According to the National Association of Realtors, real estate agents play a significant role in the sale of 80 percent of homes on the market. Sellers who hire real estate agents earn, on average, a 20% higher profit than those who choose the solo route. Buying or selling a home is a process with which very few Americans choose to fiddle, absent the guidance of real estate agents and appraisers. The purchase or sale of real estate involves more than mere technicalities and is rather complex in nature. Furthermore, such an initiative represents an important milestone in consumers' lives. Therefore, it would seem logical and judicious to consult the pros- real estate agents and appraisers- to guide you through the buying/selling steps. With low interest rates projected in long-term forecasts and real estate activity expected to remain in hustle and bustle mode, the buying and selling public will rely increasingly on real estate agents and appraisers. A short synopsis of these two central figures in the real estate transaction is presented below:
1. Real estate agents
Generally, they are independent salespersons who offer their services to licensed brokers on a contractual basis. In exchange, brokers pay real estate agents a percentage of their commission derived from the latter's sale of the real property. Real estate agents are required to be licensed in all of the states and the District of Columbia. They may serve either buyers or sellers and serve as intermediaries in price negotiations between the two parties. They help sellers market their property and obtain the maximum price under optimal terms. Among the key services that real estate agents provide to sellers are the following:
- Setting a competitive market price for the real estate
- Listing the real estate for sale
- Drafting and preparing the necessary documents
- Describing the real estate for purposes of open houses, pamphlets, and advertising
- Putting up a "For Sale" sign on the real property that provides the real estate agent's contact information
- Advertising for the real estate
- Hosting open houses to offer a tour of the property
- Fielding questions about the property
- Scheduling appointments to show the property
- Pre-screening prospective purchasers to ensure that they can afford to buy the property
- Negotiating a price that is favorable to the sellers
- Preparing a boilerplate real estate purchase contract
Real estate agents possess a comprehensive knowledge of tax and local zoning laws and are thoroughly acquainted with the local real estate market. Consequently, they can also assist purchasers in finding property that matches their specifications and needs and in purchasing them at the lowest possible cost. When necessary, real estate agents screen out prospective buyers to be certain that they are financially capable of purchasing the real estate shown. Real estate agents provide the following services to prospective buyers:
- Accompanying purchasers to the property and offer them a tour of the premises
- Negotiating terms and price on behalf of their clients
- Drafting and completing a boilerplate real estate purchase contract
- Obtaining agreements (known as "listings") by owners to list properties for sale with the real estate company
- Creating lists of properties for sale
- Searching for available financing sources
- Offering prospective purchasers a virtual (online) tour of the properties under consideration
Another duty performed by real estate agents is seeing to it that all special contractual terms (i.e. radon, termite and home inspections; repairs; compliance with environmental regulations) have been complied with prior to the closing date. The majority of real estate agents also coordinate other aspects of the closing. Clients will find many real estate agents that work weekends and evenings and that accommodate the former's schedule and needs.
2. Appraisers
Each state has its own certification and/or licensing requirements for real estate appraisers, whose job it is to estimate a specific property's value. These estimates are issued for a variety of purposes, including to 1) set a sales price for a home, 2) ascertain the mortgage amount that might be approved for a property, 3) settle an estate, and 4) provide assistance in a divorce settlement. Appraisers offer estimates on all types of real estate, ranging from farms to mega-shopping complexes, and one property at a time. Generally, they specialize in a particular real estate sector such as commercial buildings, strip malls, golf courses, or residential properties. Commercial appraisals can usually appraise any type of property but tend to appraise real estate that is intended for commercial objectives, such as hotels and shops. Residential appraisers specialize in homes or other types of residences and limit their valuation to structures sheltering one to four families. Still other appraisers are general practitioners and provide valuation services for any type of real estate. Appraisers typically conduct on-site visits during the day and in accordance with the client's schedule. Upon visiting the premises and taking into account such data as lease records, similar home sales, income ability, and location, appraisers determine a property's fair value.