“Southern Markets such as Tulsa, Little Rock, Dallas and Charlotte will show the most sales growth in the coming year!’–Washington Post
What Realtors „ Do For Buyers and Sellers
People who hire Realtors and pay their sales commissions may rightly ask what these highly trained men and women do to earn their living. The short answer: A lot.
The following is a longer, but by no means complete, answer to the same question; albeit more of a bare-bones outline of what Realtors do for their clients, whether buyers or sellers.
You undoubtedly know that a home sale is a complex process in terms of both logistics and law, involving many steps. Realtors are fiduciaries who have responsibility for your money during the time of purchase. They make sure you sign all the correct documents, and there are many.
More than Chatting at Open Houses
Realtors also make sure that inspections and other milestones of the home buying process get done properly, and on time. They work with the escrow company, the mortgage lender and sometimes public agencies.
In short, there’s much more to being a Realtor than chatting over coffee at open houses. “A busy agent spends time each day in getting paperwork to the right places, explaining contract items to clients, coordinating inspections, reviewing documents and more,” says writer James Kimmons in TheBalonce.com.
And although few Realtors are licensed psychologists, they do provide emotional support and a sympathetic ear at those moments when home buying or selling can become stressful.
Following are some of the basic responsibilities of real estate agents, courtesy of realtor.com, the online publication of the National Association of Realtors (NAR).
- |Researching the Local Market
Homebuyers typically present the Realtor with an interesting problem: Given their budget (often a modest one), how can the buyers get the best neighborhood, the most convenient highway and transit options and the best shopping and the best school district?
In short, how do buyers get “the most house” for their money? Armed with some zip codes, and the Multiple Listing Service (MLS), the Realtor educates herself/himself on the local market.
Often, about a dozen or so homes fit the criteria, at least on paper. Next comes the task of scheduling walk-throughs to all properties that meet the buyer’s criteria, to winnow down the list to the most desirable choices.
- |Helping the Seller Determine the Asking Price
The Realtor may be working with a seller, who is understandably anxious to get the best price in a reasonable amount of time. The Realtor looks at recent sale prices of comparable homes (comps) in the immediate neighborhood. The agent also tours nearby homes for sale, to see how the competition compares in terms of amenities and overall condition.
Pricing is a sensitive issue. Some owners tend to over-value their home, and may fail to take market conditions into account. A desirable home that is overpriced, however, may be passed over for a slightly less desirable property with a more realistic asking price.
In strong markets, of course, buyers may compete to bid up the asking price, which requires a steady hand to evaluate competing bids. In slower markets, however, the Realtor may advise the seller to drop the price as a way of attracting offers.
- |Helping to Prioritize Key Selling Points
For sellers, the Realtor brings a practiced eye as to what buyers are looking for. A home that is small and well-maintained with great lawns and gardens may appeal more to a childless couple than a boisterous young family. Other homes make up for the lack of landscaping and architectural distinction with size, comfort and affordability.
In the same vein, Realtors representing buyers must educate them to the realities of the market and manage their expectations; they can rarely can get all the things they want in a single property.
Buyers must prioritize their needs in a conscious way and be prepared to make trade-offs: One property is closer to the workplace and more expensive, but is older than suburban homes in the same price range. A newer property, on the other hand, may entail a longer commute, but have a big backyard suitable for pre-teens and energetic large dogs.
- |Marketing Homes on the Web
Your Realtor also adds your listing to the MLS, the official roster of homes listed for sale in the local market, so all other Realtors can easily find your home. Some buyer out there is looking for a home exactly like yours; the MLS allows Realtors to connect your listing with the pool of interested buyers.
In a competitive market, like the current one, it’s possible that more than one buyer may be waiting for a house like yours to come on the market. When your listing hits the MLS, the phone starts to ring.
Most homes are also marketed on the Internet, so Realtors are generally savvy about web design, plus the kinds of images that “work” on-line. For better or for worse, a small picture on a laptop or iPad tablet is the first impression that at least 90% will have of a sale home, according to NAR.
Your Realtor documents your home for marketing. Increasingly, that means first- class photography, either by an agent skilled with a camera, or by a professional shutterbug, sometimes commissioning videographers to create streaming-video walkthroughs of the property.
For sellers, the Realtor is a marketing pro first and foremost. They know how to make a house look its best for open houses and private showings.
Many times, if the sale home has out-of- date furnishings, the Realtor will “stage” a house with high quality rental furniture.
MILLENIALS REMAKING THE SUBURBS
“We’re getting a little bit more European in the way we think of suburbs, and I think that’s because of Millennial …. We knew five years ago that Millennial were going to make a big mark on housing, just because of sheer numbers, just the way their parents … the boomers, did before. We knew they were going to do something dramatic, but we didn’t know what it would be. And now we know. It wasn’t just that they weren’t going to buy [in the suburbs, but rather] they were going to remake the suburbs in their own interest.” — Economist Nela Richardson.
The listing agent may even bring in an interior designer to make the place look stylish and appealing to younger buyers.
- |They Go Prospecting
Realtors study your neighborhood, particularly recent sales activity and comparable prices. Often, Realtors will end up knowing more about a neighborhood, such as when homes were built and how many times they have been sold, than the homeowners themselves.
In other words, real estate is a knowledge- based profession in which an expert does the “footwork” and shares it with his or her clients.
And by visiting homes and keeping in communication with other brokers, your Realtor can help eliminate some homes on your must-see list that may not be right for you.
- |Marketing and Information Gathering
Other Realtors are often the best sources of information for your listing agent. Real estate professionals, who have often known and worked with each other for years, get together regularly to talk about their listings, plus get a heads-up on any new listings soon to enter the market.
Many successful sales transactions often start out in casual “bull sessions” among Realtors in a coffee shop or restaurant. This is part of marketing your home.
Another part of marketing, as mentioned above, involves Internet listings, photography, home staging, advertising in newspapers and magazines, for-sale signs, brochures and other basic marketing tools. The Realtor typically assumes these expenses as a business cost.
Remember, your agent does not get paid until the home sale is completed, so you have a motivated marketing pro in your corner.
- |Helping Out With Inspections
As your representative, the Realtor can “stand in” for the client when the time comes in the escrow period for home inspection, appraisals and other appointments. Usually, such inspections take about two hours.
Being on the spot gives the agent knowledge of what’s going on. “Anything from termites to an iffy foundation can be relayed to the buyer immediately,” says realtor.com.
Inspections can provide important information for both the Realtor and his/her client, if the inspection turns up some deferred maintenance that could be a bargaining point in the sales negotiation. And in states requiring an appraisal, it’s important that the Realtor communicate with the lender, in case the property does not “appraise out” to the loan value. In those rare cases, the asking price may need to be adjusted downward.
MORE HOMES NEEDED ON THE MARKET
“We have gone [more than 2.5 years] seeing overall inventory decline… and that’s had a long-lasting effect on the market. That [low inventory] should keep the total numbers of homes for sale constricted for the good part of next year. However, based on movement we detected this year, we also expect those inventory declines to decelerate slowly throughout [this] year, and overall inventory could stop shrinking as early as fall 2018. Growth in new construction will be key for that recovery.” – Javier Vivas, director of economic research, realtor.com
- |Contracts and Paperwork
The sales contract, with its increasing complexity, is another area in which Realtors are a good resource. Today’s contracts can be lengthy, indeed.
Then there’s paperwork. Home sales typically require buyers to sign many disclosure statements and other legal documents. In some states, such as California, there can be several dozen documents needing signatures. Nearly all these documents are legally required. Buyers are usually well served by handing off responsibilities for paperwork to a knowledgeable third party.
Realtors also keep up with changing real estate regulations. “Laws change every year and vary from state to state. Realtors stay current with all the updates in regulations, laws, contracts and practices,” according to HomeBuyinginstitute.com.
A Realtor can help you spot potential trouble issues in a home under consideration: Buyers need to be aware of hazards, “polybutylene piping (a plumbing material that’s prone to bursting), or the concerns with FRT plywood (a roofing material that can spontaneously combust in higher temperatures,” according to realtor.com.
Unless you are an organizational expert, you might be better off letting a professional act as the “bird dog” on these details.
- |They Write Up Offers and Counteroffers
Writing offers and counteroffers are integral to the Realtor’s job. Writing offers for the buyer requires both knowledge and shrewdness, to get the best price and avoid over-paying for the house. Getting to the final sales price can often involve a series of counteroffers between the parties, which can be a delicate negotiation.
Writing counter-offers involves strategy and experience, so as not to anger or alienate the other side of the transaction with a price that is not viewed as “insultingly” low. The moments before closing can be tense, as both sides try to get close to their favored price point before the big transaction either moves forward to completion—or goes off the rails.
“Not every sale goes smoothly,” says real- tor.com. “… Buyers and sellers get difficult all the time … good agents try to shield their clients from the high drama unless there’s a reason to fill them in.”
ACHICKEN-AND-EGG SITUATION FOR SELLERS
“We continue to be stuck in a ‘chicken- and-egg’ dilemma whereby would- be sellers know that they will likely have no problem selling their existing home, but they will not list until they have they have found [something else] to buy. I do expect to see an uptick in new home starts, but unfortunately, it will not be enough to meet pent-up demand.” –Economist Matthew Gardner
- |Smoothing Bumps and Soothing Feelings
At these moments, the Realtor, who has lived through countless sale closings, can be both a sympathetic ear and a wise counsellor advising patience and persistence.
A change in residence is a well-known stressor, ranking No. 32 on the Holmes- Rahe Stress Inventory, right below problems with one’s boss and just above changing to a new school. And the top life stressors such as death, divorce, new job, etc. are often what motivates people to make a move. (The inventory is maintained by the American Institute of Stress).
“People get emotional. You have to be a problem-solver and keep a positive approach and come up with a positive solution,” says a Realtor quoted in realtor, com. “It might not take a lot of time, but it takes emotional energy.” Offering support during a potentially stressful real estate transaction to the end of a successful close is indeed an important and sometimes overlooked aspect of being a good Realtor.
In summation, even a bare-bones list of a Realtor’s responsibilities turns out to be very long indeed… and it grows even longer, when one adds the role of a proverbial shoulder for clients to lean on.