One of the most complex and significant financial events in peoples’ lives is the purchase or sale of a home or investment property. Because of this complexity and significance, people typically seek the help of real estate brokers and sales agents when buying or selling real estate.
Real estate brokers and sales agents have a thorough knowledge of the real estate market in their communities. They know which neighborhoods will best fit clients’ needs and budgets. They are familiar with local zoning and tax laws and know where to obtain financing. Agents and brokers also act as intermediaries in price negotiations between buyers and sellers.
Real Estate Agents and REALTORS®
What’s the difference and when choosing a real estate professional, why choose a REALTOR®? Unlike real estate practitioners who are simply licensed by their state to do business, REALTORS® have taken additional steps to become members of the local Association of Realtors and have agreed to adhere to a strict Code of Ethics.
The term Realtor® is not a generic term: it is a registered membership mark that identifies a licensed real estate professional who is a member of the National Association of REALTORS (NAR). The term Realtor® IS NOT synonymous with “real estate agent.” There are more than 3.1 million licensed real estate agents in the U.S., but only 1.2 million are REALTORS®, about one out of three.
Some background information may help to clarify who and what Realtors® are. Nationally, there are more than 1 million REALTORS® that joined through the 1,400 local associations and 54 state (and territorial) associations of Realtors®. Another way t o look at it is that members join the NAR through their local Realtor® association, in our case - the Tulare County Association of REALTORS®. The correct spelling of the term is Realtor® or REALTOR®.
When selling property, brokers and agents may also help to arrange favorable financing from a lender for the prospective buyer; often, this makes the difference between success and failure in closing a sale.
Agents and brokers spend a significant amount of time looking for properties to sell. They obtain listings—agreements by owners to place properties for sale with the firm. When listing a property for sale, agents and brokers compare the listed property with similar properties that recently sold, in order to determine a competitive market price for the property. Following the sale of the property, both the agent who sold it, the agent who obtained the listing receive and their respective offices share a portion of the commission.
Before showing residential properties to potential buyers, agents meet with them to get an idea of the type of home the buyers would like. In this prequalifying phase, the agent determines how much the buyers can afford to spend. In addition, the agent and the buyer sometimes sign a buyer representative contract, which states that the agent will be the only one to show houses to the buyer or other terms mutually agreed upon. An agent or broker then generates lists of properties for sale, their location and description, and available sources of financing.
Agents may meet several times with prospective buyers to discuss and visit available properties. Agents identify and emphasize the most pertinent selling points. If bargaining over price becomes necessary, agents must follow their client’s instructions carefully and may present counteroffers, etc.
Once the buyer and seller have signed a contract, the real estate broker or agent must make sure that all terms of the contract are met before the closing date. The agent must make sure that any mandated or agreed-upon inspections take place. In addition, if the seller agrees to any repairs, the broker or agent helps ensure they are made. Loan officers, attorneys, or other people handle many details, but the agent helps ensure that they are carried out.
Most real estate brokers and sales agents sell residential property. Some sell commercial, industrial, agricultural, or other types of real estate. Every specialty requires knowledge of that particular type of property and clientele. Selling or leasing business property requires an understanding of leasing practices, business trends, and the location of the property. Agents who sell or lease industrial properties must know about the region’s transportation, utilities, and labor supply. Whatever the type of property, the agent or broker must know how to meet the client’s particular requirements.
Brokers and agents do the same type of work, but brokers are licensed to manage their own real estate businesses. Agents must work with a broker. They usually provide their services to a licensed real estate broker on a contract basis. In return, the broker pays the agent a portion of the commission earned from the agent’s sale of the property.
Advances in telecommunications and the ability to retrieve data about properties over the Internet allow real estate brokers and sales agents to also work out of their homes. Never the less, agents spend much of their time away from their desks—showing properties to customers, analyzing properties for sale, meeting with prospective clients, or researching the real estate market.
Agents and brokers often work more than a standard 40-hour week. They sometimes work evenings and weekends and are usually on call to respond to the needs of clients. Although the hours can be long or irregular, most agents and brokers have the freedom to determine their own schedule. They can arrange their work so that they have time off when they want it.
In every State, real estate brokers and sales agents must be licensed. Prospective agents must be at least 18 years old, and pass a written test.