Reader Question: We are downsizing and considering different lifestyles once we sell our home. We do not recall the different kinds of real estate agents in the market today. Is it just us, or are there more kinds of real estate agents?
Monty’s Answer: There are more real estate agents with a specialized practice today than there were twenty or thirty years ago. Consumer behavior, competition, government regulation, technology, and innovation are the major factors that are driving change. More than ever before, consumers want lots of choices. The pizza aisle in a grocery store exemplifies consumer choices.
Something for everyone
Many service businesses specialize today. Shops that promote battery sales or an oil change are familiar. Brokerage models such as rent-a-desk, cut-rate, and for sale by owner agencies have been around for years. Some have achieved scale, which over time creates visibility. Some relatively new real estate concepts buy your house and sell it later, and exclusive buyer-only brokers do not accept listings. All businesses are still evolving, and with the internet, disruption is everywhere.
Credentials
All of these brokerage models require a licensed real estate broker to operate and take responsibility for protecting the real estate laws of the state(s) in which they conduct business. Some broker-owners act as a salesperson as well as managing the brokerage business, others do not list or sell but choose to manage the business. Individuals can obtain a broker license and not own a real estate company. The second type of license is the salesperson license. Individuals associated with an owner-broker or designated broker are issued this credential to act as the broker’s agent to list and sell real estate.
Ten types of real estate agents
Agents differentiate to gain market share, intensify knowledge, promote, conserve time, and allow them to work in a way they enjoy. This practice is known as niche marketing. Here are the common specialties in residential real estate – there may be more.
- Generalist – the anti-specialist, they turn away no business. They do not limit themselves in any way. A comparison in a different service may be an emergency room physician. They take what comes through the door. The majority of real estate agents are generalists.
- Listing agent – limit their practice to listing property. They do not work with buyers but focus their time and energy on helping sellers.
- Buyer agent – advertise as a buyer agent, but will take listings as well. May or may not utilize a buyer agency contract. They prefer working with buyers but do not want to limit opportunity.
- Exclusive buyer agent – limit their practice to buyer agency. They require a buyer agency agreement and will not accept listings. In large metro areas often work in a brokerage that does not take listings.
- Territorial agent – limit their activity by boundaries. In large high-density cities, sometimes by streets or individual blocks. The smaller the town, the fewer territorial agents.
- Property value agent – limit clients by price range. Can work in many markets, but most often found in larger cities with populations more than three-hundred thousand people. In smaller markets, lack of high-end inventory may necessitate flexibility in their brand-building identity.
- Property type agent – Many markets develop specialists based on location and type of property. Farm brokerage, vacation property, and apartment specialists abound. Many cities have neighborhoods with declining property values and agents that specialize in those areas.
- Team agent – Some agents form teams and pool their energies and expertise. From two people to groups of six people or more collectively can list and sell more real estate than an individual.
- Captive agent – Condominiums and home builders often will engage real estate agents who work exclusively for the developer, and no one else.
- Unlicensed agent – practicing real estate without a license is illegal, but that does not mean imposters do not exist. The increase in real estate teams may elicit more complaints. An internet search for “posing as real estate agents” will reveal that unauthorized activity is not so uncommon.
Choose your agent carefully
There are advantages and disadvantages to all the real estate marketing specialties. Rely on your circumstances, motivation, and life experiences when considering who, how, and when to engage an agent. Take the time to talk with multiple agents, test them, validate their statements and the information they provide as part of the selection process, then choose wisely. The most important attributes to look for are honesty, knowledge, and efficiency.