First of all, it must be said that what the realtor does is essential for the real estate market. But do you know what a realtor is?
Well, realtors are professionals registered with the NAR – National Association of Realtors – and must follow all the guidelines of that association.
Thus, a national code of ethics is followed to ensure that the entire process of buying or selling a property occurs in the most ethical and responsible manner possible.
According to NAR, the United States has about 1.4 million realtors, 65% of them real estate agents, 22% real estate brokers and 15% associate brokers.
Ok, you must be thinking: but do I really need a realtor to buy or sell a property? After all, I can do it myself.
In fact, you can, but you shouldn’t.
What does NAR tell the realtor to do?
It is absolutely unrealistic to imagine that a realtor acts according to what he thinks. Indeed, there is a whole code of ethics established by NAR that says what they can and cannot do.
For example, according to these guidelines, the realtor cannot commit exaggerations, modifications or omissions regarding a property.
In addition, it is established that they must always cherish honesty, passing an image consistent with reality in all stages involving a real estate negotiation.
Above all, the realtor is a professional who defends and protects the interests of clients, whether in relation to a purchase or a sale.
Therefore the Realtor is a category of extreme expertise that is composed of members of a real estate brokers association that strictly follows the code of ethics provided by NAR.
This is one of the reasons why it is not wise to make such a big decision in your life – as it is to negotiate a property – without the help of a professional who has a vast knowledge of the real estate market.
Besides, the realtors know how to speak the right language of the real estate market, they understand all the jargon.
Not to mention that they have access to exclusive databases of properties that are not accessible to us mere mortals. So you may miss out on unique opportunities if you don’t look for a realtor.
Got it, but what’s the differences between the realtors? Aren’t they the same thing? I’ll explain it right now!
Differences between the realtors
Many people think that there are no differences between the realtors, but in fact it’s not so. In fact, there are similarities in what they do, however, they are not synonymous.
Despite all this, it is important to stress that to be a realtor the professional must be associated and comply with NAR guidelines.
In other words, not every title we will comment below is a realtor, because not all of them have the registration with NAR.
To make it even clearer, realtors can occupy any position within the real estate market, since they are part of the NAR. For instance, every realtor can act as an agent, but not every agent can act as a realtor.
Before explaining the differences that say that deep down the real estate market agents know all the existing techniques that can compromise a good deal.
Therefore, it is vital not to negotiate on your own, since you may buy a pig in a poke and lose money.
Real Estate Agents (in some states, real estate salesperson)
To start, let’s talk about the real estate agents. They are also called real estate associates.
Depending on the state, the person who wants to become a real estate agent must take a course of 40 to 120 hours.
Then, to get the license, it is necessary to pass the practical evaluation and on the real estate market legislation test.
These professionals make up most of the realtors and they are the ones who had classes and passed through licensing exams within the state in which they work.
Then, these agents serve as intermediaries between the buying and selling parties, certifying both of their responsibilities and rights.
It is the most comprehensive area within the brokerage market as it requires less experience compared to other titles.
Brokers (or, in some states, qualifying broker)
Following, are the brokers who are the professionals who continued their studies and obtained this title – higher than the agents, the more basic level.
Some states require certain experience as real estate agents to apply for this title.
But states such as California allow graduate attorneys to take the exam to become a broker without necessarily having the years of experience as a real estate salesperson.
In this regard, states as Arizona requires, in order to apply as a broker, that from the previous 5 years at least 3 have worked as a real estate agent.
With this title you can open your own real estate brokerage firm, although these professionals can work for agencies as well. When this happens they are called real estate associate brokers and usually receive higher commissions than agents.
But, the biggest difference between them is that real estate agents must work under a broker or agencies. This way, they act by dividing the profits and brokerage fees. Their profit grows as the price of the negotiated property also increases.
On the other hand, the broker can work independently.
In fact, the realtors have numerous functions, but in short they have 4 categories of performance. I’ll list them one by one below.
But first let me tell you something.
The realtor knows absolutely everyone who has any relation with the property you want to buy or sell.
In other words, the realtors are connected to a network of stakeholders in this area that we wouldn’t even dream of. After all, a great part of their life is dedicated to this.
So, regardless if you want to buy or sell, don’t forget to hire a realtor to help you through the whole process.
Called “listing brokers” or “listing agents” these professionals are hired by real estate owners to provide the sale or rental of the property. Although it may seem simple, it’s nothing like that.
It’s actually a very long job. Take a look at what the realtor does for the owner:
- Determine an Asking Price
- Stage the Home
- Put the Home on the Market
- Schedule Showings and Open Houses
- Market the Property
- Negotiate the Offer
- Verify the Appraisal
- Schedule and Attend the Closing
In this case, the realtors act on behalf of the client by being interested in acquiring or renting a property.
Thus, the realtor traces the profile of his client and looks for the properties that meet the requirements. This is a bit of the service provided to the buyer:
- Assist with getting a preapproval
- Accompany you on showings
- Write up any offers
- Attend your inspections
- Negotiate inspection repairs
- Monitor any necessary paperwork
- Communicate with the other parties in the transaction
- Facilitate the final walk-through
- Tie up loose ends at closing
3) What does a realtor do in Sale and Purchase
Here the name is “dual agent”. This title is given to professionals who work for both buyers and sellers.
Although it guarantees fair and honest business on both sides, the dual agent is a rather contradictory career.
Therefore, many rules are imposed in these cases so that there is no conflict of interest regarding the value of the negotiation.
That is, to ensure that the price charged is responsible and benefits all parties, special laws have been created to regulate ethical practices in this sense.
Thus, a viable way out is that the same brokerage is charged both to who sells and to who buys, that is, it certifies that the final price will be fair.
However, some states have defined this type of business as something forbidden within the real estate industry.
Known as “transaction brokers” these professionals act as business facilitators, either providing the documents to be signed or helping to connect both parties.
What does a realtor do?
However, transaction brokers do not necessarily receive any pre-established value as in previous cases.
In this case, therefore, there is no commission, but a variable contribution.
However, what is a realtor commission?
Well, this is quite relative because it varies from state to state, but, on average, it is 5-6% of the value of the real estate negotiated.
But don’t rush, because often the realtor divides the commission by 4. After all there may be two agencies and 2 brokers intermediating the business.
Moreover, the value of the commission is often negotiated below 5%.
Really the realtor “sweat blood” to get his commission. After all, he is a professional who stays 24/7 at your disposal for whatever you need about the real estate market.
Besides, many times the realtor invests his own money in marketing so that you find the ideal business.
Tell the truth, you can’t be without a realtor when negotiating a property.
Of course, what a realtor does is not an easy task. I have no doubt about it.
For example, for a broker to open a real estate company it is necessary to disburse an amount of 1500 to 2000 dollars.
Not counting the hours of study in courses, tests performed, years of experience.
So, of course, it is, especially at the beginning, an exhausting but vital career for the real estate market.
Thus, what the realtor does is nothing that can be done by another professional, since the expertise of such an area is not interchangeable.
Although there are differences between realtor, real estate agent and broker they all share the same social function. What is it? Connecting people!
This is completely united with what we at Br Capital USA believe. We believe that a more ethical and fair world happens when all stakeholders are put on the same table in order to reach a mutually beneficial agreement.
We are a company that believes that capitalism is still a way to offer financial stability to all.
In this context, we want to help realtors and homeowners to be helped in a completely fair and noble way.
Finally, it is 100% urgent that all myths about such a valuable career be broken in order for this profession to be valued and praised, because without it the real estate market wouldn’t exist.
In short, investing in a realtor is more than facilitating your negotiation, it is making it more professional, correct and socially inclusive.
So, you will be able to make one of (or perhaps the biggest) decisions of your life in a much more correct and calm way. In other words, choosing a good realtor gives you the confidence to make the best deal.