What a real estate agent is and what they actually do
A real estate agent is a person licensed by your state to represent buyers or sellers in property transactions. They do not own the property and do not work for the government — they work for a brokerage firm, which is the company that holds the license. The agent's job is to help you buy, sell, or rent property by handling paperwork, showing homes, negotiating offers, and connecting you with inspectors, lenders, and title companies.
Agents are paid by commission, which means they earn a percentage of the sale price only if the deal closes. On a home sale, the seller's agent and buyer's agent typically split a commission that ranges from 4 to 6 percent of the final price, though this varies by region and is negotiable. When you rent through an agent, the landlord usually pays the fee, though some rental agents charge tenants.
An agent's license is not the same as a broker's license. Brokers own or manage the brokerage firm and can hire agents to work under them. You will work with an agent, but that agent's brokerage is responsible for their conduct and compliance with state law.
Key Takeaways
- Real estate agents are licensed by the state and work for a brokerage firm, not directly for you unless you sign a contract that says otherwise.
- Agents earn commission only when a sale or rental closes, so they have financial incentive to complete the transaction but not necessarily to get you the best price.
- You can work with an agent who represents only you (a buyer's agent or tenant's agent), only the seller or landlord, or both — and this affects what information they can share with you.
- Licensing requirements, commission rates, and disclosure rules vary by state, so what is standard in one state may not explore in another.
- You do not have to use an agent to buy or sell property, though doing so without one means handling legal documents, negotiations, and marketing yourself.
How agent representation works — and who they actually represent
When you are buying a home, you can hire a buyer's agent to represent your interests. This agent works for you, not the seller, and is legally required to keep your financial information and negotiating strategy confidential. The buyer's agent shows you homes, helps you make an offer, and negotiates on your behalf. You do not pay this agent directly — the seller's agent and buyer's agent split the commission from the seller's proceeds.
When you are selling, you hire a listing agent (also called a seller's agent). This agent lists your home on the Multiple Listing Service (MLS), markets it, shows it to other agents' clients, and negotiates offers with buyers. The listing agent works for you and keeps your bottom-line price confidential.
A dual agent represents both the buyer and the seller in the same transaction. This is legal in most states but creates a conflict of interest — the agent cannot fully advocate for either party without betraying the other. Some states require written consent from both sides before dual agency is allowed. If you are buying and your agent also represents the seller, ask whether they are acting as a dual agent and what that means for your negotiating power.
In rental transactions, a tenant's agent or landlord's agent works the same way. Some agents work exclusively with landlords; others represent tenants. A few work both sides. Always ask who the agent represents before you share financial information or your top offer price.
How to find and hire a real estate agent
You can find agents through referrals from friends or family, by contacting a local brokerage directly, or by searching online directories. Major brokerages include RE/MAX, Keller Williams, Century 21, and Coldwell Banker, though independent brokerages and small firms operate in every market. When you contact an agent, you are not obligated to hire them — you can interview multiple agents and choose the one who fits your needs.
Before you hire an agent, ask for their license number and verify it with your state's real estate commission or licensing board. You can look up whether they have complaints filed against them, though not all states make this information public. Ask how long they have been licensed, how many transactions they have closed in your area, and whether they specialize in buying, selling, or rentals.
When you decide to work with an agent, you will sign a contract. For buyers, this is usually a buyer representation agreement, which says the agent represents you and you agree to work with that agent for a set period (often 90 days). For sellers, this is a listing agreement, which authorizes the agent to list your home and sets the commission rate. Read these contracts carefully — they spell out what the agent will do, how long the agreement lasts, and what happens if you want to end it early.
You can also work with an agent without signing a representation agreement, though this is less common. In that case, the agent may represent the other party (the seller if you are buying, or the buyer if you are selling), and you should assume anything you tell them will be shared with their client.
What agents can and cannot do
Agents can show you homes, explain listing details, help you understand the local market, write offers, negotiate terms, and coordinate inspections and appraisals. They can also refer you to lenders, inspectors, title companies, and attorneys — though they cannot require you to use any specific vendor.
Agents cannot give you legal information, even if they have worked in real estate for decades. If you need information on contract terms, property rights, or tax implications, you must hire an attorney. Some states require that sellers be told they can hire an attorney; others do not. Agents also cannot appraise property, inspect it, or tell you what a home is worth — they can only give you a comparative market analysis (CMA), which shows what similar homes sold for recently.
Agents cannot discriminate based on race, color, national origin, religion, sex, familial status, disability, or sexual orientation. This is federal law under the Fair Housing Act. If an agent refuses to show you homes in a certain neighborhood, steers you toward or away from certain areas based on protected characteristics, or makes discriminatory comments, you can file a complaint with the U.S. Department of Housing and Urban Development (HUD) or your state's fair housing agency.
Agents also cannot may provide a sale price, promise that your home will sell by a certain date, or tell you that you will definitely get a loan. These are predictions, not facts, and making false promises can result in license suspension or revocation.
Commission, costs, and negotiating agent fees
The commission rate is negotiable. Standard rates in many markets are 5 to 6 percent of the sale price, split between the listing agent and buyer's agent, but you can negotiate this when you sign the listing agreement. Some agents charge flat fees instead of percentages, and some brokerages offer lower rates for high-volume sellers or for homes in certain price ranges.
As a buyer, you do not pay the agent's commission directly — it comes from the seller's proceeds. However, this does not mean the agent's fee is free to you. The commission is built into the sale price, so negotiating a lower commission can indirectly lower the price you pay. Some buyers negotiate with their agent's broker to reduce the buyer's agent commission before making an offer.
As a seller, you pay the commission from the sale proceeds. If your home sells for $400,000 and the commission is 5 percent, you pay $20,000 total — typically $10,000 to your listing agent's brokerage and $10,000 to the buyer's agent's brokerage. The agent does not keep all of this; the brokerage takes a cut, and the agent's share depends on their experience and the brokerage's split.
In rental transactions, the landlord usually pays the agent's fee, which is often one month's rent or a percentage of the annual rent. Some rental agents charge tenants a fee equal to one month's rent or a percentage of the lease value. Ask who pays before you sign anything.
When you might not need an agent
You can buy or sell property without an agent. For-sale-by-owner (FSBO) sales are legal in all states. If you sell without an agent, you handle marketing, showing, negotiating, and paperwork yourself. You save the commission, but you also lose the agent's market knowledge, access to the MLS, and negotiating experience. Many FSBO sellers end up hiring an agent partway through because the work is more complex than expected.
If you buy a FSBO home, you can still hire a buyer's agent to represent you. The seller may not have agreed to pay buyer's agent commission, so ask your agent whether they will work for a reduced fee or whether you will need to pay them directly.
Some people use discount brokerages, which charge lower commissions (often 1 to 3 percent) in exchange for fewer services. These brokerages typically list your home on the MLS and handle paperwork but do not provide marketing, staging information, or as much negotiating support. Discount brokerages work well for sellers who know the market and are comfortable with a hands-on approach.
Red flags and how to protect yourself
Be cautious of agents who pressure you to sign a representation agreement when ready, who refuse to answer questions about their experience, or who may provide a specific sale price or timeline. These are signs the agent may not have your best interests in mind.
If an agent asks you to sign a blank contract, to waive inspections or appraisals, or to make an offer without seeing the property, do not do it. Legitimate agents will never ask you to do these things.
If you feel an agent is not serving you well, you can end the relationship. For buyers, this usually means waiting for the representation agreement to expire or negotiating an early termination. For sellers, you can fire a listing agent, though you may owe commission if the agent brought the buyer (this depends on your contract). Read your agreement to understand the termination clause before you sign.
If you believe an agent has violated fair housing law, discriminated against you, or committed fraud, file a complaint with your state's real estate commission. You can also file a complaint with HUD if the issue involves fair housing discrimination. These complaints are investigated, and violations can result in fines, license suspension, or revocation.
Frequently Asked Questions
Do I have to use a real estate agent to buy or sell a home?
No. You can buy or sell without an agent, though you will handle marketing, showing, negotiating, and paperwork yourself. Many people hire an agent because the work is complex and time-consuming, but it is not required by law.
What is the difference between a real estate agent and a real estate broker?
A broker is licensed at a higher level and owns or manages a brokerage firm. Agents work for brokers. You hire an agent, but the broker is responsible for the agent's conduct and compliance with state law. Some brokers also work directly with clients as agents.
Can I negotiate the commission rate?
Yes. Commission is negotiable on both the listing side and the buyer's side. You can discuss rates with the agent or broker before you sign a representation agreement. Some agents offer flat fees or reduced rates for certain situations.
What should I do if I think my agent is not representing my interests?
Talk to your agent first and explain your concerns. If the issue is not resolved, you can end the representation agreement (check your contract for termination terms) or file a complaint with your state's real estate commission if you believe the agent violated licensing laws.
Is it legal for one agent to represent both the buyer and the seller?
Yes, in most states, though it creates a conflict of interest. Dual agency is legal if both parties consent in writing. Some states restrict or prohibit it. Ask your agent whether they represent both sides and what that means for your negotiating position.