The terms agent, broker and REALTOR® are often used interchangeably, but have very different meanings. For example, not all agents (also called salespersons) or brokers are REALTORS®.
As a prerequisite to selling real estate, a person must be licensed by the state in which they work, either as an agent/salesperson or as a broker. Before a license is issued, minimum standards for education, examinations and experience, which are determined on a state by state basis, must be met.
After receiving a real estate license, most agents go on to join their local board or association of REALTORS® and the NATIONAL ASSOCIATION OF REALTORS®, the world's largest professional trade association. They can then call themselves REALTORS®. The term "REALTOR®" is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics (which in many cases goes beyond state law).
In most areas, it is the REALTOR® who shares information on the homes they are marketing, through a Multiple Listing Service (MLS). Working with a REALTOR® who belongs to an MLS will give you access to the greatest number of homes.
There are many important reasons to use a REALTOR®. Some of the duties your REALTOR® will perform for you include:
FSBO -- an acronym commonly used by REALTORS® to describe a home that is "For Sale By Owner." You¹ve probably seen these words scrolled upon signs in front of homes around our community. Why do people try to sell their own homes? Good question.
Typically, the reason is to avoid having to pay a commission to a real estate agent. Is a FSBO a viable alternative for anyone wanting to sell a house?Probably not.
In this day and age, anyone who tries to sell his house without the services of a trained professional must have
1. a thorough knowledge of his community's housing market, the mortgage industry, real estate appraisal and valuation, advertising and marketing, insurance, and the area's regulatory requirements for the transfer of property, and
2. plenty of time on his hands.
Is avoiding the payment of a commission worth the time and risk?
From the point of view of the REALTOR®, some risk is present for anyone selling a home, including the REALTOR®. That's right -- the REALTOR®. The premise is that of risk for reward. Unlike other trained professionals with whom you work on certain business and personal matters, the REALTOR® only gets paid when the sale is complete. Try telling your doctor that you¹ll only pay him if and when he cures you!
Aside from the broad body of knowledge a REALTOR® has about all aspects of a real estate sale, the REALTOR® takes the time to see each of the steps through.
Suppose a potential buyer is transferring to Central Florida and will be in on a visit on Thursday afternoon. First of all, how would they even know your house is on the market? It would not be listed with the Osceola County Assn. of REALTORS®¹s Multiple Listing Service (MLS). Since many transferees opt to use a REALTOR® to expedite their transfer, their REALTOR® couldn't possibly show your home because he doesn't know it's on the market either!
Let's say they happen to drive by your home and want to tour it at 1:00 p.m. You and your spouse will be at work and your children at school. Who lets them in? Who will be there during the home tour to answer their questions? Can you or your spouse easily get off work to be there?
Let's say they like the house and want to present an offer. Do you know where to get the legal forms or would you feel comfortable with something handwritten? What is the next step? What disclosure forms are required by law?
Let's say they make an offer contingent upon financing. You take the home off the market, assured by them that loan approval is merely a formality. A month passes -- no word. Six weeks goes by and you get a phone call from the potential buyer explaining that they did not quality for the loan amount. Did you get earnest money up front? If not, then you chalk it up to experience and put your house back on the market. Could you have gotten someone's opinion early on that the buyer would be unable to qualify for the appropriate loan amount?
Without belaboring the point, all of the issues addressed above are taken care of by a REALTOR® selling someone's home. And they do it while you work, spend time with your family, go to the movie, visit your relatives or whatever.
And, more importantly, they put the time and effort into each step of the process (risk) hoping to earn their commission at closing (reward). Granted, sometimes their risks aren't as great as at other times. Some houses sell quickly, others do not. Research conducted by the National Association of REALTORS® has found that not only do homes sell faster when the owners contract with a REALTOR®, but they generally sell at a higher price.
Put your faith and trust in a professional -- a REALTOR®. You'll minimize the risk and reap the rewards of a smooth selling process in a reasonable amount of time.
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