Hey friend, do you want to buy a house? Or what do real estate agents really do for all that money?
Real estate as a profession has been around for as long as the United States has existed, and yet many people have little idea how real estate agents actually work. This understanding is exacerbated by the fact that no two real estate agents practice in exactly the same way. While the goal is the same, the methods used are often quite different. Still, the basic process remains unchanged.
This is important because both buyers and sellers are often challenged by their life situation, or lack thereof, to the point of severe emotional and financial stress. Understanding the process can be of great help.
Buyers, for example, tend to think of real estate salespeople as someone who wants to sell them a house, who will even try to convince a person to buy a particular property to earn another commission. While some new licenses may start out as a glorified used car salesman with this idea, they rarely last. More than 70% of new agents fail in the first year.
What really happens is that the real estate agent learns as much as he can about a person’s needs and finances and scans the market for a home that fits those needs and financial limitations. This last topic is usually the most difficult. Buyers strive to get the most homes for the lowest cost and sellers strive to sell for the highest price. Add in direct competition from other buyers and the landscape can be challenging at best.
This is where a good real estate agent is worth their weight in gold. Well, maybe not his weight in gold, though this may be true in some cases, but a considerable amount of money at a time when financial resources are often stretched to the limit.
Helping a buyer find the right home at the right price is the job, and real estate agents have been doing exactly that for as long as real estate agents have existed. If they hadn’t, they would have been extinct a long time ago, especially in today’s computer-driven markets.
Once the right home is found, the work is just beginning. The best price and terms must be negotiated. This is an art in itself and can save the buyer a considerable fortune. This is where the network of realtors affiliated with the Multiple Listing Service (MLS) and the National Association of Realtors (NAR) come into play.
Both the buyer and the seller are usually represented by independent agents, each legally obligated to serve the needs of their client and no one else. Buyers and sellers do not interact directly. This single factor facilitates successful deals more than any other means, as real estate agents, as experienced negotiators, can put together deals that people usually can’t, as evidenced by the staggering negotiation failure rate experienced by FSBOs. for sale by owners working without representation).
Once the deal closes, the next challenge is getting to the closing table through financing, home inspections, attorney and title issues, and even time. The previous owner must move out at the same time the new owners are ready to move in. This is often on the same day, the closing day. Here, too, the experience pays off, while sellers who manage to get a deal experience major problems and failed closings that force them to start over with all the accompanying costs and lost opportunity.
Real estate agents facilitate successful transactions not by pushing their own agenda, but by expediting the needs and goals of their clients.
It’s not just about sell someone a counterproductive home in a world of cautious buyers undermines an experienced agent’s foundation for continued success in the profession: repeat customers.
Too often, sellers work with misconceptions about the process of selling their property. Given any consideration, they might think that what doesn’t really happen to shoppers does. No successful agent goes out and tries to convince someone to buy a house.
What actually happens is much like the marketing of any product or merchandise. Simply put, the real estate agent promotes the listing to the buying public in the best possible way. This process is also greatly facilitated by MLS associations such as Homes for Sale Depository. The MLS is the single best source for home sales in the country, with over 90% of buyers finding their home through agents affiliated with a regional MLS. The objective is that no one interested in buying a home is left without knowing the seller’s offer. And that the best possible light means that the place must be displayed well and the price must be competitive with other similar homes since buyers will always choose the best home at the best price.
This can be a challenge for both sellers and buyers. Again, the seller is looking to maximize their investment, which usually doesn’t include fixing up the place. If they wanted to make improvements or repairs, they wouldn’t be selling in the first place and for the price they get, the buyer should be willing to accept less than picture perfect, at least that’s the common opinion. This is just as reasonable as the buyer being put off by houses that need work and are, in his opinion, too expensive, but not conducive to anyone getting what he wants and needs.
What results is conflict, almost always. Solving these innate problems is what real estate agents do best: finding the right home for buyers based on their needs, not your own. Or market the seller’s house effectively to attract a ready, willing and able buyer. Then make it work for both parties until the closing table and a great new house for the buyer and a big check for the seller to improve your bottom line and his living situation. Not bad, not bad at all.