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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-yourself' 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 Use 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 and 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®!
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