At the height of the Great Recession, the most Googled job search was for real estate agent. And why not? The job offers flexibility and the opportunity to build a business within a well-defined existing framework. What new agents find, though, once they’re in the industry is that “real estate agent” isn’t a one-size-fits-all job description. There are many different types of real estate agents and a host of ways to make your mark on the industry.
Whether you’re a brand-new agent who’s launching a real estate career or a more experienced agent who’s looking for a way to better define and market your services, learning about the different types of real estate agents — and carving your own individualized path — is an important part of growing your business while increasing your effectiveness.
What are real estate agents?
Real estate agents are licensed professionals who represent various parties in a real estate transaction. In order to be authorized to work as an agent, the licensee must be affiliated with a brokerage, which is headed up by a managing broker or broker-owner.
The real estate agent, then, serves as a representative of the broker and the brokerage. This is where the idea of “hanging your license” comes from — a time when a real estate agent’s license would literally be framed and displayed on the wall of their brokerage.
What is a Realtor?
The term “Realtor” is often used interchangeably with the terms real estate agent or broker. In reality, however, Realtor is not just a generic term for a real estate professional. It has a specific, trademarked use and should only be used in accordance with its particular purpose.
The term Realtor is trademarked by the National Association of Realtors (NAR), a real estate industry trade group. Just as with many other trademarked brand names and logos, use of the term Realtor and the NAR logo is highly regulated and controlled. The term Realtor properly only refers to members of NAR and can include both agents and brokers.
NAR provides additional information to help members ensure that they’re using the term Realtor correctly. If you’re in doubt, however, it’s best to use the terms real estate agent, real estate broker or real estate professional rather than Realtor when referring to yourself or others.
In addition, be very careful when using the term Realtor in marketing, branding or advertising. If you’re in doubt about your use of the term Realtor, contact NAR or your local association for specific guidelines and information.
What is a real estate broker?
There are many different types of real estate brokers, from managing brokers at franchise brokerages to independent brokers with their own brands to real estate professionals who become brokers in order to gain a higher level of knowledge and insight into the industry. Generally speaking, when we think about a real estate broker we’re thinking about someone in a position of leadership.
Real estate agents work on behalf of their managing broker or broker-owner, representing the client as a stand-in for the broker. The representation agreement clients sign is with the brokerage, not with the individual agent.
Besides providing the structure, services and the brokerage license that agents work under, a real estate broker may provide tech platforms, marketing collateral, plus training and education for the real estate agents within the brokerage. In addition, the broker supervises the individual real estate agent and ensures that they are up-to-speed on current laws and regulations.
Types of real estate agent specializations
While some real estate agents pride themselves on their generalist approach, others are more focused on particular niches or market segments. They may focus on a specific neighborhood, for instance, or work primarily with certain types of clients or properties like first-time homebuyers or luxury properties.
This may be especially true for real estate agents who work on teams. Those agents may need to serve a particular segment of the team’s client base, freeing up other agents to serve their specialized niche.
Here are a few of the specialties to consider if you’re thinking about niching down, along with a couple of other agent scenarios you may encounter as you’re building your business:
Listing agents or selling agents
This type of real estate agent focuses on marketing homes and representing homesellers. They may focus their lead generation efforts on geographic farming strategies that include direct mail, doorknocking and cold calling.
Often, real estate agents who head up teams take on the role of “rainmaker,” using their reputation to attract clients who are ready to list their property for sale. These listing agents may have more local name recognition and a more prominent community profile.
Listing agents need to have an extensive professional network and high-level marketing skills. They also need to have a cash reserve to fund marketing initiatives since they won’t see a return on their investment until after the property sells.
Working with homebuyers is generally more time-consuming than working with listing clients. For that reason, those who specialize in working with buyers may be younger or less experienced agents who are building their businesses. This is especially likely to be true for real estate team structures where more junior agents may work primarily with buyers.
As buying agents build their businesses and professional relationships, they generally begin to shift toward a more balanced ratio of buyers to sellers. Those real estate agents working with first-time homebuyers, for example, may keep in touch with them and eventually help them sell then buy as they move up to a larger home.
Agents operating under dual agency represent both homebuyers and homesellers. In large markets and large brokerages where there are many agents to go around, dual agency may be frowned upon as a conflict of interest.
However, in many markets, dual agency is a common practice. For example, many small towns may only have one real estate broker who represents both the buyer and seller as a matter of necessity. In some resort communities or downtown high-rise condominium or co-op buildings, one agent is considered the community “expert” and may frequently represent both buyers and sellers in the same transaction.
If a potential client asks you to act as a dual agent, you may choose to do so, if your broker does not object, or you may choose to refer them to a colleague in exchange for a referral fee.
One way to avoid dual agency is to appoint a designated agent to represent the other party to the real estate transaction. For example, if a home is listed with a brokerage and one of the brokerage’s listing agents is representing the homeowner, a buyer who comes in with no agent could be represented by an agent designated by the managing broker.
This way, everyone has their own representation for the transaction and can feel secure that they will receive fiduciary-level services with their best interests firmly at the forefront.
One of the perks of being a real estate agent is that you have the freedom to make your career whatever you want it to be. You can operate as a highly specialized agent or do a little of everything so that every day is completely different.