Home based travel agent vs travel agency

I know someone who runs one of those home based "agencies". It sounds very limited (and somewhat shady) to me. She had to pay a huge amount up front for a website, "license", business cards, etc. She gets points for any trip she books (basically they are last-minute travel packages, nothing she comes up with herself, as a real agency would do for you.) Apparently, the company sells these prospective agents on the idea of getting free trips for themselves, and one of the ways to do that is by booking their own (paid) trips through themselves, to build up points. If I were going to use an agent, I'd stick with an established one.

Find an agent who is a member of ASTA--American Society of Travel Agents. Most "home based" agents are part of an MLM and don't have the same capabilities of a storefront Travel Agency.

I would use a regular travel agency, but what are you trying to book through an agency?

I know for air, my old agency that used to have great rates, charged $300 (for 6) more than the airline.

I have friends, a husband and wife, who had to sell their travel agency building, or the city would have claimed it under "emanate domain", so while they look for another building or office they can afford (most small time travel agencies don't make much money these days) they are operating their long time travel agency out of their home and realizing about the same net income as when they owned their agency's building.
So, I would encourage neela to check out the agency's credentials as another has suggested.

Always check credentials. You don't want to end up burned as the result of some fly-by-night Agency. You need to know that you have some recourse if something goes wrong or if a service is not delivered.

I'm sorry I can't tell you what to look for b/c I'm here in Canada and don't know anything about the regulating body for Travel Agents in the US.

In Canada, look for the TICO sign. Canadian TA's will have a valid IATA number. You could also look under the Better Business Bureau or equivalent to see if there have been any complaints registered. Recommendations from friends can also be a good indication of the quality or level of service you may be able to expect from a particular Agent.

If you find a good Agent, keep them. I have a really great Agent working for me. I consider her to be my ally and travel partner. I'll gladly pay her the commission b/c she gets me the best deals and saves me time and money. I still leave my more complex planning up to her.

As the other respondents have said, it depends on the training and credentials of the agent. I used a brick-and-mortar travel agent for years until they decided that the costs of maintaining a physical office were too high. Now the agents work at home. Same agents, same good service. (They maintain a 24 hour cell phone line for emergencies--extremely helpful when planes get cancelled, delayed, etc.)