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There are still many small presses that will happily look at manuscripts from unagented writers–but if your goal is to sell to one of the big houses or larger independents, your chances are best if you’re represented by a reputable literary agent.
They keep current with editors’ tastes and needs, know when new imprints are starting up and when established ones are downsizing, stay abreast of changing corporate policies, keep track of who’s newly hired and who just got fired or laid off.
Dishonest agents may “represent” hundreds of writers, turning them over twice a year with a six-month contract that requires an upfront fee (reputable agents work on commission–they get paid only if you do).
They may be fronts for editing services, charging inflated prices for substandard work and never attempting to sell the “edited” manuscripts.
There are many successful literary agents who provide excellent service to their clients.
Unfortunately, there are also many dishonest or incompetent agents who relieve writers of money, waste their time, and sometimes damage their careers.