokerage’s share—examples: 50/50, 60/40, or graduated splits based on production.
Formally, the seller pays the commission out of sale proceeds; the seller’s broker then compensates the buyer’s broker according to the MLS offer of cooperation. Commission amounts are often published in MLS data but can be negotiated prior to listing. Buyers seldom directly pay buyer’s agent commission except in cases where buyer broker agreements specify otherwise.
Not all agents work on percentage commissions. Alternatives include flat‑fee listing services, hourly consulting fees, or discount brokerages that offer limited services for lower fees. Some brokerages charge a flat fee to sellers while offering reduced marketing. Understand the service scope before choosing a nontraditional fee arrangement.
Commissions are negotiable. Sellers and buyers should discuss fees upfront and get them in writing within listing or buyer agreements. Agents must disclose compensation arrangements and any referral fees or bonuses that could influence advice.
Exclusive listing agreements give one broker the exclusive right to market and sell the property for a set period and earn the commission if a buyer is found (even if the seller finds the buyer). Open listings allow multiple brokers to try to sell the property; only the broker who procures the buyer is paid. Exclusive right‑to‑sell is most common because it motivates the broker to invest in marketing.
A buyer broker agreement sets the relationship between buyer and agent. An exclusive agreement obligates the buyer to work only with that agent and typically guarantees compensation if the buyer purchases within the agreement term. Non‑exclusive agreements allow the buyer to work with multiple agents. Read termination and commission clauses carefully.
Most states require written agency disclosures to explain who the agent represents and what duties they owe. Disclosures should be made early—often at first substantive contact—and again in listing and buyer agreements. Disclosures must clearly state if the agent is a dual agent, transaction broker, or working as a sub‑agent.
Key contract items to check: length of term, how the agreement terminates, who owes commission and under what circumstances (e.g., post‑term sales to buyers the agent introduced), marketing expenses, and any guarantees or cancellation penalties. Make sure termination rights and notice requirements are reasonable and clearly defined.
Agents cannot sign binding documents on your behalf unless you give them express authority—usually through a signed power of attorney (POA) or specific agency clause in a contract. Typical agency agreements authorize agents to present offers and negotiate, but the principal must sign and execute binding contracts, unless a POA is granted for a limited purpose.
An agent can bind you only to the extent you have authorized them in writing. Routine tasks—submitting offers, responding to inquiries, and negotiating terms—are within an agent’s scope, but the final purchase contract, loan documents, and deed transfers generally require the principal’s signature (or a valid POA).
Clients should clearly define the agent’s decision‑making authority: are agents allowed to accept offers under a certain threshold, waive contingencies, or approve repair credits? Delegated authority must be explicit and in writing. When in doubt, agents should seek written instructions before taking action that could bind the client.
Every state maintains a license lookup portal—search the agent’s name or license number to confirm active status, expiration date, and brokerage affiliation. The lookup may also list disciplinary actions, CE completion, or license conditions. An active, in‑good‑standing license is the minimum requirement.
Licensing boards often publish disciplinary history and complaints. Review any sanctions, fines, or license suspensions carefully. Ask the agent or brokerage whether they carry errors & omissions (E&O) insurance, which can cover professional mistakes. Serious or repeated disciplinary issues are red flags.
Read client reviews, check the agent’s transactional history (time on market, list/sale price ratio), and ask for references—especially clients with situations similar to yours. Confirm the agent’s local market experience, marketing plan, negotiation track record, and communication style before hiring.
Dual representation or undisclosed relationships between agents and other parties can compromise advocacy. Watch for pressure to accept offers quickly, unexplained concessions, or lack of transparency about who the agent represents. Always ask for written disclosure when representation could be split.
Unclear billing practices—late chargebacks, undisclosed marketing fees, or ambiguous commission clauses—are warning signs. Require a written fee schedule, ask how marketing dollars are spent, and get clarity on who pays for services like photography, staging, and MLS syndication.
Regular, timely communication is essential. If an agent misses contingency deadlines, fails to return calls, provides few showings, or produces low‑quality marketing, consider addressing concerns in writing or changing agents. Document missed commitments as they may support contract disputes.
Hire an agent when you need market expertise, negotiation skill, and transaction management—first‑time buyers, sellers who want full market exposure, bidding wars, complex contingencies, or transactions requiring local relationships (inspectors, lenders, title). Agents can save time, reduce legal risk, and often net higher sale proceeds for sellers.
Selling For Sale By Owner (FSBO), using online listing services, or hiring a limited‑service broker can reduce fees but increases your workload and legal exposure. Use FSBO only if you’re comfortable with pricing, marketing, contract drafting, and negotiations. Consider partial‑service plans (flat fee MLS listings) if you want support without full commission fees. Learn more about FSBO at https://www.turbohome.com/glossary/FSBO.
Investors and repeat buyers often use in‑house or trusted agents, negotiate lower fees, or engage limited‑service arrangements because they have repeat processes and prefer speed over marketing. They may also retain attorneys for contract review and use cash deals to simplify closings.
Essential interview questions:
Agree on a communication plan (preferred channels and frequency), timeline for milestones (listing, showings, offer review, inspections), and a specific marketing strategy (MLS, professional photos, open houses, syndication). Put these expectations in the listing or buyer‑broker agreement to reduce misunderstandings.
Review the agreement for termination clauses and notice requirements. If you need to switch agents, provide written notice and follow contract terms. If the broker refuses to release you or is in breach, consult the brokerage manager or a real estate attorney. Keep records of poor performance or contract violations to support your request.
Real estate rules vary by state: dual agency legality, required written disclosures, mandatory attorney involvement in closings, and commission regulations can differ. Check your state licensing board and local statutes to understand specific consumer protections and agent duties in your area.
In other countries, licensing, buyer protections, and the agent’s role can be very different. Some jurisdictions require attorneys to handle conveyancing, while others give broader powers to estate agents. Always verify local licensing, fiduciary rules, and whether an agent’s duties are regulated or primarily market‑driven when buying or selling abroad.
If an agent breaches laws or licensing rules, file a complaint with the state real estate commission or licensing board. Boards investigate complaints, may impose fines, suspend licenses, or require corrective measures. Timelines vary—file promptly and include documentation (contracts, emails, MLS prints).
Clients can pursue civil claims for breach of fiduciary duty, negligence, fraud, or contract breach. Remedies may include monetary damages, rescission of a sale, or reimbursement of fees. Consult a real estate attorney to assess the merits and required evidence for a claim.
Many disputes are resolved through mediation or arbitration, sometimes required by contract. If an agent is ineffective mid‑transaction, you can request a replacement or contact the broker. Termination may be limited by contract; always follow contractual notice provisions and seek legal advice if necessary.
Agents market properties, identify listings, prepare offers, negotiate terms, coordinate inspections and closings, and manage transaction paperwork while advising clients on market value and strategy.
Representation depends on the agency agreement and disclosures. A listing agent represents the seller; a buyer’s agent represents the buyer. If the same brokerage represents both sides, the broker must disclose dual agency or offer a transaction broker option.
Yes. Commissions are negotiable. Sellers and buyers should discuss fees upfront and get agreements in writing. Alternative fee structures (flat fee, hourly) are also options.
Dual agency is legal in some states with full disclosure and consent, restricted in others, and banned in a few. Check your state’s rules or ask the agent to explain the local law.
Use your state real estate commission’s license lookup tool to confirm active status, expiration, and any disciplinary history. Ask the agent for their license number and brokerage details.
Maria signs a buyer‑broker agreement with a local agent. The agent reviews Maria’s budget, pre‑approval, and desired neighborhoods, shows target properties, identifies a home, and prepares an offer with contingencies (inspection, financing). The listing agent presents the offer to the seller. After negotiation, Maria’s agent coordinates inspection and appraisal and attends closing. Commission flows from the seller’s proceeds to the listing broker, which divides the cooperating commission with Maria’s broker according to the MLS offer.
Seller signs an exclusive right‑to‑sell listing with a 90‑day term. After 30 days, the seller wants to cancel. The seller should review the listing agreement for termination, cure periods, and any post‑term protection clauses that could require payment if a buyer introduced during the listing period buys after termination. If the agent materially breached (failed to market, missed deadlines), the seller can negotiate release or pursue remedies. Always document communications and seek legal advice for disputes.
During a bidding war, a brokerage represents both buyer and seller. The broker must disclose dual agency and obtain written consent. The broker cannot share confidential negotiating positions (e.g., buyer’s highest price or seller’s minimum acceptable price). If either party objects to limited representation, they can decline and request separate agents or the brokerage may designate separate agents (if local law permits) to preserve fairness.
State license lookups and sample forms vary by state. Search your state’s real estate commission website for license verification and example agency disclosure forms. For general glossary resources, see FSBO: https://www.turbohome.com/glossary/FSBO.
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