Ron Schmeadick, CRB Co-Owner and Associate Broker,
Realty Executives, Eugene, Oregon.
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.
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.
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?
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.
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.
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
Selling Real Estate
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.
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
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
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
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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