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Questions for the Realtor® when buying

Real estate agent speaking with home buyersReal estate agents represent buyers and sellers in real estate transactions. Real estate agents are required to be licensed by the state that they work in. Realtors® are real estate agents who are members of the National Association of Realtors®. Here are frequently asked questions (and answers) about real estate agents.

Are real estate agents independent contractors?

Most real estate agents are employed as independent contractors. This means that the real estate agent is classified as self employed for IRS purposes. Most real estate agents are paid a commission for a property sale or a sold listing. The typical agent is not paid a salary and is unlikely to receive employment benefits like health insurance, retirement, 401k, etc.

Are real estate agents Realtors®?

Real estate agents who join the National Association of Realtors® are allowed to use the Realtor® designation and title. The affiliation with the Realtors® organization requires real estate agents to abide by the Realtors® code of ethics and other policies of the National Association of Realtors®.

Are Realtors® free?

Realtors®/real estate agents are usually free to buyers, and are paid a commission from the proceeds from the sale of a home or residential property. The Realtor® compensation is typically stated in the buyer's/seller's agreement.

Can a real estate agent represent buyer and seller?

The industry term for joint representation is called "dual agency". Most states will permit dual agency provided that the buyer and seller are informed that they are both represented by the agent. The dual agency consent is often set in writing. Dual agency can reduce the cost to the seller and indirectly to the home buyer because only one real estate agent is involved in the transaction.

Can real estate agents sell their own home?

In Pennsylvania, real estate agents are permitted to sell their own home, however, the buyer must be informed, in writing, that he or she is a licensed real estate agent. The reason for the written notification is that real estate agents have intricate knowledge that could give them an unfair advantage in the transaction. The Code of Ethics and Standards of Practice of the National Association of Realtors® states:

Realtors® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner's agent or broker. In selling property they own, or in which they have any interest, Realtors® shall reveal their ownership or interest in writing to the purchaser or the purchaser's representative.

Can real estate agents work in different states?

Real estate agents who meet the licensing and testing requirements are permitted to work in multiple states. Some states have reciprocity agreements. This means that if the agent is licensed in a state with a reciprocity agreement with another state, the agent is permitted to sell property in the state(s) that have a reciprocity agreement with the agent's home state.

Do real estate agents get a 1099?

Most real estate agents are classified as independent contractors for income tax purposes. This means real estate agents are considered self employed and receive a 1099 from their broker.

  • Do real estate agents get a salary - not usually
  • Do real estate agents get benefits - probably not
  • Do real estate agents get commission – usually

Do Realtors® help find apartments?

Some agents specialize in rentals, although, most agents avoid rentals because there is more money in selling than renting apartments.

Do Realtors® work on weekends?

Some Realtors® will show homes on the weekend and hold open houses, but most agents try to keep their work week from Monday to Friday.

Does changing Realtors® help?

It's not uncommon for buyers and sellers to become frustrated with their agent. If the real estate agent doesn't stay in touch and seems uninterested, change agents. Home buyers tend to expect too much from real estate agents. Real estate agents do not control the price of homes and they can only offer the buyer homes that are available. Home sellers are different then buyers. Home sellers are usually locked into a listing contract with a real estate agent. Before changing agents, home sellers should think about why their home has not sold. Is the price too high? Is the property cluttered, or in poor condition? Home sellers should always have a good, honest face to face conversation with their listing agent before listing their home with another Realtor. Once again, if the agent seems uninterested, find another agent who seems enthused about listing the home.

Should real estate agents attend the home inspection?

There are two schools of thought. Some agents believe that their obligation to the buyer and/or seller stops when the sales contract is signed by both parties . . . and they are right. The real estate agent's job is to bring buyer and seller together. Why should a real estate agent attend a home inspection when he or she may not have any background in construction? Most home inspectors want to inspect the home without the buyer and/or the agent looking over his shoulder. On the other hand, some agents want to be involved with every detail of the sale, including the home inspection. In general, buyers and sellers like having the agent present at the home inspection.

What Realtors® should know about mortgages

Real estate agents should be familiar with the minimum down payment and basic requirements of FHA, VA, USDA and conventional mortgages. Real estate agents should also be aware of any special financing programs in their state.

Who pays the real estate agent?

Real estate agents are usually compensated from the sale of a property, which is paid by the seller. Needless to say, buyers should ask the agent initially whether there will be a charge after there's an agreement of sale.