“88% of buyers recently purchased their home through a real estate agent or broker….
Having an agent to help them find the right home was what buyers wanted most when choosing an – k agent at 51%.” NAR, Profile of Buyers and Sellers
TOP STORY:
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 TheBalance.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).
I |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, 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.
2 | Helping the Seller Determine 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. He or she 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 offers. In slower markets, however, the Realtor may advise the seller to drop the price as a way of attracting offers.
3 |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 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.
4 |Marketing 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” online. For better or for worse, a small picture on a laptop or iPad is the first impression that at least 90% will have of a sale home, according to NAR.
Your Realtor markets your home with 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.
Sometimes, if the sale home has out-of- date furnishings, the Realtor will “stage” a house with high quality rental furniture. The listing agent may even bring in an interior designer to make the place look stylish and appealing to today’s buyers.
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.
5 |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.
A CHICKEN-AND-EGG
SITUATION FOR SELLERS
You’ve sold your home for a great price but need to buy another one to live in. Ah, but there are problems: few homes, high prices and strong competition among buyers!
“There is still a shortage of homes for sale. Many people who have lost jobs during the pandemic, have taken advantage of mortgage forbearance programs to stay in their homes. Many people have been reluctant to sell during the pandemic. Those two factors have contributed to the shortfall in housing for sale, especially ‘starter’ homes.” prnewswire.com
6 | Marketing and Information Gathering
Other Realtors are sometimes 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 sale is completed, so you have a motivated marketing pro in your corner.
7 | 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 reahor.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 since mortgage lenders require an appraisal, it’s important that the Realtor maintain communication with the lender, in case the property does not “appraise out” to the loan value. In such a case, the asking price may need to be adjusted downward.
STILL SELLING OVER ASKING
54%. That’s the share of homes that sold above the asking price in the second quarter of 2021, according to CoreLogicdata.
“More than half of homes” are now sold higher than the asking price…. While this is enticing more selharstoput their homes on the market, the increase in inventory from this February’s lows is still not sufficient to meet the ongoing and massive demand,” said Selma Hepp, an economist for CoreLogic in Forbes.com
8| 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 a vast amount of 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. Clients 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.
9 | 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 skill and experience to come up with the best strategy, and to not anger or alienate the other side of the transaction with a price that is viewed as “insultingly” low. The end of negotiations 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.
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 Millennials …. We knew five years ago that Millennials 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.
10 | Smoothing Bumps and Soothing Feelings
At these moments, the Realtor, who has lived through countless transactions, can be both a sympathetic ear and a wise counselor 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 ds 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 realtor.cpm. “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 proverbial shoulder for clients to lean on.