[Updated September 2026] The discussion of commissions below predates the 2024 settlement of the antitrust litigation against the National Association of Realtors. Under the practice changes that took effect in August 2024, a seller’s offer of compensation to the buyer’s agent can generally no longer be advertised through the MLS, and buyers are generally required to sign a written agreement with their agent – including what the agent will be paid – before touring homes. Commissions were always negotiable, as the article says; the settlement simply made that harder to obscure. Expect the “standard” percentages you hear quoted to keep moving.
Real estate law can be a complex and confusing area, with many different players involved in the buying and selling of property. As a real estate attorney in Texas, I work with realtors and other real estate attorneys regularly. One question that I am asked from time to time – usually by someone who is just breaking into the real estate game – is: what are the main differences between a real estate lawyer and a realtor, and how do I know when I need one vs. when I need the other?
There are many significant differences between the two, and they fulfill vastly different roles. In this article I will try to explain the most basic differences and give you some tips on dealing with each one.
A realtor is a licensed intermediary who acts as a go-between, connecting buyers and sellers in a real estate transaction.
A realtor’s primary role when representing a buyer is to help the buyer locate and view properties, generally through use of the Multiple Listing Service (MLS), which is something like a “proprietary Google for realtors,” as well as writing offers and negotiating the buyers’ side of any offers. There are many services that have aimed to replace realtors and their closely-guarded access to the MLS in this regard, such as Zillow, Redfin, and others. These alternatives have met with mixed success.
A realtor’s primary role when representing a seller is primarily as a marketer. The realtor will assist with various phases of the marketing of a property, including suggesting pricing for a property, arranging photography, videography, or staging of a property, listing a property on the proprietary MLS, negotiating the sellers’ side of any offers, arranging tours and open houses, and more.
Realtors often have a good understanding of the local real estate market and are often able to provide valuable advice on pricing, marketing strategies, and the buying or selling process. However, when engaging with a realtor on either the buy-side or the sell side, it behooves you to remember that realtors are generally paid by commission. Accordingly, they have a financial interest in getting a deal closed, and may be less likely to advise you to walk away from a bad deal.
Here are a few pitfalls to be wary of when considering a realtor:
- Realtors are not ethically prohibited from undertaking a “dual representation.” A “dual representation” means representing both buyer and seller in the same transaction. If this seems like a conflict of interest to you, you would be correct. Real estate lawyers, who are subject to much stricter ethical standards, are flatly prohibited from a “dual representation” based on this conflict of interest. Needless to say, we recommend against consenting to your realtor entering a “dual representation.”
- A realtor’s commission is always negotiable. Many realtors will present a commission as “fixed at 3%” but this is not the case. A realtor who really wants to work with you will generally be willing to reduce their commission. Fees tend to be especially negotiable on the sell-side, where nearly 100% of the effort and time is involved in the initial photography/listing.
- While realtors are often very knowledgeable about the real estate market, they do not have actual legal training with regard to contract law or other legal topics. Accordingly, you should exercise caution when the contract departs too much from the “standard form” that realtors work with. In other words, when a sophisticated counterparty with a custom contract comes to play, a realtor cannot help you.
- The quality of realtors is uneven. It generally takes 1 to 4 months to become licensed as a realtor in Texas, and a degree is not required. Compared to the 7 years (4 years undergraduate degree + 3 years doctoral degree) required for admission to the bar, it’s much, much easier to become a realtor. While there are some very competent realtors in the market, there are also some who are… well, not. Choose very carefully.
- Real estate lawyers can be expensive. While realtors charge a percentage commission payable if the deal closes, an attorney may cost between $200 to $1,500 per hour, depending on the attorney’s level of skill and the demand for his or her time. And the attorney’s bill will be due whether the deal closes or falls through or gets put on hold or anything else. If you do not have a clear vision of what you want the attorney to do, you may end up with a large legal bill. You certainly do not want to bring an attorney with you every time you want to look at a possible house to buy. Bringing the attorney in at the right time – not too early, not too late – is key.
- Attorneys can be very specialized – be sure you find one with real estate experience. If you are doing a commercial real estate development deal, you do not want to hire a personal injury attorney! If you have a dispute over an easement brewing, you don’t want someone who mainly practices criminal defense! Before engaging the attorney, it is a good idea to ask them what their primary practice area(s) are. Be sure to get someone whose experience and skillset matches your problem.
- Attorneys can sometimes make the process adversarial – not every person on the other side will appreciate talking with an attorney, and it can be seen as an escalation or a hostile act to “lawyer up.” Nonetheless, it is important to protect yourself.
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