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 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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602-390-5826
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