The main function of agents and brokers is to assist buyers and sellers with the transaction of transferring property from one person to another. Because this is a regulated function, agents and brokers must be licensed by the state.

If you’ve decided to work with an agent in your homebuying process, it’s important to be aware of the different roles agents play.

The first thing you need to know is that all agents work for a broker. The broker is ultimately responsible for all transactions, and shares in all commissions. Real estate agents can assist you in several ways:

• A seller’s agent (or listing agent) represents the seller, assists with setting the sales price, markets the property and helps with negotiations.
• A buyer’s agent represents the buyer, locates potential properties, assists with negotiations and protects the buyer’s interests.
• A dual agent represents both buyer and seller in the same transaction.
• A designated representation is a situation in which the buyer and seller are using the same broker.

Not all real estate agents are Realtors. Realtors are members of a trade association that requires its members to abide by certain standards and practices related to real estate transactions. This trade organization is national and usually has both state and local chapters (i.e., Virginia Association of Realtors and Northern Virginia Association of Realtors). "Real estate agent" is a generic term that can be used by anyone with a license to sell real estate.

You may also notice that some agents have other designations listed on their business cards such as CRS or GRI. The Certified Residential Specialist (CRS) designation recognizes professional accomplishments in both experience and education. The Graduate Realtor Institute (GRI) designation indicates additional training in many areas of real estate to better serve and protect clients.

Be sure to ask at the beginning of the process how the agent will be paid. In some areas, a buyer’s agent may charge the buyer an hourly rate that must be paid if a house is not purchased. “Fee for service” is another way an agent may be paid.

Typically, it doesn’t cost a potential homebuyer any money out of pocket to use a buyer’s agent. The seller pays a commission, or percentage of the sales price, to the seller broker at loan closing. The commission is then shared among the seller broker, seller’s agent, buyer broker and buyer’s agent.

Once you choose a buyer’s agent to represent you, you may be asked to sign a buyer broker agreement. This exclusive agreement outlines the duties and obligations of both parties, agency relationships, commissions and scope of duty.

Before signing an exclusive agreement with a real estate agent, be sure to read it carefully. This is a legally binding contract that locks you into working exclusively with that agent for the specified time period. If you find a house on your own, the terms of the agreement with your buyer broker, including payment, must still be met.