Image courtesy of Flickr, Ludovic Bertron
We all know that real estate agents are here to help you buy and sell your home, but what exactly does a real estate agent or realtor do for you?
According to the National Association of Realtors (NAR) there are approximately 2 million active real estate licensees in the United States and approximately 5 million existing home sales in any given year. Approximately 90% of real estate transactions involved a real estate agent, amounting to 4.5 million transactions and nearly $1 trillion dollars in aggregate transaction volume.
Real estate agents play a very important role in our economy to say the least. But what is it they do exactly and what should you expect of your agent?
Real estate agents are professionals who have received a real estate license by taking various real estate courses and by passing a state exam. A Realtor on the other hand is an agent who becomes a member of the National Association of Realtors and promises to adhere to their Code of Ethics.
Throughout this post we use the term agent and Realtor synonymously.
Your agent should help get you and your property ready for the buying and/or selling process. Don't expect them to roll up their sleeves and help you paint, but do expect them to advise you on the color of paint that will be most attractive to buyers, and much more.
Additionally, agents may refer you to professionals such as a mortgage lender, home inspector or contractor. You can also rely on them to offer buying and selling strategies and help you avoid potential pitfalls that only experience can lend to.
You can search online yourself, and should, but an agent can expose you to homes not yet listed and spot opportunities you may have missed. Most active agents have subscriptions to the Multiple Listing Services (MLS) which gives them access to the most accurate and updated listings on a daily basis.
The average buyer views 12 homes before finding "the one". There's going to be a lot of coordination required to get in and visit your potential new home. Having a good agent by your side will make this process much easier.
In order to unlock and enter a home for a viewing, your agent will use their membership to an "electronic key" service provider. This service will track which agent entered the home, and for how long they stayed. The report of visitors is sent to the listing agent.
You can list your home "For Sale By Owner" which simply means you will act as your own listing agent, but you may still have to pay a commission to the buyer's agent.
When considering the complications involved in listing your home for sale, marketing your home, dealing with potential buyers and the various contracts involved, it is recommended to seek an agent in order to limit any liabilities that can arise from doing it all yourself.
An agent will take photos and/or videos of your home, input the information into an MLS database for other agents to see, place a sign on your lawn for passersby and advertise your home to would be buyers and their agents through marketing sources.
You can get home value estimates online, but an agent will give you a more detailed value based on sales comparables in the immediate area. This information will really help you determine if a home you are looking to buy is fairly priced, or if the home you are listing to sell is priced competitively to help ensure a quick sale.
Agents advertise open houses to get potential buyers to walk in, tour the property and ask the listing agent questions about the property on the spot. This is also a good opportunity to get to know what your potential buyers are looking for and gauge the marketability of your home.
An agent will negotiate and draft formal contracts for your offer to buy a property. A good agent will help you market yourself correctly to sellers so that your offer stands out from the rest.
If you're selling your property, an agent will receive offers for purchase, negotiate and draft formal contracts in connection with the sale of your property. They will work directly with the buyer's agent to make sure your best interests are protected and the highest and best offers are presented to you.
If buying a home and your offer for purchase is accepted, your agent will guide you through the due diligence process. This includes finding the right service providers, such as a home and termite inspector.
Your agent will be intimately involved in the closing process through escrow, such as delivering your check to the closing agent, or delivering documents to the lender, or letting the appraiser into the home. Because your agent doesn't get paid until the successful consummation of a deal, your interests and the agent's interest are aligned to the same goal.
To learn more about escrow and their involvement in the closing process, click here.
Your agent will be involved in helping remedy any issues that may arise. For example, if the appraisal indicates a lower value, your agent will provide additional comparables to support the higher value, or re-negotiate the purchase price with the sellers.
There are many layers and processes involved in a real estate transaction, as well as multiple people to coordinate with and dozens of contracts to draft and get signed. To put it simply, a real estate process can be very complicated. You are paying a real estate agent for their expertise and experience to avoid potential pitfalls which may delay closing, or worst, a lost deal.
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