Can Real Estate Agents Represent Themselves?
In today’s competitive real estate market, who you work with matters — especially when it comes to buying and selling your own property.
But what if you don’t want to work with another agent and instead, are looking to represent yourself in a real estate transaction? While it is often legally allowed, if you’re considering getting a real estate license so you can buy and sell a property without working with another agent, there are some things to understand first.
If You're an Agent, Can You Represent Yourself?
The simple answer is yes - as a licensed agent, you can represent yourself in buying or selling real estate for yourself. But it’s not as easy as just getting your real estate license!
Just having a license is not enough to buy or sell your own property — you have to make sure you also are affiliated with a brokerage. To begin that process, you need to find a local real estate company, interview with them, and subsequently, get hired to hang your license there. Keep in mind that a brokerage will often take a percentage of the commission you receive in exchange for being affiliated with them.
If you’re planning to represent yourself, it’s important to look into each state’s legal requirements around buying and selling your own real estate as a licensed agent. Almost every state has laws that require agents to disclose their role and relationship to the property if they are planning to purchase it for themselves. Ensure that you fully understand what laws are in place so you can avoid any legal trouble during the process.
Why Would They Represent Themselves?
Despite the logistics and legal requirements, there are certainly benefits to representing yourself when buying or selling real estate.
Buyer’s agents generally split a 6% commission with a seller’s agent. When acting as your own buyer’s agent though, that 3% commission would go directly to you, resulting in potentially thousands of dollars back in your pocket instead of another agent. Keep in mind that by being associated with a brokerage, you will have to split your 3% with the commission based on the agreed split and also finance brokerage related fees.
Another benefit to representing yourself is cutting out the middleman to guarantee you have full control over the transaction. Generally, the paperwork, listing appointments, negotiating and more would funnel through your buyer’s agent. But by representing yourself, you can directly communicate and coordinate without relying on another agent who might be juggling multiple clients. Handling this on your own can be valuable if you are an effective communicator, and comfortable with the process.
Is Representing Yourself in the Real Estate Transaction a Good Idea?
Even if you are legally allowed to represent yourself in a real estate transaction, it might not always be a good idea. There are several factors to be cautious about when considering if you should represent yourself when buying or selling a property.
First off, consider how much experience you have — not only in the real estate industry but in the market you are transacting in. If you are a newer agent, you might not be familiar with the legalities, the Escrow process, disclosures, and documents required to ensure the transaction goes smoothly. If mistakes are made, or the correct processes aren’t followed, there could be legal and financial consequences to pay. If you’re new to the industry, ask yourself if this is a risk you’re willing to take.
Consider partnering with another agent if you are initially getting started in the real estate industry or are newly licensed. By splitting a 3% commission with a more experienced agent, you will have a mentor to guide you through the process, allowing you to learn but also earn some income from the transaction. From there, you’ll have some experience and knowledge for future deals where you can potentially pocket the full 3% commission on your own.
Enlisting the help of an agent that is familiar with the area can benefit you if you are moving to a new market, or looking to purchase in a neighborhood you might not be familiar with. Working with an agent who knows the nuances of the area will allow you to understand the pricing of the property and ensure important factors like safety, return on investment and any upcoming neighborhood developments are known before you purchase the home.
However, if you are a seasoned agent with previous experience, representing yourself carries fewer risks. You will save on commission while adding sales volume and transactions to your real estate portfolio. Just be sure to comply with state-wide real estate regulations and check with your managing broker or sales manager to confirm it’s permitted at your brokerages.
Even if you have real estate experience, buying a home is one of the largest investments you can make — and it often becomes emotional. It still might benefit you to work with another agent who can prevent any emotions from impacting decisions or actions taken in negotiations.
Should You Get a Real Estate License to Buy or Sell Your House?
There are certainly pros and cons to getting your real estate license with the sole purpose of buying or selling your own property. Aside from saving money, you can also grow your network and potentially discover a new career path.
If you’re ready to make the time and money investment into getting your license, consider how this will benefit you not only right now, but also in the future. Once you’re licensed and affiliated with a brokerage, you’re able to represent yourself, but also you can assist family and friends when they’re ready to buy or sell a property.
One thing to remember is that there are fees associated with keeping your license active. Unless you’re generating a regular influx of commission annually, having your license may be costing you more than it’s worth. If you’re going to go through the process of studying and passing the licensure exam, consider whether you want to explore this as a new career path!
Final Thoughts on Real Estate Agents Representing Themselves
Representing yourself in a real estate transaction can be a great opportunity to save money and take control of the transaction. If you’re considering getting your real estate license for this purpose, understand that while there are many benefits, it’s important to invest the time and energy to ensure you are properly educated and prepared for the transaction.
With the right experience and mindset, representing yourself in the real estate process is a rewarding way to utilize a skillset and potentially discover a new career path!
TL;DR: Real estate agents can represent themselves when they buy or sell a house. But, they must disclose they are an agent and choosing to represent themselves to the other party. For some people, representing yourself is a smart move but, for others, it could be a burden.