What are the Different Types of Real Estate Agents?
Collaborating with a proficient real estate agent who possesses extensive knowledge of the local housing market is crucial, regardless of whether you are in the process of selling a downtown loft, a retirement community condo or townhouse, or a suburban single-family home. However, there are instances when sellers require an additional level of expertise and seek out specialized real estate agents who possess an in-depth understanding of specific property types, housing regulations, and effective marketing strategies tailored for niche buyers, such as those in the luxury market.
Among the 3 million real estate agents in the United States, there are approximately 1,547,699 registered Realtors®, according to the NAR. The state of Florida boasts the largest number of Realtors®, totaling 213,759, followed closely by California with 205,248 Realtors®.
What is a real estate agent?
A real estate agent serves as a licensed professional who plays a crucial role in representing both buyers and sellers throughout the entire process of a real estate transaction. They possess the expertise to gather essential market data, handle legal documents, negotiate deals, and facilitate the smooth execution of sales.
In exchange for their valuable services, real estate agents receive commissions based on a percentage of the sale proceeds, typically received at the closing of the transaction. The involvement of agents can significantly enhance the value of a home sale.
According to data provided by the National Association of Realtors® (NAR), homes sold with the assistance of agents in 2021 achieved a median price of $318,000, compared to $260,000 for properties sold directly by the owner (FSBO).
What is a Realtor®?
While the terms "real estate agent" and "Realtor®" are often used interchangeably in everyday language, they do have a slight distinction. A Realtor® is typically a licensed real estate agent who holds an official membership with the National Association of Realtors® and abides by the Code of Ethics and Standards of Practice.
This code ensures that Realtors prioritize the best interests of their clients and adhere to a set of ethical rules, regulations, and standards. Being a Realtor® entails a higher level of accountability and fiduciary duty to clients.
What is a real estate broker?
A real estate broker is an experienced real estate professional who has taken their licensure to the next level by obtaining a broker's license. This achievement requires additional training and successfully passing an examination. Brokers, have the ability to manage sales agents or even establish their own brokerages, as highlighted by Biedenharn.
Brokers are held to a higher standard in terms of their knowledge base and the expectations placed on them in various scenarios. When faced with complex legal or industry-related questions, agents often turn to their brokers for guidance and clarification.
In terms of compensation, managing brokers, receive a percentage of the real estate commission earned by their agents. Typically, the seller is responsible for paying the commission on the sale of their home, which is typically around 6% of the sale price, to their listing agent (also known as the seller's agent). This commission is then divided between the listing agent and the buyer's agent, usually in equal halves. After paying the buyer's agent, the listing agent will also allocate a portion of their remaining commission to the broker, often up to half of the amount.
Types of real estate agents
Real estate agents have the flexibility to specialize in different areas of the industry as they progress in their careers. Initially, many agents start off as generalists, catering to a broad range of real estate needs. However, as they gain experience and knowledge, they may choose to narrow down their focus and specialize in specific niches within the real estate market. This specialization allows agents to develop expertise in particular areas and better serve clients with specific needs or interests. By honing their skills and knowledge in a niche, agents can provide targeted and specialized services that cater to the unique requirements of their clients.
Partnering with an experienced real estate agent who possesses in-depth knowledge of the local housing market is essential, regardless of whether you're selling a downtown loft, a retirement community condo or townhouse, or a single-family home in the suburbs. However, there are times when sellers may need to take an extra step and hire specific types of real estate agents who specialize in particular property types, housing laws, and targeting niche buyers, such as those in the luxury market.
By obtaining the SRS designation, real estate agents can enhance their skills, provide exceptional service to sellers, and navigate the marketplace with confidence and expertise.
Real Estate Designations
1. Seller Representative Specialist (SRS)
The Seller Representative Specialist (SRS) designation offers real estate agents a robust training program, skill-building opportunities, and valuable resources to effectively represent sellers in the marketplace. This designation serves as a solid foundation, providing agents with the necessary tools to excel in their role. The SRS designation brings several advantages to real estate agents, including:
Enhanced Selling Performance and Increased Listings:
Agents with the SRS designation experience improved selling performance, achieving better results for their clients. Additionally, they have a greater ability to attract and secure more listings, expanding their business opportunities.
Adherence to the Code of Ethics and Standards:
The SRS designation emphasizes the importance of upholding ethical principles and standards in the real estate industry. Agents with this designation are equipped with a deep understanding of the Code of Ethics, enabling them to serve their clients with integrity and professionalism.
Mastery of Effective Methods, Techniques, and Tools:
The SRS designation equips agents with a diverse set of methods, techniques, and tools that are specifically tailored to assist sellers. This knowledge empowers agents to employ effective strategies and approaches when representing their clients, ensuring optimal outcomes.
2. Accredited Buyer’s Representative (ABR®)
The Accredited Buyer's Representative (ABR®) certification is designed to equip real estate agents with the necessary skills to understand and meet the needs of buyers throughout the real estate transaction process. This certification offers agents access to research, instruction, and valuable resources that assist them in:
Effectively Communicating Value to Buyers:
The ABR® certification trains agents to effectively communicate the unique value they bring to buyers. Agents learn how to showcase their expertise, market knowledge, and ability to guide buyers through the complex real estate landscape.
Skillful Negotiation on Behalf of Buyers:
A crucial aspect of the ABR® certification is honing negotiation skills specific to representing buyers. Agents learn proven techniques and strategies to advocate for their clients' best interests, ensuring favorable outcomes when presenting and negotiating offers.
Successfully Closing Transactions:
The ABR® certification equips agents with the knowledge and resources needed to navigate the complexities of the transaction process. Agents gain insights into the intricacies of contracts, contingencies, and timelines, enabling them to guide buyers smoothly from offer acceptance to closing.
By obtaining the ABR® certification, real estate agents enhance their ability to understand buyer needs, effectively communicate their value proposition, negotiate on behalf of buyers, and successfully guide transactions to a close. This certification demonstrates a commitment to providing exceptional service and expertise to buyers in the real estate market.
In summary, the CRS designation is an esteemed credential that unlocks a world of opportunities for residential real estate professionals. It elevates their standing within the industry, enables them to triple their earnings, gross sales, and transaction volume, and establishes them as top performers who are dedicated to delivering exceptional service to their clients.
3. Certified Residential Specialist (CRS)
The Certified Residential Specialist (CRS) designation holds the distinction of being the highest credential bestowed upon residential real estate professionals, as recognized by the NAR. Attaining the CRS designation brings numerous advantages to agents, including the potential to significantly enhance their earnings, gross sales, and transaction volume when compared to Realtors® who have not obtained this prestigious designation.
Agents with the CRS designation have demonstrated a superior level of expertise and proficiency in residential real estate. This designation signifies their commitment to continuous professional development, mastery of industry knowledge, and implementation of best practices.
By investing in the CRS designation, agents position themselves as trusted advisors and experts in their field, thereby building strong credibility and earning the trust of clients.
The CRS designation not only enhances an agent's earning potential but also provides them with a competitive edge in the marketplace. Clients seeking to buy or sell residential properties are more likely to choose an agent with the CRS designation due to their specialized knowledge and proven track record of success.
4. NAR’s Green Designation
The NAR's Green Designation is a valuable certification that equips real estate agents with the knowledge and strategies to gain a competitive edge in marketing green homes. This designation provides agents with a comprehensive understanding of how to effectively market properties with energy-efficient and sustainable features, highlighting the unique selling points that differentiate them from traditional homes.
Agents who obtain the Green Designation learn specialized techniques and approaches for marketing green properties. They gain insights into the specific needs and preferences of environmentally conscious buyers, allowing them to tailor their marketing efforts accordingly. This includes highlighting the energy-saving benefits, eco-friendly materials, and sustainable technologies that make these homes desirable to a growing segment of the market.
The Green Designation covers various green issues, research, and resources that impact the real estate industry. Agents gain a deeper understanding of how energy efficiency and sustainable practices can positively influence property values, utility costs, and overall environmental impact. This knowledge enables them to educate buyers and sellers about the long-term benefits of green homes and make informed recommendations based on their clients' preferences and priorities.
By obtaining the NAR's Green Designation, real estate agents position themselves as trusted experts in the green real estate market. They possess the skills and insights needed to effectively market and promote environmentally friendly properties, giving them a competitive advantage in meeting the demands of today's eco-conscious buyers.
By obtaining the SRES designation, real estate agents demonstrate their commitment to serving the senior community with compassion, professionalism, and expertise. They become trusted advisors who can provide invaluable support and guidance to seniors as they navigate the complexities of real estate decisions during important life stages.
5. Seniors Real Estate Specialists (SRES)
The Senior Real Estate Specialist (SRES) designation is specifically designed for real estate agents who specialize in selling homes within age-restricted communities. This certification equips professionals with the necessary knowledge and skills to assist seniors in making important real estate decisions during significant life transitions.
SRES candidates undergo comprehensive training that encompasses various aspects of buying, selling, relocating, and refinancing residential and investment properties. They gain expertise in understanding the unique needs and challenges faced by seniors in the real estate market.
One of the key focuses of the SRES designation is helping seniors navigate life-changing decisions related to their real estate assets. Agents learn how to provide guidance and support in areas such as retirement planning, pensions, and addressing potential concerns like loan fraud. By understanding the specific needs and concerns of seniors, SRES professionals can offer tailored solutions and expert advice that cater to their unique circumstances.
Furthermore, SRES agents develop a deep understanding of the nuances and regulations surrounding age-restricted communities. This knowledge allows them to effectively market and sell homes within these communities, ensuring that seniors receive the specialized assistance they require throughout the transaction process.
NAR real estate certifications
NAR real estate certifications provide agents with specialized knowledge and skills to excel in various niche markets. These certifications offer unique opportunities for professional growth and specialization. Differentiating from designations, certifications typically involve annual dues and an application fee, while some designations may not require these fees.
At Home With Diversity® (AHWD):
The AHWD certification focuses on multicultural populations, promoting diversity sensitivity, understanding U.S. fair housing laws, and establishing professional guidelines in an increasingly diverse real estate market. This certification equips agents to effectively serve clients from different cultural backgrounds and navigate the nuances of a multicultural society.
Luxury Home Certification (LHC):
The Luxury Homes Certification enhances agents' abilities to thrive in the dynamic luxury home market. Agents with this certification gain expertise in the luxury niche, including pricing strategies, negotiation tactics, and developing a distinctive professional identity that sets them apart in the industry.
Military Relocation Professional (MRP):
The MRP certification prepares agents to assist military professionals and their families during relocation. The coursework covers essential topics such as VA financing, understanding the unique procedures and decision-making processes associated with military relocations, and guiding clients towards suitable housing options.
Resort & Second-Home Property Specialist (RSPS):
The RSPS certification caters to agents representing clients interested in purchasing or selling second homes and resort properties. This certification equips agents with the knowledge and skills needed to understand the specific needs and considerations of clients such as retirees, vacationers, property managers, and investors in the resort and second-home markets.
By obtaining these NAR real estate certifications, agents can demonstrate their commitment to professional development and specialization. These certifications provide agents with a competitive edge in their respective markets and enable them to serve their clients with expertise and confidence.
"The role of a buyer's agent is to collaborate with listing agents and help clients identify suitable properties, whether they are on or off the market. They guide them through negotiations, securing the best terms and contingencies in this highly competitive market. Many buyer's agents, possess the Accredited Buyer's Representative Designation issued by the National Association of Realtors®.
Essential categories of real estate agents to be aware of
In the realm of real estate, there are distinct roles on both the seller and buyer sides of the transaction. Within these sides, various agents and agency subtypes exist, serving specific purposes and representing different interests. Here are the important subtypes to know:
Listing agents/seller's agents:
Listing agents, also known as seller's agents, work on behalf of clients who want to sell their properties. Their primary objective is to safeguard their clients' best interests and negotiate the optimal price for the seller within the shortest time frame.
How effective listing agents assist sellers:
Determine appropriate listing prices through comprehensive market analysis of comparable properties with similar attributes.
Promote listings through the Multiple Listings Service (MLS) database and other real estate advertising platforms.
Devise successful marketing strategies to attract potential buyers.
Offer staging recommendations to enhance buyer appeal and suggest upgrades that increase the value of the property.
Coordinate showings and organize open houses.
Connect sellers with reliable contractors and professional contacts.
Negotiate with buyer's agents to safeguard the seller's interests, including providing advice on escalation clauses and appraisal guarantees.
Provide viable solutions when challenges arise during the transaction.
Buyer's agents: Buyer's agents represent and advocate for buyers, ensuring their interests are protected. They assist clients in finding homes that align with their preferences and skillfully negotiate offers to secure properties, particularly in competitive markets.
Designated agent:
A designated agent or agency occurs when one agent or brokerage represents the seller's interests while another represents the buyer's interests. In a typical real estate transaction, one agent represents the seller and another represents the buyer. However, exceptions can arise.
"While it's not the norm, there are instances where an unrepresented buyer may come through an open house or inquire via a sign call, leading to a dual agency scenario where the agent acts as a facilitator between the seller and buyer," he explains.
Dual agent:
A dual agent or dual agency occurs when the same real estate agent or agency represents both the buyer and seller. Transaction brokers may represent both parties but not in a fiduciary capacity. Dual agency is considered a conflict of interest and is prohibited in eight states. However, some of these states may allow certain exceptions.
Most agents handle both sides unless they operate within a team structure that prohibits it.
Working with someone experienced in both buying and selling properties can be advantageous since they understand what sellers seek and buyers require. This knowledge allows clients to perceive it as a win-win situation, ensuring a successful transaction and leaving everyone feeling satisfied.
Other potential benefits of dual agents and agencies include:
Strengthened communication between buyers and sellers, as there is a single primary contact.
Access to more detailed property information for buyer's agents compared to agents exclusively working on the seller's side.
Some dual agents may accept reduced commissions, resulting in cost savings for sellers.
Tips for locating a top-notch real estate agent
When embarking on the search for a real estate agent, it's crucial to find a professional who excels in their field and has a proven history of success. The last thing you want is to entrust your property to an agent who fails to generate interest and languishes on the market. When evaluating agents, it's essential to assess their sales records and performance.