|
|
|
Real Estate Tips |
Real
Estate Tools |
Ron Schmeadick,
CRB Co-Owner and Associate Broker, Realty Executives,
Eugene, Oregon.
Can a real estate agent really help me in buying and
selling property? The answer is YES!
When you're ready to think about buying or selling your
property, you need to ask yourself the following
questions: Do you have the time, energy, sources of
information, and contacts to do the job yourself? If you
were one of the 'do-it-yourself' people, would the
results be as good or better than they would be if you
had professional assistance?
|
All
Calculators
Mortgage Calculator
Advanced Calculator
Afford Calculator
Finance Calculator
|
Would it have gone
smoother? Would it have given you more personal time?
Would you have purchased for less, or sold for more, if
a real estate agent was involved? Read the following
information and learn how a real estate agent can help
you understand everything you need to know about a real
estate transaction.
The
Buying Process
The process of buying a home or investment generally
starts with determining your buying power; that is, your
financial reserves plus your borrowing capacity. If you
give a real estate agent some basic information about
your available savings, income and current debt, they
can refer you to lenders best qualified to help you.
Most lenders -- banks and mortgage companies -- offer
limited choices.
Finding
Once you know how much you can and want to invest, the
next step is to find the properties that most nearly fit
your needs. This is the time to choose a real estate
licensee. When picking a real estate agent look for one
who is also a REALTOR®. A REALTOR® is a member of the
NATIONAL ASSOCIATION OF REALTORS®, a real estate trade
association, and all members agree to abide by a 17
article Code of Ethics. A REALTOR® has many resources
to assist you in that search. Sometimes the property you
are seeking is available but not actively advertised in
the market, and it will take some investigation by your
agent to find all available properties.
Selecting
Your job is to make the final selection of the right
property for you. This is when excitement and emotion
run high. Your real estate agent can assist you in the
selection process by providing objective information
about each property. Agents who are REALTORS® have
access to a variety of informational resources. REALTORS®
can provide local community information on utilities,
zoning. schools, etc. There are two things you'll want
to know. First, will the property provide the
environment I want for a home or investment? Second,
will the property have resale value when I am ready to
sell?
Negotiating
There are a myriad of negotiating factors, including,
but not limited to price, financing, terms, date of
possession, and often the inclusion or exclusion of
repairs and furnishings or equipment. The purchase
agreement should also provide a period of time for you
to complete appropriate inspections and investigations
of the property before you are bound to complete the
purchase. Your agent can advise you as to which
investigations and inspections are recommended or
required.
Due Diligence
With a negotiated agreement in hand, it is time to
complete the evaluation of the property. Depending on
the area and property, this could include inspections
for termites, dry rot, asbestos, faulty structure, roof
condition, septic tank and well tests, just to name a
few. Your agent can assist you in finding qualified
responsible professionals to do most of these
investigations and provide you with written reports. You
will also want to see a preliminary report on the title
of the property. Title indicates ownership of property
and can be mired in confusing status of past owners or
rights of access. The title to most properties will have
some limitations; for example, easements (access rights)
for utilities. Your agent, title company or attorney can
help you resolve issues that might cause problems at a
later date.
Financing
As soon as you are reasonably sure the property is right
for you, the process of obtaining financing begins. Your
agent can help you in understanding different financing
options and in identifying qualified lenders.
Closing or Settlement
Finally, there is the closing, or settlement, as it is
known in different parts of the country. Every area has
its own unique customs. In some areas, the title or
escrow company will handle this process. In other parts
of the country, an attorney does it all. Again, your
real estate agent can guide you through this process and
make sure everything flows together smoothly.
Selling
Real Estate
Pricing
This process generally begins with a determination of a
reasonable asking price. Your real estate agent can give
you up-to-date information on what is happening in the
marketplace and the price, financing, terms, and
condition of competing properties. These are key factors
in getting your property sold at the best price, quickly
and with minimum hassle.
Marketing
The next step is a marketing plan. Often, your agent can
recommend repairs or cosmetic work that will
significantly enhance the salability of the property.
Marketing includes the exposure of your property to
other real estate agents and the public. In many markets
across the country, over 50% of real estate sales are
cooperative sales; that is, a real estate agent other
than yours brings in the buyer. Your agent acts as the
marketing coordinator, disbursing information about your
property to other real estate agents through a Multiple
Listing Service or other cooperative marketing networks,
open houses for agents, etc. The REALTOR® Code of
Ethics requires REALTORS® to utilize these cooperative
relationships when they benefit their clients.
Advertising is part of marketing. The choice of media
and frequency of advertising depends a lot on the
property and specific market. For example, in some
areas, newspaper advertising generates phone calls to
the real estate office but statistically has minimum
effectiveness in selling a specific property.
Overexposure of a property in any media may give a buyer
the impression the property is distressed or the seller
is desperate. Your real estate agent will know when,
where and how to advertise your property.
There is a misconception that advertising sells real
estate. The National Association of REALTORS® studies
show that 82% of real estate sales are the result of
agent contacts through previous clients, referrals,
friends and family, and personal contacts.
Security
When the property is marketed with the agent help, you
do not have to allow strangers into your home. Agents
will generally pre-screen and accompany qualified
prospects through your property.
Negotiating
The negotiation process deals with much the same issues
for both buyers and sellers, as noted above under the
buying process. Your agent can help you objectively
evaluate every buyer's proposal without compromising
your marketing position. This initial agreement is only
the beginning of a process of appraisals, inspections,
and financing -- a lot of possible pitfalls. Your agent
can help you write a legally binding, win-win agreement
that will be more likely to make it through the process.
Monitoring, Renegotiating and Closing
Between the initial sales agreement and closing (or
settlement), questions may arise. For example,
unexpected repairs are required to obtain financing or a
cloud in the title is discovered. The required paperwork
alone is overwhelming for most sellers. Your agent is
the best person to objectively help you resolve these
issues and move the transaction to closing (or
settlement).
How Do Real Estate Agents Get Paid?
Real estate agents or brokers are generally paid through
the sales commission paid by the seller when a
transaction closes. Agents have expenses and financial
obligations just like you, so it will be to your mutual
benefit if you choose a real estate agent and stick with
that person. The agent will respect your loyalty and
respond with a sincere commitment to you.
Why A REALTOR®?
All real estate licensees are not the same. Only real
estate licensees who are members of the National
Association of REALTORS® are properly called REALTORS®.
They proudly display the "REALTOR®" logo on
the business card or other marketing and sales
literature. REALTORS® are committed to treat all
parties to a transaction honestly. REALTORS® subscribe
to a strict code of ethics and are expected to maintain
a higher level of knowledge of the process of buying and
selling real estate. An independent survey reports that
84% of home buyers would use the same REALTOR® again.
Using
a REALTOR®
You Be the Judge!
Real Estate transactions involve one of the biggest
financial investments most people experience in their
lifetime. Transactions today usually exceed $100,000. If
you had a $100,000 income tax problem, would you attempt
to deal with it without the help of a CPA? If you had a
$100,000 legal question, would you deal with it without
the help of an attorney? Considering the small upside
cost and the large downside risk, it would be foolish to
consider a deal in real estate without the professional
assistance of a REALTOR®!
© Copyright NATIONAL ASSOCIATION OF REALTORS® and
RealSelect, Inc. 1995, 1996, 1997, and 1998. All rights
reserved. No reproduction, distribution, or transmission
of the copyrighted materials at this site is permitted
without the written permission of RealSelect, Inc.
|
|
|