Key Takeaways
Real Estate Agent
A real estate agent is a licensed professional who helps people buy, sell, or rent property. Agents guide clients through pricing, negotiations, paperwork, and closing logistics. They are typically paid through a commission — a percentage of the home's final sale price — rather than an hourly fee.
Agents must hold a state-issued license and operate under the supervision of a licensed broker. A Realtor® is an agent who is also a member of the National Association of Realtors and bound by its Code of Ethics.
The Two Sides of a Real Estate Transaction
Every home sale involves at least two parties with different goals: a seller who wants the highest possible price, and a buyer who wants the best value. Real estate agents serve one of those sides — sometimes both, in limited circumstances — and their job is to advance their client's interests throughout the process.
A listing agent (seller's agent) takes on pricing strategy, professional photography, MLS listing, open houses, offer review, and negotiation on behalf of the seller. A buyer's agent searches for suitable properties, arranges showings, interprets market data, drafts purchase offers, and negotiates repairs or concessions after inspection.
Both agents are also transaction coordinators: they track contingency deadlines, liaise with title companies, coordinate with lenders, and push the deal toward closing. If you want a fuller picture of that end-to-end process, see our walkthrough of the American real estate transaction.
“The agent's job isn't just to open doors — it's to know what questions to ask, what clauses to negotiate, and when to walk away. That judgment is what buyers and sellers are really paying for.”
— National Association of Realtors Consumer Guide, Industry consumer education resource
How Agent Commissions Work — and What Changed in 2024
For decades, the norm in US real estate was a combined commission of roughly 5–6% of the sale price, paid by the seller and split between the listing agent and buyer's agent. A $400,000 home could mean $20,000–$24,000 in commissions, absorbed into the proceeds.
A 2024 settlement involving the National Association of Realtors restructured this system. Sellers are no longer required to offer compensation to a buyer's agent through the MLS. Instead, buyer's agent compensation must be negotiated directly and disclosed in a written agreement before a buyer tours a home. This change increases transparency and gives buyers more say in what their agent earns.
Commission rates are — and always have been — negotiable. Some agents offer flat-fee or tiered services. Comparing what's included in a given agent's service before signing a representation agreement is always worthwhile.
~89%
Home buyers who used an agent in recent years
According to the National Association of Realtors' Profile of Home Buyers and Sellers, the vast majority of US homebuyers continue to use agent representation.
7%
Share of home sales that are FSBO
The NAR reports that For Sale By Owner transactions consistently represent a small minority of total US home sales, often involving known-party transfers.
5–6%
Historical combined commission rate
While total commissions historically averaged 5–6% of sale price, post-2024 rule changes have increased pressure on rates and opened greater room for negotiation.
What Agents Do That Isn't Obvious
Access to listings is no longer a compelling reason alone to hire an agent — most active listings appear on public-facing sites. The less visible value agents provide includes:
- Comparative market analysis (CMA): Agents pull recent comparable sales and active listings to help price a home accurately or evaluate whether an asking price is reasonable. See how sellers and appraisers weigh these factors in our article on pricing a home to sell.
- Negotiation: Experienced agents know when to push back on price, when to ask for closing cost contributions, and how to handle competing offers without losing leverage.
- Contingency management: They track inspection, appraisal, and financing deadlines so that client protections don't lapse unnoticed.
- Reading disclosures and paperwork: Purchase agreements run 10–20+ pages in most states. Agents help clients understand what they're signing without providing legal advice.
For buyers unfamiliar with listing language, our guide on reading a home listing without getting misled covers the vocabulary worth knowing before you even walk into a showing.
Always Review Your Representation Agreement
Before committing to an agent, ask for their buyer representation or listing agreement in writing. Review the duration of the contract, the commission rate, and whether it covers referrals to other agents. A good agent will walk you through it without pressure. For unfamiliar terms in any real estate document, our plain-language glossary of real estate terms is a useful reference.
When Going Without an Agent May Be Reasonable
Choosing to buy or sell without agent representation is legal in every US state. Whether it's sensible depends on your experience, the transaction's complexity, and your willingness to invest time in research and administration.
Scenarios where unrepresented transactions carry lower risk:
- Selling to a family member or close acquaintance at an agreed price, where the negotiation is already settled.
- An experienced investor completing a straightforward cash purchase in a market they know well.
- A seller in a very hot market with multiple competing buyers willing to cover appraisal gaps.
Scenarios that strongly favor professional representation:
- First-time buyers unfamiliar with offer terms, contingencies, or inspection processes.
- Any transaction involving unusual property types — estates, short sales, new construction contracts.
- Buyers relocating to an unfamiliar metro with no local market knowledge.
If you're still weighing whether homeownership makes sense at all, our piece on renting vs. buying a home in the US offers a grounded look at both paths.