Why use a REALTOR®?
Can a real estate agent really help me
in buying and selling property? The answer is YES!
When you're ready to think about buying or selling your property,
you need to ask yourself the following questions: Do you have the
time, energy, sources of information, and contacts to do the job
yourself? If you were one of the 'do-it-your-self' people, would
the results be as good or better than they would be if you had
professional assistance? Would it have gone smoother? Would it
have given you more personal time? Would you have purchased for
less, or sold for more, if a real estate agent was involved? Read
the following information and learn how a real estate agent can
help you understand everything you need to know about a real
estate transaction.
The Buying Process
The process of buying a home or investment generally
starts with determining your buying power; that is, your
financial reserves plus your borrowing capacity. If you give a
real estate agent some basic information about your available
savings, income and current debt, they can refer you to lenders
best qualified to help you. Most lenders -- banks and mortgage
companies -- offer limited choices.
Finding
Once you know how much you can and want to invest, the
next step is to find the properties that most nearly fit your
needs. This is the time to choose a real estate licensee. When
picking a real estate agent look for one who is also a REALTOR®.
A REALTOR® is a member of the NATIONAL ASSOCIATION OF REALTORS®,
a real estate trade association, and all members agree to abide
by a 17 article Code of Ethics. A REALTOR® has many resources to
assist you in that search. Sometimes the property you are seeking
is available but not actively advertised in the market, and it
will take some investigation by your agent to find all available
properties.
Selecting
Your job is to make the final selection of the right
property for you. This is when excitement and emotion run high.
Your real estate agent can assist you in the selection process by
providing objective information about each property. Agents who
are REALTORS® have access to a variety of informational
resources. REALTORS® can provide local community information on
utilities, zoning. schools, etc. There are two things you'll want
to know. First, will the property provide the environment I want
for a home or investment? Second, will the property have resale
value when I am ready to sell?
Negotiating
There are a myriad of negotiating factors, including,
but not limited to price, financing, terms, date of possession,
and often the inclusion or exclusion of repairs and furnishings
or equipment. The purchase agreement should also provide a period
of time for you to complete appropriate inspections and
investigations of the property before you are bound to complete
the purchase. Your agent can advise you as to which
investigations and inspections are recommended or required.
Due Diligence
With a negotiated agreement in hand, it is time to
complete the evaluation of the property. Depending on the area
and property, this could include inspections for termites, dry
rot, asbestos, faulty structure, roof condition, septic tank and
well tests, just to name a few. Your agent can assist you in
finding qualified responsible professionals to do most of these
investigations and provide you with written reports. You will
also want to see a preliminary report on the title of the
property. Title indicates ownership of property and can be mired
in confusing status of past owners or rights of access. The title
to most properties will have some limitations; for example,
easements (access rights) for utilities. Your agent, title
company or attorney can help you resolve issues that might cause
problems at a later date.
Financing
As soon as you are reasonably sure the property is right
for you, the process of obtaining financing begins. Your agent
can help you in understanding different financing options and in
identifying qualified lenders.
Closing or Settlement
Finally, there is the closing, or settlement, as it is
known in different parts of the country. Every area has its own
unique customs. In some areas, the title or escrow company will
handle this process. In other parts of the country, an attorney
does it all. Again, your real estate agent can guide you through
this process and make sure everything flows together smoothly.
Selling Real Estate
Pricing
This process generally begins with a determination of a
reasonable asking price. Your real estate agent can give you
up-to-date information on what is happening in the marketplace
and the price, financing, terms, and condition of competing
properties. These are key factors in getting your property sold
at the best price, quickly and with minimum hassle.
Marketing
The next step is a marketing plan. Often, your agent can
recommend repairs or cosmetic work that will significantly
enhance the salability of the property. Marketing includes the
exposure of your property to other real estate agents and the
public. In many markets across the country, over 50% of real
estate sales are cooperative sales; that is, a real estate agent
other than yours brings in the buyer. Your agent acts as the
marketing coordinator, disbursing information about your property
to other real estate agents through a Multiple Listing Service or
other cooperative marketing networks, open houses for agents,
etc. The REALTOR® Code of Ethics requires REALTORS® to utilize
these cooperative relationships when they benefit their clients.
Advertising is part of marketing. The choice of media and
frequency of advertising depends a lot on the property and
specific market. For example, in some areas, newspaper
advertising generates phone calls to the real estate office but
statistically has minimum effectiveness in selling a specific
property. Overexposure of a property in any media may give a
buyer the impression the property is distressed or the seller is
desperate. Your real estate agent will know when, where and how
to advertise your property.
There is a misconception that advertising sells real estate. The
National Association of REALTORS® studies show that 82% of real
estate sales are the result of agent contacts through previous
clients, referrals, friends and family, and personal contacts.
Security
When the property is marketed with the agent help, you
do not have to allow strangers into your home. Agents will
generally pre-screen and accompany qualified prospects through
your property.
Negotiating
The negotiation process deals with much the same issues
for both buyers and sellers, as noted above under the buying
process. Your agent can help you objectively evaluate every
buyer's proposal without compromising your marketing position.
This initial agreement is only the beginning of a process of
appraisals, inspections, and financing -- a lot of possible
pitfalls. Your agent can help you write a legally binding,
win-win agreement that will be more likely to make it through the
process.
Monitoring, Renegotiating and Closing
Between the initial sales agreement and closing (or
settlement), questions may arise. For example, unexpected repairs
are required to obtain financing or a cloud in the title is
discovered. The required paperwork alone is overwhelming for most
sellers. Your agent is the best person to objectively help you
resolve these issues and move the transaction to closing (or
settlement).
How Do Real Estate Agents Get Paid?
Real estate agents or brokers are generally paid through
the sales commission paid by the seller when a transaction
closes. Agents have expenses and financial obligations just like
you, so it will be to your mutual benefit if you choose a real
estate agent and stick with that person. The agent will respect
your loyalty and respond with a sincere commitment to you.
Why A REALTOR®?
All real estate licensees are not the same. Only real
estate licensees who are members of the National Association of
REALTORS® are properly called REALTORS®. They proudly display
the REALTOR "®" logo on the business card or other
marketing ands sales literature. REALTORS® are committed to
treat all parties to a transaction honestly. REALTORS® subscribe
to a strict code of ethics and are expected to maintain a higher
level of knowledge of the process of buying and selling real
estate. An independent survey reports that 84% of home buyers
would use the same REALTOR® again.
Using a REALTOR®
You Be the Judge!
Real Estate transactions involve one of the biggest
financial investments most people experience in their lifetime.
Transactions today usually exceed $100,000. If you had a $100,000
income tax problem, would you attempt to deal with it without the
help of a CPA? If you had a $100,000 legal question, would you
deal with it without the help of an attorney? Considering the
small upside cost and the large downside risk, it would be
foolish to consider a deal in real estate without the
professional assistance of a REALTOR®!
Find out about the REALTORS® strict Code of
Ethics