The home-buying/selling experience is a deeply personal one. After all, this could be the biggest transaction you ever make. A real estate agent can help simplify confusing paperwork, connect you with the right buyers/sellers, work out deals, and reduce your anxiety about the entire process.

But even though working with an agent is the norm for just about everyone, you technically don’t need a real estate agent to buy (or sell) a home. Any home owner can list their property for sale. So, is hiring a real estate agent the right move for you? Read on to learn more.

Agents vs. brokers vs. realtors

If you decide on using an agent, it’s essential to work with the right person. Many buyers use an agent that was referred to them by a friend, neighbor, or relative or one they have worked with in the past. It’s always a good idea to interview several candidates before picking one that best suits you.

It’s also important to note that all realtors are real estate agents, but not all real estate agents are realtors. So let’s start with some quick vocabulary:

A real estate agent is someone who has completed training, passed the required state exams, and is licensed to represent a buyer or seller in a real estate transaction.

A real estate broker is also an agent but has a higher level of education and has passed additional exams.

A realtor is an agent or broker who belongs to the National Association of Realtors (NAR). This person has pledged to uphold a very specific set of ethics — like putting the buyers’ and sellers’ interests first — to become a member of this industry organization.

The best fit is completely up to you. One candidate might have more experience but charge a higher commission. Another might have less experience, but truly understands what you’re looking for in a home.

Working with an agent

If you’re a first-time buyer/seller, an agent’s knowledge, experience, and professional network could help you better navigate the process.

First-time home buyers make up about 33% of all house shoppers. Millennials, the largest group of first-time buyers, say paperwork and understanding the process are the two most complicated parts of buying a new home. And across all generations, 56% say finding the right home is the toughest part.

Lucky for you, these are all parts of the process that real estate agents are trained to handle.

For buyers, agents search through listings to find the homes that meet your criteria and help you weigh the pros and cons of each residence you consider.

A good agent will also have a large network and know of homes that haven’t hit the market. The best homes in hot markets will go fast, so having a leg up on your competition could make all the difference.

Their network might also include professionals in home-related fields like construction, interior design, and home financing. Ally Home offers competitive interest rates on both fixed-rate and adjustable mortgages.

Found a home you love but it’s priced higher than what you’re willing to spend? Agents also help negotiate the price for you. Your agent can work with the seller’s agent (or the sellers themselves) to get you a house for a fair price.

Sellers can use real estate agents, too. Whether you’re upgrading your digs or downsizing to something that’s more manageable, your agent will work to bring serious buyers through your doors, potentially minimizing the amount of time your home is on the market (and the number of days you have to keep your home completely spotless).

A seller’s agent also helps with both open houses and private showings and will negotiate on your behalf with potential buyers.

Real estate agents put in a lot of time and effort so you don’t have to.

For their work, they typically charge about 6% of a home’s sale price. So on the sale of a median, agent-assisted $265,000 home, that means they receive a commission of about $16,000.

This commission is usually split between the buyer’s and seller’s agents. And while the sellers typically “pay” both agents, oftentimes that fee is worked into the listing price of the home, meaning the buyer essentially pays the bill.

For sale by owner

If you’re looking to save on commission fees or sell your home quickly (maybe to someone you know?), then going the for-sale-by-owner (FSBO) route could be a good strategy.

FSBO is less common, but it could help you put that “sold” sign in the yard faster than if you use a realtor.

The home buying/selling process can be unpredictable. It takes an average of 10 different house tours and 10 weeks for buyers to find the right house. But last year, 73% of FSBO homes sold in less than two weeks — faster than agent-assisted homes — largely because the seller knew the buyer.

If you don’t already know a potential buyer, you’ll need to be a smart marketer to get the word out about your house to the right people. That means signage, web listings, flyers, open house setups, and more. Be prepared to pay out of pocket for most of those expenses, too.

You’ll also need to price your house, a task that FSBO sellers say is the most difficult part of the process (followed by understanding all the paperwork).

While FSBO homes typically sell faster, they also sell for less. FSBO homes sold for a median of $200,000 last year, compared to a median of almost $265,000 for agent-assisted ones.

Required: A bit of D.I.Y.

Even if you work with a real estate agent, there will be parts of the home-buying process you’ll need to do yourself.

“Is this a safe neighborhood?” might be one of the first questions that pops into your mind when house hunting. Problem is, your agent can’t exactly answer that.

The Fair Housing Act of 1968 aims to prohibit housing discrimination based on race, color, national origin, religion, sex, disability, or family status.

Seemingly innocuous questions like “Is this a good place to raise a family?” or “How good are the schools here?” could be seen as discriminatory, and legally, your agent can’t answer them.

Instead, you’ll need to do some research on your own.

You can find demographic information, school rankings, and crime statistics (by zipcode) by conducting a search online.

Closing time

Whether you’re sold on working with an agent or not, your home buying and selling dreams can be a reality. Depending on your needs and how much effort you want to put into the buying or selling process, a real estate agent could provide the assistance you’re looking for. But for others, an agent might not be worth the cost or the time involved.

Just like you know your dream home when you see it, once you understand the work of a real estate agent, you’ll know whether or not you need one.

Get pre-qualified to kickstart the home-buying process.