A real estate agent is a licensed professional who represents someone in a real estate transaction, but the scope of their responsibilities goes far beyond opening doors or hosting showings.
In this article, we explain what real estate agents do, how much they earn, the different types of agents, and whether you should hire one. We’ll also walk through the steps to becoming an agent if you’re considering a career in real estate yourself.
If you’re looking for help now, Clever Real Estate can help you connect with top-rated local agents who provide full service — and sellers can save thousands with a pre-negotiated 1.5% listing fee.
What is a simple definition of a real estate agent?
A real estate agent is a licensed professional who represents buyers, sellers, or renters in real estate transactions. They help clients price homes, search for properties, negotiate deals, complete paperwork, and navigate the legal and logistical steps involved in transferring real estate.
The day-to-day work is less about opening doors than people assume. “A skilled real estate agent protects a seller’s price, manages risk, and keeps the deal together long after the sign goes up,” says Madeline Boykins, SRES, a Realtor serving the St. Louis metro.
What do real estate agents do?
What real estate agents do for sellers
Listing agents handle the entire selling process from start to finish, offering pricing expertise, marketing, negotiation skills, and transaction management. Common responsibilities include:
- Pricing the home accurately. Agents prepare a comparative market analysis (CMA) to estimate your home’s value based on recent nearby sales, local trends, and current competition.
- Guiding prep and improvements. They recommend repairs, staging strategies, or inexpensive updates that can help your home sell faster and for more money.
- Marketing the property. Agents list the home on the multiple listing service (MLS), coordinate professional photos, host open houses, and promote the listing across major real estate websites and social media.
- Managing showings and communication. They coordinate tours, respond to buyer inquiries, and provide feedback so you understand how the market is reacting.
- Negotiating offers. Agents help you evaluate offers, negotiate price and terms, and advocate for your best interests throughout the process.
- Handling contracts and closing. They guide you through paperwork, inspections, appraisals, and timelines to ensure a smooth closing.
Late-stage surprises are where listing agents earn their keep. “Lenders will do a last-minute credit pull on the buyers — if buyers have made a large purchase, it can affect their debt-to-income ratio and cause the transaction to terminate,” says Terri Foote, a Realtor serving the Charlotte and Lake Wylie metro across NC and SC. “Another complication is a low appraisal. If there’s a discrepancy, the seller will sometimes be agreeable to price the home to meet the appraisal gap.”
What real estate agents do for buyers
Buyer’s agents help clients find the right home and navigate the complexities of making an offer and closing a deal. They typically:
- Identify suitable homes. Agents filter listings based on your needs, budget, and preferences, sometimes accessing homes before they hit the market.
- Spot red flags. They recognize potential issues with a property’s condition, pricing, or resale value.
- Write and negotiate offers. Agents help you craft competitive offers, negotiate pricing and concessions, and structure terms that protect your interests.
- Coordinate inspections and due diligence. They assist in scheduling inspections, reviewing reports, and advising next steps.
- Manage paperwork and timelines. Agents ensure deadlines are met and documents are completed accurately to avoid delays or legal issues.
Buyer's agents and the NAR settlement
How buyer’s agents get paid changed in August 2024. Buyers now sign a buyer’s agency agreement upfront that spells out how their agent will be compensated, and listing agents can no longer advertise buyer-side commission on the MLS. Sellers may still cover the buyer’s-agent fee through a concession negotiated as part of the deal — but it’s no longer the default. For the full breakdown of what changed and what buyers should ask about up front, see the NAR settlement explainer.
In practice, the upfront agency agreement forces a conversation that used to happen by default. Buyers now negotiate a percentage with their agent before touring — typically 2.5–3% — and then have to figure out who’s covering it.
If the seller offers a concession, the buyer can roll it into the sale. If not, the buyer either pays the gap at closing or negotiates the agent’s rate down. On a $500,000 home with a 2.5% buyer’s-agent fee and no seller concession, that’s $12,500 the buyer needs in cash on top of the down payment — a number you want to surface before you fall in love with a house, not after.
What real estate agents do for renters
Some markets rely heavily on rental agents to help renters find available homes or apartments. Rental agents may:
- Match renters with appropriate properties. They help renters find units that fit their budget, needs, and location preferences.
- Coordinate showings. Agents schedule and host property tours for prospective tenants.
- Help with applications and approval. They assist renters with paperwork, screening requirements, and negotiating lease terms.
What do real estate agents make?
According to the U.S. Bureau of Labor Statistics, real estate sales agents earn a median annual wage of $58,960, with the top 10% earning more than $115,000.[1]
Real estate agents earn money primarily through commissions — a percentage of the home’s sale price, paid when the transaction closes. They typically do not earn hourly wages or salaries, so their income depends on the number and size of the transactions they complete.
In the U.S., the current average commission rate is 2.88% for listing agents and 2.82% for buyer's agents.[2]
To put the percentages into real numbers, here’s what an agent could earn on a $500,000 home:
- At 2.5%, the agent would earn $12,500
- At 3%, the agent would earn $15,000
What most clients don’t see is the math behind the agent’s check. An agent’s income varies based on location, years of experience, number of transactions, specialty (residential vs. commercial), and their brokerage’s commission split. Newer agents often earn less because they close fewer deals, while experienced agents may earn significantly more — especially those who handle higher-priced properties or repeat referrals.
Commission rates can be lower if a client has leverage to negotiate fee reductions, like selling in a hot market or having a very desirable home.
On a $500,000 listing at 3%, a $15,000 gross commission can shake out to roughly $7,000–$9,000 in actual take-home after the split, expenses, and taxes. The better question isn’t “what’s the commission rate?” but “what does the agent actually do for it, and is the price reasonable for the service?”
Another option sellers have is to work with a low-commission brokerage. The top companies, like Clever Real Estate, guarantee rates as low as 1.5% while still offering full service from vetted agents. On a $500,000 house, that rate would save you $7,500 compared to 3%.
» Learn more about how commissions work and who pays.
Types of real estate agents
Real estate agent vs. Realtor
"Real estate agent" is a term for anyone with a license to arrange real estate transactions. "Realtor" is technically reserved for members of the National Association of Realtors (NAR), and written as REALTOR®, in all-caps, with the registered symbol.
NAR is a private trade association founded to advance the interests of real estate professionals. It currently has around 1.4 million members, more than two-thirds of all active U.S. real estate licensees.[3]
So many agents are members of NAR that the word "realtor" — with a lowercase "R" — is often used as a generic term for real estate agents. However, officially, an agent must join NAR to become a REALTOR®.
In addition to the right to use the REALTOR® trademark, members receive benefits like access to exclusive tools and resources, networking opportunities, professional development, and group rates on insurance and other products.
Although most agents are REALTORS®, NAR is a private organization — not a licensing board. Membership is not necessary for an agent to practice real estate. Moreover, REALTOR® membership is open to any real estate professional, including non-agents.
Real estate agent vs. broker
A real estate broker is an agent with an "upgraded" license that authorizes them to perform certain duties agents with "basic" licenses can't, including opening their own brokerage and supervising other agents.
Broker licenses require additional education and experience compared to entry-level licenses. While new agents can typically get licensed after spending as few as 40 hours in a classroom and passing an exam, aspiring brokers must work as a full-time agent for multiple years before they're eligible to sit for the licensing exam.
Note: In some contexts, "broker" may mean "real estate brokerage" — a company that mediates real estate transactions between buyers and sellers.
For most transactions, the realtor-vs-agent or agent-vs-broker distinction doesn’t change the outcome. Buyers and sellers care about competence — pricing, negotiation, follow-through — not membership status or license level.
The broker license matters more when you’re thinking about who’s supervising the agent. Brokers carry the regulatory responsibility, hold trust accounts, and are usually the ones who handle complaints if a deal goes sideways. If your agent is newer or part-time, knowing who their supervising broker is — and that the broker is actually involved — can be helpful.
Real estate agent vs. salesperson
There’s no practical difference between a real estate agent and a real estate salesperson — the terms are interchangeable.
Both refer to entry-level license holders who are authorized to assist clients with buying and selling real estate, but who must work under the supervision of a licensed broker.
Most states technically use the word salesperson for this license type, but in everyday language, people almost always say real estate agent. Agents/salespeople can’t work independently; they must affiliate with a broker, brokerage, or real estate agency.
The key distinction is between an agent/salesperson and a real estate broker.
Brokers hold a more advanced license, have additional experience and education, and are allowed to work independently, supervise agents, and often own or manage brokerages. Many agents remain in the salesperson role throughout their careers, while others eventually upgrade to a broker license to take on leadership or management responsibilities.
Real estate agent specializations
Real estate is a broad career field, so many experienced agents choose to specialize in a particular niche.
Here are some common specialties and relevant certifications:
- Luxury home specialist — Certifications like the Certified Luxury Home Marketing Specialist (CLHMS)
- Commercial real estate agent — May pursue CCIM (Certified Commercial Investment Member) training
- Buyer specialist — Accredited Buyer’s Representative (ABR)
- Seller/listing specialist — Seller Representative Specialist (SRS)
- Relocation specialist — Certified Relocation Professional (CRP)
- Green or energy-efficient homes — NAR’s Green Designation
- Property management — Certifications like CPM (Certified Property Manager)
- Short sale and foreclosure — Short Sales and Foreclosure Resource (SFR
- Land and farm sales — Accredited Land Consultant (ALC)
- Senior real estate specialist — Seniors Real Estate Specialist (SRES)
The Seniors Real Estate Specialist (SRES) designation means the agent has experience navigating downsizing, reverse mortgages, and estate transitions — not just selling to older clients. If you’re handling an estate sale, a multigenerational move, or a probate situation, hiring someone with the actual specialization usually pays back in the first negotiation.
Representation
The type of agent can also depend on who they represent in the transaction:
- A listing agent represents the seller's interests exclusively.
- A buyer's agent represents the buyer's interests exclusively.
- A dual agent represents both the seller and buyer in one single transaction. This isn’t something that is usually set up ahead of time. Instead, dual agency typically happens by chance, when a listing/seller’s agent ends up finding a buyer for their client. Thus, in the transaction involving that one property, the agent becomes a “dual” agent.
- Designated agency means that, within one transaction, the seller’s agent and the buyer’s agent are both represented by the same agency or brokerage. This is different from dual agency, where one agent represents both sides of a transaction.
- A transaction agent mediates a transaction between the seller and buyer but officially represents neither of them.
Do I need to hire a real estate agent?
Hiring an experienced real estate agent is wise whenever you buy or sell a home. Real estate transactions are complex financial decisions, and having an expert to guide you greatly increases your chances of a smooth, successful outcome.
When an agent is clearly worth it
- First-time buyer or seller. The cost of a missed contingency, a wrong list price, or a blown inspection negotiation usually exceeds the commission you’d save going it alone. Process knowledge is the product you’re paying for.
- Complex transaction. Probate, divorce, multi-offer scenarios, contingent purchases, out-of-state moves, estate sales. These involve procedural and legal exposure that a good agent (paired with an attorney where required) manages every week.
- Unfamiliar market. Moving to a new metro, buying a vacation home, or selling rural land or luxury property — local pricing, comps, and buyer pool dynamics are different enough that outside the agent is doing real work, not just opening doors.
When you can reasonably skip an agent
Not every situation calls for a 5–6% commission. Three cases where skipping makes sense (or at least deserves a real conversation with a real estate attorney):
- Selling to a known buyer. Family member, neighbor, or a tenant who has offered to buy at a pre-agreed price. The agent’s role is mostly paperwork, and a real estate attorney can usually handle that for a flat fee.
- Simple cash transaction with attorney support. Common in some markets and price ranges, especially when both parties are experienced. Attorney handles docs, title coordinates closing, no MLS marketing required.
- Hot seller’s market with a desirable, easy-to-price property. If you know your comps cold, can manage showings and offers yourself, and your home is the kind buyers compete over, FSBO is a real option. Rarer than people think — but real.
How to decide if you need an agent
Ask yourself these five questions before deciding:
- How complex is the transaction? Standard purchase or sale, or something with moving parts (probate, divorce, contingent purchase, multiple offers)?
- How well do you know the local market? Years in the area, recent comps awareness, sense of pricing trends — or new to the metro?
- How much time can you actually commit? Showings, negotiations, and paperwork add up to roughly 40–80 hours of work over a typical three-month transaction.
- What’s your risk tolerance for procedural mistakes? A missed contingency window or a mispriced listing usually costs more than full commission.
- Do you already have a buyer or seller lined up? If yes, the agent’s role shifts toward paperwork — and a real estate attorney may be the better hire.
The cost-benefit analysis
For buyers, an agent makes the process far easier. About 90% of buyers say their biggest challenges are finding the right home, staying on top of paperwork, or understanding the purchase process — all of which are simpler with a professional on your side. Plus, the seller still usually covers the buyer's agent fee, even after the NAR settlement changes.
For sellers, agents are an investment that often pays off. While selling your home yourself (FSBO) may seem cost-effective, FSBO sellers typically net a median of $55,000 less than those who work with agents.[4] Experienced agents help you price, market, and negotiate your home for maximum value, making their commission well worth it.
“Many FSBO sellers think they can make more money by selling the property themselves,” says John Blevins, a Realtor in the Tampa Bay area of Florida. “What they miss is that they really don’t have any idea how to price their property properly — many times they underprice it and leave money on the table. They also don’t understand the intricacies of real estate contracts. If they get a buyer from their for-sale-by-owner listing who is working with another real estate agent, the seller can easily be taken advantage of in the contract.”
We recommend finding ways to save on your home sale without cutting corners, including working with a top agent who offers a lower commission rate.
- Answer 5 simple questions about your sale
- Get matched with 2–3 top local agents in minutes
- Compare options, choose the best fit, save up to 50% on fees
How to become a real estate agent
Becoming a real estate agent involves completing state-required education, passing an exam, and affiliating with a licensed brokerage. While requirements vary by state, the overall process is similar nationwide.
Here’s a step-by-step breakdown:
- Meet your state's basic requirements. You’ll need to meet your state’s minimum age requirement (usually 18 or 19) and have legal authorization to work in the U.S. Some states also require a high school diploma or equivalent.
- Complete pre-licensing education. Before taking the licensing exam, you must complete a state-approved course that covers real estate law, contracts, financing, ethics, and other foundational concepts.
- Pass your state's licensing exam. This exam tests national and state-specific real estate knowledge. Many states allow multiple attempts, but you must pass both sections to earn your license.
- Find a broker who will “sponsor” your license. New agents must work under a licensed broker who provides supervision, training, and access to essential tools. Many brokerages offer mentorship programs for new agents.
- Submit your application and pay licensing fees. Once you complete your education and pass the exam, you submit an application to your state’s licensing board along with the required fees.
- Complete continuing education to maintain your license. Most states require ongoing coursework every renewal cycle to ensure agents stay current on laws, ethics, and market practices.
The hard part isn’t the license — it’s the income in year one. Most new agents pay for their own marketing, MLS dues, and lead generation while waiting for a first commission check that usually doesn’t land until 60–90 days after a property goes under contract.
A large share of licensees close zero transactions in their first year, and the median wage hides a wide spread between part-timers and full-time producers. The amount of time spent finding leads is the part most new agents underestimate. If you’re considering becoming a real estate agent, plan for 6–12 months of runway and treat the first two years as commission-only startup work.
State-by-state guide
To confirm the exact requirements in your state, use ARELLO’s regulatory directory — it links to every state’s real estate commission and license-lookup page.
The 50-state requirements table below covers pre-licensing hours, exam fees, application fees, and links to each state’s real estate commission — bookmark it if you’re comparing states or moving an existing license.
| State | Basic real estate license requirements |
|---|---|
| Alabama | License type: salesperson Age: 19 Education: 60 hours Learn more. |
| Alaska | License type: salesperson Age: 19 Education: 40 hours Learn more. |
| Arizona | License type: salesperson Education: 96 hours Learn more. |
| Arkansas | License type: salesperson Education: 60 hours Learn more. |
| California | License type: salesperson Education: 135 hours Learn more. |
| Colorado | License type: associate broker Education: 168 hours Learn more. |
| Connecticut | License type: salesperson Education: 60 hours Learn more. |
| Delaware | License type: salesperson Education: 99 hours Learn more. |
| District of Columbia | License type: salesperson Education: 60 hours Learn more. |
| Florida | License type: sales associate Education: 63 hours Learn more. |
| Georgia | License type: salesperson Education: 75 hours Learn more. |
| Hawaii | License type: salesperson Education: 60 hours Learn more. |
| Idaho | License type: salesperson Education: 90 hours Learn more. |
| Illinois | License type: broker Education: 75 hours Learn more. |
| Indiana | License type: broker Education: 90 hours Learn more. |
| Iowa | License type: salesperson Education: 96 hours Learn more. |
| Kansas | License type: salesperson Education: 60 hours Learn more. |
| Kentucky | License type: sales associate Education: 96 hours Learn more. |
| Louisiana | License type: salesperson Education: 90 hours Learn more. |
| Maine | License type: sales agent Education: Complete the Sales Agent Course Learn more. |
| Maryland | License type: salesperson Education: 60 hours Learn more. |
| Massachusetts | License type: salesperson Education: 40 hours Learn more. |
| Michigan | License type: salesperson Education: 40 hours Learn more. |
| Minnesota | License type: salesperson Education: 90 hours Learn more. |
| Mississippi | License type: salesperson Education: 60 hours Learn more. |
| Missouri | License type: salesperson Education: 48 hours Learn more. |
| Montana | License type: salesperson Education: 60 hours Must have completed 2 full years of high school Learn more. |
| Nebraska | License type: salesperson Age: 19 Education: 66 hours Learn more. |
| Nevada | License type: salesperson Education: 120 hours Learn more. |
| New Hampshire | License type: salesperson Education: 40 hours Learn more. |
| New Jersey | License type: salesperson Education: 75 hours Learn more. |
| New Mexico | License type: associate broker Education: 90 hours Learn more. |
| New York | License type: salesperson Education: 77 hours Learn more. |
| North Carolina | License type: provisional broker Education: the 90 hours of post-licensing education is intended to remove the "provisional" status and make the licensee simply a broker Learn more. |
| North Dakota | License type: salesperson Education: 45 hours Learn more. |
| Ohio | License type: salesperson Education: 100 hours completed at a 2-year institution Learn more. |
| Oklahoma | License type: provisional sales associate Education: 90 hours Learn more. |
| Oregon | License type: broker Education: 150 hours Learn more. |
| Pennsylvania | License type: salesperson Education: 75 hours Learn more. |
| Rhode Island | License type: salesperson Education: 45 hours Learn more. |
| South Carolina | License type: salesperson Education: 90 hours Learn more. |
| South Dakota | License type: broker associate Education: 116 hours Learn more. |
| Tennessee | License type: affiliate broker Education: 90 hours Learn more. |
| Texas | License type: sales agent Education: 180 hours Learn more. |
| Utah | License type: sales agent Education: 120 hours Learn more. |
| Vermont | License type: salesperson Education: 40 plus an 8-hour post-licensing course within 90 days of licensure Learn more. |
| Virginia | License type: salesperson Education: 60 hours Learn more. |
| Washington | License type: broker Education: 90 hours Learn more. |
| West Virginia | License type: salesperson Education: 90 hours Learn more. |
| Wisconsin | License type: salesperson Education: 72 hours OR 10 academic semester hour credits at an institution of higher learning in real estate or real estate–related law Learn more. |
| Wyoming | License type: salesperson Education: 68 hours Learn more. |
Frequently asked questions
Commercial agents help clients buy, sell, or lease properties used for business — office buildings, warehouses, retail centers, industrial sites. The work involves zoning analysis, investment underwriting, tenant requirements, and longer-cycle financial diligence. Commercial deals also move through different timelines and contracts than residential, and typically use letters of intent before binding agreements.
Agents spend their days prospecting for clients, scheduling showings, researching market data, preparing comparative market analyses (CMAs), coordinating inspections, handling paperwork, and communicating with lenders, attorneys, and other agents. Their schedules vary widely depending on client needs and transaction timelines.
Successful agents need strong communication, negotiation, and customer service skills. They must be organized, detail-oriented, tech-savvy, and knowledgeable about local markets. Problem-solving and the ability to manage multiple deadlines are also essential.
You can work with more than one real estate agent in certain situations. For example, you might use one agent to sell your home and another to buy a new one. However, if you’ve signed an exclusive contract, you can’t hire multiple agents for the same transaction without risking legal issues. Without an exclusive agreement, it’s technically possible to work with multiple agents, but agents may not like this arrangement, and it may limit your access to top-quality representation.
A real estate agent needs a broker if their real estate license does not authorize them to work independently. The majority of agents hold a "salesperson" license, which allows them to practice real estate only on a broker's behalf. Agents with broker licenses generally don't need to work for another broker. However, regulations vary between states, and some brokers choose to remain in salesperson roles even after upgrading their licenses.
