| Myths about Real Estate Agents |
| Myth #1 "All Real Estate Professionals, can be called Realtors." Although this is not true, I myself use the term quite often to describe people who practice Real Estate (Old habits are hard to break). To be called a Realtor you must belong to the National Association of Realtors (NAR). This organization holds its members to a Code of Ethics and Standard of Practice. It is actually illegal for anyone to call themselves a Realtor without belonging to The NAR. Myth # 2 "Real Estate Agents make lots of money and do practically nothing to earn it." If this were true wouldn't most everyone want to become one, the United States and other countries through out the world would be overrun with us. I know, it appears were everywhere these days but there aren't as many of us as you might think. At the end of the year 2006 according to the U.S. Population Clock, our country had an estimated population of 300,870,531 give or take a few. The NAR membership roster compiled at the end of 2006 contained 1,357,732 members at large. So that means that less that .0045% of our population are Realtors. If people really believed this you’d think the % would be much higher. If you have a few seconds, let’s say you’re a Buyer……. take a look at what most Real Estate Professional do as your Agent before, during and after your transaction. If you are a Seller here is what a Listing Broker can do for you, to market your property and complete your transaction. Myth # 3 "Real Estate Agents make too much money". I can’t tell you how many people believe that Real Estate Agents make, let’s say, a “6%” commission on the sale of a property. (Remember, commissions are negotiable between the Seller and their Listing Broker.) If you are under this impression let me break it down for you. What a Real Estate license allows one to do is, collect a fee for representing a principle in the purchase (Buyer) or sale (Seller) of their property. This activity is overseen buy The Department of Real Estate in California. Real Estate Agents or Sales Associates are not allowed to contract on their own to receive a commission. They must be under the supervision of a licensed Broker. Agents represent the majority of Buyers and Sellers in Real Estate transactions. Real Estate Brokers are the ones who receive the fee from the Client and then by agreement disperse the compensation to the Agent or Sales Associate. Typically this is around 60%. Some Agents make more and some make less depending on their experience. So for most transactions there will be 4 parties who will be sharing in the commission. 1) The Sellers Broker…………………………1.5% 2) The Sellers Agent/ Sales Associate……...1.5% 3) The Buyers Broker…………………………1.5% 4) The Buyers Agent/Sales Associate………1.5% Total..........................................................6.0% Then there are the expenses............... Real Estate business expenses typically include: • Income taxes on real estate income (25% Federal tax, 15.4 % self employment tax, 10% State tax,) • Automobile expenses (repairs, service, tires, etc.) • Gasoline • Auto insurance • Real Estate board dues • Desk fees • Franchise fees • MLS fees • Advertising • Sign expenses • Purchasing forms • Equipment (computers, printers, etc.) • Computer on-line services • Professional liability insurance • Postage • Copying • Referral fees to other agents • Cellular telephone • Business telephone These expenses run on average of at least 1/3 of what a Real Estate Professional receives in commission. Leaving around 1% for living expenses. Not a bad living but certainly not as much as some have suspected. Myth # 4 “Real Estate Agents are only in it for the money” Let’s look at what a Real Estate Agent does even before there is a hope of reimbursement for their time and expenses. Imagine expending your own resources, on dues to different national, state and local organizations. There will be major expenses for things like advertising, liability insurance, equipment and office supplies. You may spend hours of your time in preparation, research and continuing education. Hopefully then, you will have the opportunity to share your knowledge and resources with other people. All of this so far is with only an expectation of some semblance of loyalty from the recipient of your efforts. You must realize that you’re in a business that gives much more than it receives. You will spend a great deal of time answering questions, researching information and chauffeuring those who will not be able to compensate you for your efforts. I say “will not” because, once they have asked all the questions and seen what there is to see, they may find that it just wasn’t what they expected. They may have financial issues that they were unaware of and have to “hold off” for a while. They may just plain not like you. That’s right you will come in contact with people, who after spending some time with you, realize “it’s not going to work”. What kind of person would do this? Who in their right mind would put themselves in this position? Let’s recap, you spend most of your time helping people for free until you meet someone who can take all of your experience and expertise and actually put it to use. Then after further effort while representing them through the closing of their transaction, if it closes, will you be rewarded. The kind of people I’m talking about were once teachers, homemakers, and public servants. Most of the men in this profession have served in the armed forces. These people have a track record of not being “in it for the money”. They have a passion for making a difference in other people’s lives. Think about it, who is more than likely going to be your first friend when you come to a new town? Who is going to tell you about their favorite restaurants, dry cleaners, handy men, etc? Who will help with setting up your utilities or check on your home when you’re out of town? Your Real Estate Agent, that’s who. Unfortunately there are those who have crept into this profession who are, “only in it for the money”. Trust me when I say that they are few and far between. Copyright Tony Krieg 10/30/07 Search for Listings, Community Information, Market Statistic Services I provide for Home Buyers 1. Explain the benefits of a Buyer-Broker Agreement. 2. Determine the approximate price range for which the buyer can qualify. 3. Describe the services lenders and loan brokers perform. 4. Explain the benefits and drawbacks of various types of home financing. 5. Explain loan fees and their relationship to the cost and rate of loans. 6. Provide ideas for alternate methods of finance or purchase. 7. Explain the use and benefit of a lender pre-qualification letter. 8. Explain the use and benefit of a lender pre-approval letter. 9. Provide a choice of several lenders or loan brokers. 10. Review your financial and personal plans as they relate to real estate. 11. Make sure you are buying a home that meets your needs. 12. Provide you with an "Agency Disclosure Statement". 13. Explain the Agency Disclosure Statement. 14. Assist in developing a prioritized list of home selection criteria. 15. Keep track of those criteria when analyzing various properties. 16. Inform you of possible tax benefits in purchasing real estate. 17. Explain some of the drawbacks of real estate ownership. 18. Explain how the structure of your purchase can affect you financially. 19. Help to determine the most advantageous time to make an offer. 20. Help to determine the most advantageous time to close your escrow. 21. Provide a sample copy of the purchase agreement for you to study. 22. Provide a list of appropriate neighborhoods in your price range. 23. Provide rating data about local schools. 24. Provide locations and characteristics of shopping areas. 25. Provide information about local and regional transportation systems. 26. Share information about available recreation facilities. 27. Explain sports facilities and programs that exist locally. 28. Provide information on various churches and religious institutions. 29. Give facts and resources on any negative aspect of the local area. 30. Explain how the Realtor Multiple Listing System (MLS) works. 31. Search the MLS for appropriate properties. 32. Examine local newspapers for appropriate homes.* 33. Use the internet to find properties that meet client's parameters.* 34. Review preforeclosure properties for that might be suitable for you. * 35. Check “For-Sale-By-Owner" properties which may suit your needs.* 36. Contact owners of property and arrange to show homes to you. 37. Efficiently show appropriate homes at times convenient to you. 38. Share personal knowledge about local history, weather, political activity, or other factors which may affect your purchasing decision. 39. Explain real estate terminology throughout the home buying process. 40. Discuss the benefits and drawbacks of various styles of homes. 41. Discuss the pros and cons of various building materials. 42. Describe how the orientation of the home affects its comfort. 43. Show you how to add value to a home that may not be perfect, but has most of the features you require. 44. Act as a "sounding board" in your decision making process. 45. Provide information about the seller's motivation for selling. 46. Provide a "Comparative Market Analysis" to determine an appropriate offering price. 47. Write an offer which will best meet your needs and protect your interests. 48. Explain the significance of various clauses in the agreement. 49. Explain the lender's appraisal process. 50. Make sure that events and conditions agreed upon in the contract can be realistically performed within time limits provided. 51. Provide a written estimate of the costs to close the escrow, including down payment and the monthly payment under the terms of your offer. 52. Explain how offers to purchase property are presented. 53. Make an appointment to present your offer that meets everyone's' schedule. 54. Present your offer to the seller in a professional manner. 55. Add credibility to your offer by confirming your ability to perform under the terms of the agreement. 70. If requested, provide a list of reputable companies for environmental inspection. 71. If requested, provide a list of reputable companies for lead inspection. 72. Make arrangements for the various inspections, as required. 73. Be present, if possible, when inspections are conducted to add clarity to written report. Inspections usually take place during the work day. 74. Help interpret which report items are relatively minor and which require further clarification; 75. Assist in finding the least costly solutions to problems in reports. 76. Re-negotiate with seller to pay for items which are important, or a matter of health and safety. 77. Arrange, as requested, to have another expert give an opinion in cases where experts express differing opinions; 78. Arrange for repairs, as necessary. 79. Provide a Transfer Disclosure Statement from the seller. 80. Gather information about any items disclosed which may be of concern. 81. Rewrite the contract, as needed. 82. Provide Seismic Hazard Report, as applicable. 83. Provide Flood Zone Report. as applicable. 84. Provide a Smoke Detector Confirmation Statement. 85. Provide FIRPTA disclosure to seller. 86. Give the buyer a choice of title and/or escrow company. 87. Open escrow. 88. Deposit earnest money. 89. Review terms. price and projected closing date with escrow officer. 90. Inform the officer of all parties to the transaction and how to contact them, 91. Provide the officer with conditions and data needed to order payoff demand from existing lender. 92. Order a Preliminary Title Report. 93. Explain Title Insurance and any exceptions to it. 94. Review Preliminary Title Report for any "clouds on title", unforeseen liens, easements or encroachments which could delay closing. 95. Explain any Covenants, Conditions and Restrictions, as appropriate. 96. Make sure that pending sales has been reported to MLS. 97. Closely follow deadlines listed in the contract. Errors in timing can nullify the agreement. 98. Work with lender to provide information and approvals as stipulated. 99. Provide weekly updates on escrow progress to buyer. 100. Arrange for buyers to inspect the property again, as needed. 101. Explain the protections provided by a Home Warranty Plan. 102. Order a Home Warranty. as requested. 103. Explain Home Owner's insurance requirements. 104. Assist in arranging for Home Owner's insurance, as requested. 105. Provide a list of reputable moving companies, as requested. 106. Provide a list of telephone numbers for the local gas, electric, water, garbage and cable TV companies. 107. Arrange for a smooth transfer in utility service from seller to buyer. 108. Help buyers locate temporary housing, as needed. 109. Assist buyers in locating reliable child care, as requested. 110. Coordinate move out by seller and move in by buyer. 111. Negotiate for buyers if the escrow process takes longer than expected. 112. Negotiate Interim Occupancy Agreement, as required. 113. Draw up a rental agreement if seller needs to stay after Close of Escrow. 114. Conduct a final "walk through" property inspection to assure that nothing significant has changed since the Purchase Agreement was signed. 115. Make arrangements to rectify any problems discovered during walk through. 116. Provide written explanation of the various ways to hold title to real property. 117. Review the closing documents for accuracy. 118. Explain closing papers to buyer. 119. Arrange for wire transfer of funds, as necessary. 120. At all times, protect the buyer's interest and more.... *These services are only available to clients who have a Buyer Broker agreement. Services I provide for Home Sellers 1. Order a complete property profile of your house. 2. Review the property profile for accuracy. 3. Perform a professional "Competitive Market Analysis" of your house. 4. Calculate "Neighborhood Absorption Rate" of your property. 5. Create a customized market plan that targets your most likely buyers. 6. Develop a specialized pricing strategy for your property. 7. Calculate an estimate of your net proceeds from the sale. 8. Provide you with information on pricing your house for sale. 9. Provide you with information on preparing your house for sale. 10. Tour your property from the "Buyers' Standpoint". 11. Conduct a complete "staging" analysis of your house. 12. Provide instructions to help your house sell at a higher price. 13. Review interior of the house to maximize attractiveness. 14. Assist the seller in storing large pieces of furniture. 15. Review exterior of the house to maximize "curb appeal". 16. Assisting in making the exterior as attractive as possible. 17. Integrate photographs into marketing materials. 18. Develop "New on the Market" postcards. 19. Explain the advantages of seller carry-back financing. 20. Conduct a thorough and diligent visual inspection of the property. 21. Review the status of any encumbrances against the property. 22. Review the status of any property tax liens against the property. 23. Obtain copies of architectural drawings relative to the property. 24. Obtain copies of permits relative to the property. 25. Accurately measure the house. 26. Develop advertising copy for marketing. 27. Place house description in the Realtor Multiple listing System. 28. Provide an "Agency Relationships Disclosure Statement". 29. Assist in completion of the "Agency Confirmation". 30. Sign agent's portion of "Agency Confirmation". 31. Review Flood Disclosures. as required. 32. Review Seismic Disclosures, as required. 33. Review lead Paint Disclosure requirements. 34. Review the Environmental Hazards Disclosures requirements. 35. Review the Smoke Detector Compliance requirement. 36. Review the Foreign Investment in Real Property Tax Act. 37. Provide a "Statement of Identity" for completion. 38. Review Competitive Marketing Analysis. 39. Explain commission splits between listing and Selling brokers. 40. Review how commission split affects house showings. 41. Review Broker Employment Agreement with seller. 42. Provide "Marketing Guarantee" to seller. 43. Review benefits and drawbacks of using real estate lock box. 44. Review benefits and drawbacks of using For Sale sign. 45. Arranging for pest control inspection of the house. 46. Arranging for contractor's inspection of the house. 47. Arranging for roof report of the house, as necessary. 48. Arranging for septic tank inspection on the house, as appropriate. 49. Arranging for county inspection, as necessary. 50. Arranging for smoke detector inspection, as necessary. 51. Arranging for geologic inspection, as necessary. 52. Arranging for soils report, as necessary. 53. Assisting in evaluation of inspection reports. 54. Assisting in correction of significant items in reports, as requested. 55. Provide Transfer Disclosure Statement to seller. 56. Complete listing agent's portion of Disclosure Statement. 57. Place professional For Sale sign on property, as authorized. 58. Place appropriate riders on sign. 59. Place brochure box on sign. 60. Place lock box on property, as authorized. 61 . Directly contact agents with qualified buyers about the property. 62. Respond to agent questions about the property. 63. Respond to buyer questions about the property. 64. Design attractive color flyers for the property. 65. Obtain a report on academic status of local schools. 66. Prepare flyers for potential buyers showing financing options. 67. Prepare Open House Guest Register. 68. Assist home owner in preparing home for showing. 69. Develop a convenient Open House schedule with owner or tenants. 70. Hold house open to the public, as warranted. 71. Conduct telephone cold calls to target market, as necessary. 72. Periodically update marketing program, as necessary. 73. Write advertising copy for various media. 74. Prepare press release for noteworthy properties. 75. Print color flyers. 76. Provide flyer display stand for inside the house. 77. Deliver guest register to seller. 78. Deliver flyers to seller. 79. Provide copy of MLS listing to seller. 80. For vacant properties, coordinate the use of rental furniture. 81. Order copies of Covenants, Conditions & Restrictions, as necessary. 82. Place appropriate information into Multiple Listing System. 83. Order professional photo of the property to be taken for MLS> 84. Conduct door-knocking campaign in neighborhood, as appropriate. 85. Prepare "Just Listed" postcards for potential buyers. 86. Mail "Just Listed" postcards to potential buyers. 87. Meet and show potential buyers the property. 88. Follow-up with agents who have shown the property to customers. 89. Follow-up with potential buyers from open house opportunities. 90. Canvass centers of influence to locate potential buyers. 91. Arrange for a tour of the property for al/ agents in the area. 92. Develop a program to attract agents to "Brokers' Open" tour. 93. Obtain other real estate agents' opinions of home pricing strategy. 94. Obtain other real estate agents' opinions of home staging. 95. Provide weekly status report to seller by phone or in-person. 96. Review local news sources for changes in neighborhood. 97. Place Open House advertisements, as appropriate. 98. Strategically place Open House signs to attract buyers. 99. Assist seller in conforming with Fair Housing Laws. 100. Provide refreshments for Open House guests. 101. Review results of Open House with Seller. 102. Prequalify all potential buyers before offers are made. 103. Periodically review progress of marketing program. 104. Send "Thank You" notes to agents who show the property. 105. Keep brochure box filled with flyers. 106. Periodically update MLS information. 107. View all competing houses for sale. 108. Coordinate presentation of offers to purchase the house. 109. Negotiate with potential buyers in professional, unemotional manner. 110. Review the financial impact of any offers with seller. 111. Write Counter-Offers, as necessary. 112. Make sure escrow is open in a timely manner. 113. Make sure initial deposit is placed into escrow in a timely manner. 114. Make sure deposit increases are placed into escrow on time. 115. Make sure that buyer applies for a loan with contracted period. 116. Provide access to property to inspectors, as necessary. 117. Make sure seller places all necessary documents into escrow. 118. Arranging for seller to sign necessary documents. 119. Assisting seller in transferring utilities to buyer. 120. Assisting seller in moving to a new residence. 121. Providing keys to buyer. 122. Other miscellaneous activities that help a house to sell. |
