Real estate agent responsibilities
Real estate agents work on the basis of sales commissions. Home sellers do not pay the agent until the house is sold. The agent’s commission is taken from the proceeds of the sale as a percentage of the selling price. In some cases, flat fees may be agreed upon in advance, but this is not typical. Sellers should check with prospective agents about their commission rates while, at the same time, checking on the agent’s record of success.
To get a license, real estate agents pass a rigorous state examination that covers both proper marketing practices and the numerous legal considerations in the sale and transfer of property from one person to another.
Additionally, real estate companies and local associations of agents establish ethical practices that contribute to the standards of professional conduct. This gives reasonable assurance to sellers that an agent is reputable, and the ethical standards enhance the reputation of this high-stakes business profession.
Benefits of using a Realtor
Real estate agents are rewarded for finding home sellers by becoming the agent of record through an executed sales contract with the seller. The contract names the agent as the recipient of future commissions regardless of who actually sells the home. During the term of the contract, the listing agent receives the commission on the sale.
The property listing becomes the asset of the real estate agent, thus establishing the agent’s own interest in finding a buyer.
The advantages of working with a real estate agent to sell a home are numerous. Here are a few:
• Agents have a vested interest in the sale of the home at the best possible selling price. Commissions are not earned until the agent’s work consummates in a sale.
• Sellers who have limited time and knowledge about the local real estate market can benefit from the agent’s talents without having to become experts themselves.
• Agents can leverage their reputation in the local market with advertising and a list of prospective buyers. As professionals, real estate agents are usually aware of potential buyers long before an individual seller learns of it. Corporate moves and local business changes can give real estate agents a long list of sales leads. This works to the home seller’s advantage.
• Agents handle the negotiations with the buyers so that buyers and sellers do not run the risk of personality clashes. As professionals, real estate agents can depersonalize the sale so that if a potential buyer complains about some aspect of the home’s appearance or condition, it does not offend the seller, thus causing a stalemate or an end to the negotiation, and, perhaps, a lost sale.
• Honesty is essential in the contracting and final execution of the sale, but it begins at the point when the seller signs the contract to engage the services of a real estate agent. It may seem obvious, but the seller needs to know what the prospective buyer will see when he or she tours the home. An honest real estate agent will inform the seller of all potential negative factors, from pet odors to paint colors. Sellers should be prepared to hear this honest evaluation and to make the necessary changes to attract the best buyers.
A real estate agent should have a proper marketing plan in place to sell your house as quickly as possible at the right price point. (Photo by Summer Galyan)
Using a Realtor to buy a home
Keeping in mind that the real estate agent is paid on the basis of the sale of the seller’s home, prospective buyers need to recognize whose interest is most at stake in the transaction. Selling the home is the only way the agent can make money, so even if the agent shows a buyer a home that is listed by another agent, neither agent makes any money unless the house is sold.
Buyers should be selective in choosing a home, and they should remain selective during the buying process and not yield to the pressure of an agent who demonstrates an unwillingness to negotiate on key points with the seller’s agent.
A first-time buyer should research a few key things before soliciting the help of a buyer’s agent. Here is a short list:
Does the agent have a good number of his/her own listings in the community where the buyer wants to live? An agent is most likely going to show the buyer the homes he or she has listed. The agent's commission will be higher because the agent is both the seller’s agent and the buyer’s agent in the transaction.
Is the agent associated with a realty company that has a large quantity of listings that are attractive to the buyer? An agent can bring the benefit of a much larger list of potential homes for the buyer to choose from if his network or agency has some prearranged sharing of commissions.
Ask the agent for references of recent buyers he or she has represented. Ask the referenced buyers questions about the negotiations, the closing of the deal, and what, if anything, they had to give up in the negotiations.
Red flags with Realtors
A seller ready to put a home on the market should be selective in whom they hire and review a list of real estate agent ratings. A home seller should find out about a potential agent's specific marketing plan for the home. A real estate agent who cannot give marketing details is likely not going to be as successful. Other red flags include poor communication and agents who appear self-serving.
Find out from local business newspapers, data services and real estate company ratings on Angie’s List how long, on average, it takes to sell a local home. Be wary if the agent’s personal record of sales is significantly longer, without reasonable explanation. Timing is often a critical consideration in home sales.