Monthly Archives: December 2016

Your Real Estate Double Agent

Choosing a real estate agent is perhaps one of the most critical parts of the real estate process as that agent will become your closest ally in the long term effort to buy or sell a home. Real estate transactions are major milestones in a person’s life and that real estate agent is the key person to be involved in making sure your wants and needs are met throughout that process.

After that extensive process, you are then faced with a person that you have invested a great amount of time and effort in. Trusting that real estate agent to represent you fully at all times may seem to be at the foundation of a realtor’s responsibilities, but there are other types of responsibilities those agents are motivated to serve that you need to be aware of.

Knowing who is on your side during a real estate transaction can go a long way towards helping you not only select the best agent but do your own best job throughout a real estate transaction to provide that agent with information that will help you buy or sell a home. For example, many realtors through the course of showing a prospective home buyer different properties will show them a home they are listing.

Obviously, that dual responsibility of representing the best desires of the buyer and seller can create a conflict of interest and should you informally say that you would pay a particular amount for a property, that real estate agent is more or less obligated to share that information with the seller. Of course, this can ruin any negotiating tactic you might want to try.

Real estate agents are required to disclose when this is the case and sometimes a special kind of arrangement, the dual agency arrangement, is used to at least make sure that the buyer and seller are both served properly. Under a dual agency agreement, the buyer and seller are represented by different parties working for the broker that has both the buyer and seller as clients.

In this type of agreement, both buyer and seller must agree to the situation and the individual real estate agents are charged with making sure they serve their own client fully. In some real estate markets, this kind of agreement can be common if a particular real estate broker has a multitude of listings and a strong supply of prospective buyers. It is only a matter of time until a buyer and seller match up on a property for an individual broker.

The conflicts of interest in these types of situations are largely removed by the dual agency agreement, but you must still be sure that your needs are being met by your agent. You want your agent working vigorously for you and that can mean negotiating fervently with another agent in their same office, perhaps one that they are friends with and have daily interaction with. That can be difficult for some agents and a dual agency agreement takes another layer of oversight by the buyer or seller to make sure that things are on the up and up.

After expending so much energy to choose your real estate agent, you may feel that you can sit back and let that agent do their job without interference. While that is generally true, you still must remain active in the process, asking the right questions and making sure that your needs are communicated to the other side.

In a strange situation like a dual agency agreement, a special emphasis is needed on that active, vocal role of a buyer or seller to make sure that a transaction is completed to the best ability of the agent involved. Never be afraid to speak up and get involved.

The Power of Real Estate Competition

To say that competition defines the value of homes is a bit short-sighted, though it does impact the price you will see for your home. The only thing that can define the value of any piece of real estate is a buyer willing to pay for it, but the market and the competition seen within the market can give a prospective buyer a framework to derive a value from.

That is a powerful trait of market competition, underscoring the need to understand the market and diagnose what kind of competition your home might see. Every home for sale in your local area has the potential to be a direct competitor to your own home. Of course, houses vary in size and amenities, so only those that most closely resemble your own property truly present meaningful competition for a buyer’s attention.

Pricing a home is often the most crucial step of the real estate process and can ultimately determine what kind of transaction you will have. If you price your home properly, you will see a short time on the market and a sale price to your liking. If you price the home wrong, you could sit in limbo for months and have to accept less than what you’d like.

The difference between those two outcomes can hinge on the level of competition in the area for your property. The first step to combating that competition is understanding the current market trends to determine if it is a buyer’s or seller’s market. If homes are tending to stay on the market for a long time, that is a good indication that supply is out distancing demand, creating a buyer’s market. That can affect your pricing strategy.

A buyer’s market also means that a home may have to be priced more aggressively and more directly positioned against competition to sell quickly. One way to sell a home is set the price a bit higher than market value in order to drop the price gradually until it nets a buyer. However, that can mean a long stay on the market and a weak position in relation to competition in the area.

Another way is to do a careful comparative analysis of all homes in the area to not only help price the home, but determine the amount of competition amongst similar properties the market holds. If there are many homes like yours, it may be wise to price the home more aggressively to draw interest in a crowded market segment.

Conversely, if your comparative analysis turns up relatively few properties on the market that are similar to yours, you can probably afford to price the home a bit higher as less competition gives you a better chance at garnering interest without dropping price to get it. Obviously, these are two very different situations and without understanding the level of competition in your area, you cannot make the distinction between which route to take.

Remember, a prospective buyer is someone just like you. That buyer wants to get a great home for a great price and will often go through quite a few homes and showings in order to reach that goal. Make it easy on them and understand the competition so that you can price the home to motivate a seller into seeing that your home is not only full of the amenities they want, but it is priced more reasonably than competing homes as well.

Many real estate agents will do a comparative market analysis for you in order to price the home. Get involved in the process and tell your real estate agent that you want to help determine the pricing strategy of the property. The function of a real estate agent is to help you sell your home, so be sure to shape the way it is sold. Taking control of the situation and understanding the competition for your home can help you ensure a smoother real estate transaction for both you and your agent.

Real Estate Vocabulary – Who Are The Players

When beginning a new venture, there is always a new language to learn. In real estate knowing the right language can be the difference between making good choices, and having serious problems down the road. To help buyers and sellers get on the right track, here are a few key words so you, too, can tell the different between real estate personnel.

The definitions here are for the most typical use, though in some states the definitions of Real Estate Agent and Real Estate Broker may be different. It is wise of confirm what an agent or broker means by that before entering into a business relationship with them.

Real Estate Agent

A real estate agent is an independent real estate sales person. Typically they are required to be licensed by the state. The majority of Real Estate Agents are employed by or under contract with a real estate broker. Real Estate Agents earn a percentage of the broker’s commission when they sell a home.

Real Estate Broker

A Real Estate Broker has undergone further training for additional real estate licensing. Real Estate Brokers are the homeowner’s direct link to the real estate market. While they do work as sales people, just like Agents, they spend an equal or greater amount of time searching for new homes to sell. Brokers are frequently in charge of supervising the purchasing process and often combine their real estate business with law, insurance, financing or some other related practice.

Realtor®

Frequently in the real estate business a Real Estate Agent or Broker will call himself a Realtor. An agent or broker is qualified to do this when they become members of the National Association of Realtors. The NAR is the worlds largest professional association. In order to be a member of the NAR, and there fore be a Realtor, agents and brokers must agree to follow the NAR’s strict Code of Ethics. This Code of Ethics protects buyers and sellers from unscrupulous business people. Making a point to work with a Realtor instead of an unaffiliated Real Estate Agent or Broker is one small guarantee that a buyer or seller will be treated well.

MLS or Multiple Listing Service

The MLS is a service that real estate brokers and agents have access to. It is a complete listing of all of the real estate available for sale in the area. Because maintaining this system isn’t free, there is a cost to subscribe. By working with an agent, buyers automatically has access to the MLS in addition to the expert advice of a real estate professional. With the technological advances of the past twenty years, accessing the MLS for cross country buyers is as simple as helping someone within the community. This streamlines the home buying process for dozens of buyers every day