Why a Realtor®?

What is a Realtor®?
Why Use a Realor®?
Role of a Realtor® in a Real Estate Transaction
Realtor® Code of Ethics

What is a Realtor®?

REALTORS® are licensed real estate professionals who are members of the National Association of REALTORS®, The Voice for Real Estate®. REALTORS® are the most trusted source for real estate information.

The term REALTOR® is not a generic term; it is a registered collective membership mark that identifies a licensed real estate professional who is a member of NAR. The term REALTOR® is NOT synonymous with “real estate agent.” There are approximately 3.2 million licensed real estate professionals in the United States, and 2.0 million of them are considered “active licensees,” but only 1.2 million are members of NAR. REALTORS® work in both residential and commercial real estate as brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry.

There are more than 1,400 local associations and boards and 54 state and territory associations of REALTORS®. Members join NAR through their local REALTOR® association.

REALTORS® subscribe to NAR’s strict Code of Ethics and Standards of Practice, which aims to protect consumers in the real estate transaction.

The Code stipulates that REALTORS® be honest with all parties involved in a transaction, whether buyer, seller or cooperating agent. The Code requires REALTORS® to identify and take steps to eliminate practices which may damage the public or which might discredit or dishonor the real estate profession. REALTORS® must take a refresher training course on the Code of Ethics every four-year cycle. Real estate licensees who join NAR are required to take orientation classes on the Code.

REALTORS® build communities.

The role of REALTORS® in our communities goes far beyond the real estate transaction process of buying and selling. As local business owners and residents, REALTORS® are vested in building healthy and vibrant communities across the country, neighborhood by neighborhood. As the leading advocates for housing issues, REALTORS® across the country participate in NAR’s Housing Opportunity Program, which provides tools and resources for promoting affordable housing at local, state and national levels. NAR partners with other real estate industry organizations to promote housing opportunities through the HOPE Awards (Home Ownership Participation for Everyone). The awards recognize REALTORS®, individuals and groups who have made outstanding contributions to increasing minority homeownership. The Good Neighbor Awards honor REALTORS® who have made an extraordinary commitment to improving the quality of life in their communities through volunteer work. In addition, thousands of REALTORS® volunteer time and resources in community projects organized by their state and local REALTOR® associations.

REALTORS® add value to the real estate transaction.

REALTORS® handle hundreds, if not thousands, of real estate transactions over the course of their careers, and can counsel and guide sellers through the process.

REALTORS® have the expertise and experience to help sellers protect their investment and help buyers build theirs.

REALTORS® have access to educational opportunities and training in real estate specialties that are not available to other licensees. In these courses, REALTORS® learn to develop skills in guiding clients and customers through the complex real estate transaction process.

NAR offers advanced educational opportunities to its members that allow REALTORS® to offer a more diverse array of services with such accredited sub-specialties as buyer’s representation (ABR®), residential real estate expertise (CRS®), Internet readiness (e-PRO), and senior housing issues (SRES).

Through membership in NAR’s affiliated institutes, societies, and councils, REALTORS® stay abreast of the most recent trends in their fields, remain well-informed of industry developments in their specialized areas, and address industry issues more effectively.

REALTORS® are the leading advocate for private property rights, homeownership and housing issues.

Every year, NAR leads the way on Capitol Hill and in the corridors of Washington to keep homeownership a top national priority.

NAR’s support for the mortgage interest deduction and other federal policies helps keep housing more affordable and makes housing a great investment. Sound housing policies empower home seekers to purchase a home of their own.

REALTORS® care not only about helping people become homeowners, but also making sure families can keep their homes. They are actively engaged in buyer financing education and in pushing legislation that protects consumers in the real estate transaction. Visit www.REALTOR.org/subprime to learn more.

Why Use a Realtor®

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? 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 Sellement
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. A gain, 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. Over exposure 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.

Renegotiating
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).

Agent Payment
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®!

The Critical Role of the REALTOR®

Listed here are nearly 200 typical actions, research steps, procedures, processes and review stages in a successful residential real estate transaction that are normally provided by full service real estate brokerages in return for their sales commission. Depending on the transaction, some may take minutes, hours, or even days to complete, while some may not be needed. More importantly, they reflect the level of skill, knowledge and attention to detail required in today’s real estate transaction, underscoring the importance of having help and guidance from someone who fully understands the process – a REALTOR®. And never forget that REALTORS® are pledged to uphold the stringent, enforceable tenets of the REALTOR® Code of Ethics in their professional dealings with the public. Not every real estate licensee holds REALTOR® membership. Make sure yours does!

Pre-Listing Activities

Make appointment with seller for listing presentation
Send seller a written or e-mail confirmation of listing appointment and call to confirm
Review pre-appointment questions
Research all comparable currently listed properties
Research sales activity for past 18 months from MLS and public records databases
Research "Average Days on Market" for this property of this type, price range and location
Download and review property tax roll information
Prepare "Comparable Market Analysis" (CMA) to establish fair market value
Obtain copy of subdivision plat/complex lay-out
Research property's ownership & deed type
Research property's public record information for lot size & dimensions
Research and verify legal description
Research property's land use coding and deed restrictions
Research property's current use and zoning
Verify legal names of owner(s) in county's public property records
Prepare listing presentation package with above materials
Perform exterior "Curb Appeal Assessment" of subject property
Compile and assemble formal file on property
Confirm current public schools and explain impact of schools on market value
Review listing appointment checklist to ensure all steps and actions have been completed

Listing Appointment Presentation

Give seller an overview of current market conditions and projections
Review agents and company's credentials and accomplishments in the market
Present company's profile and position or "niche" in the marketplace
Present CMA Results To Seller, including Comparables, Solds, Current Listings & Expireds
Offer pricing strategy based on professional judgment and interpretation of current market conditions
Discuss goals with seller to market effectively
Explain market power and benefits of Multiple Listing Service
Explain market power of web marketing, IDX and REALTOR.com
Explain the work the brokerage and agent do "behind the scenes" and agent's availability on weekends
Explain agent's role in taking calls to screen for qualified buyers and protect seller from curiosity seekers
Present and discuss strategic master marketing plan
Explain different agency relationships and determine seller's preference
Review and explain all clauses in Listing Contract & Addendum and obtain seller(s) signature

Once Property is Under Listing Agreement

Review current title information
Measure overall and heated square footage
Measure interior room sizes
Confirm lot size via owner's copy of certified survey, if available
Note any and all unrecorded property lines, agreements, easements
Obtain house plans, if applicable and available
Review house plans and make copy
Order plat map for retention in property's listing file
Prepare showing instructions for buyers' agents and agree on showing time window with seller
Obtain current mortgage loan(s) information: companies and & loan account numbers
Verify current loan information with lender(s)
Check assumability of loan(s) and any special requirements
Discuss possible buyer financing alternatives and options with seller
Review current appraisal if available
Identify Home Owner Association manager if applicable
Verify Home Owner Association Fees with manager - mandatory or optional and current annual fee
Order a copy of Homeowner Association bylaws, if applicable
Research electricity availability and supplier's name and phone number
Calculate average utility usage from last 12 months of bills
Research and verify city sewer/septic tank system
Water System: Calculate average water fees or rates from last 12 months of bills
Well Water: Confirm well status, depth and output from Well Report
Natural Gas: Research/verify availability and supplier's name and phone number
Verify security system, current term of service and whether owned or leased
Verify if seller has transferable Termite Bond
Ascertain need for lead-based paint disclosure
Prepare detailed list of property amenities and assess market impact
Prepare detailed list of property's "Inclusions & Conveyances with Sale"
Compile list of completed repairs and maintenance items
Send "Vacancy Checklist" to seller if property is vacant
Explain benefits of Home Owner Warranty to seller
Assist sellers with completion and submission of Home Owner Warranty Application
When received, place Home Owner Warranty in property file for conveyance at time of sale
Have extra key made for lockbox
Verify if property has rental units involved. And if so:
Make copies of all leases for retention in listing file
Verify all rents & deposits
Inform tenants of listing and discuss how showings will be handled
Arrange for installation of yard sign
Assist seller(s) with completion of Seller's Disclosure form
"New Listing Checklist" Completed
Review results of Curb Appeal Assessment with seller and provide suggestions to improve salability
Review results of Interior Décor Assessment and suggest changes to shorten time on market
Load listing into transaction management software program

Entering Property in Multiple Listing Service Database

Prepare MLS Profile Sheet -- Agents is responsible for "quality control" and accuracy of listing data
Enter property data from Profile Sheet into MLS Listing Database
Proofread MLS database listing for accuracy - including proper placement in mapping function
Add property to company's Active Listings list
Provide seller(s) with signed copies of Listing Agreement and MLS Profile Sheet Data Form within 48 hours
Take additional photos for upload into MLS and use in flyers. Discuss efficacy of panoramic Photography

Marketing The Listing

Create print and Internet ads with seller's input
Coordinate showings with owners, tenants, and other Realtors®. Return all calls - weekends included
Install electronic lock box if authorized by owner. Program with agreed-upon showing time windows
Prepare mailing and contact list
Generate mail-merge letters to contact list
Order “Just Listed” labels & reports
Prepare flyers & feedback faxes
Review comparable MLS listings regularly to ensure property remains competitive in price, terms, conditions and availability
Prepare property marketing brochure for seller's review
Arrange for printing or copying of supply of marketing brochures or fliers
Place marketing brochures in all company agent mail boxes
Upload listing to company and agent Internet site, if applicable
Mail Out "Just Listed" notice to all neighborhood residents
Advise Network Referral Program of listing
Provide marketing data to buyers coming through international relocation networks
Provide marketing data to buyers coming from referral network
Provide "Special Feature" cards for marketing, if applicable
Submit ads to company's participating Internet real estate sites
Price changes conveyed promptly to all Internet groups
Reprint/supply brochures promptly as needed
Loan information reviewed and updated in MLS as required
Feedback e-mails/faxes sent to buyers' agents after showings
Review weekly Market Study
Discuss feedback from showing agents with seller to determine if changes will accelerate the sale
Place regular weekly update calls to seller to discuss marketing & pricing
Promptly enter price changes in MLS listing database

The Offer and Contract
Receive and review all Offer to Purchase contracts submitted by buyers or buyers' agents.

Evaluate offer(s) and prepare a "net sheet" on each for the owner for comparison purposes
Counsel seller on offers. Explain merits and weakness of each component of each offer
Contact buyers' agents to review buyer's qualifications and discuss offer
Fax/deliver Seller's Disclosure to buyer's agent or buyer upon request and prior to offer if possible
Confirm buyer is pre-qualified by calling Loan Officer
Obtain pre-qualification letter on buyer from Loan Officer
Negotiate all offers on seller's behalf, setting time limit for loan approval and closing date
Prepare and convey any counteroffers, acceptance or amendments to buyer's agent
Fax copies of contract and all addendums to closing attorney or title company
When Offer to Purchase Contract is accepted and signed by seller, deliver to buyers agent
Record and promptly deposit buyer's earnest money in escrow account.
Disseminate "Under-Contract Showing Restrictions" as seller requests
Deliver copies of fully signed Offer to Purchase contract to seller
Fax/deliver copies of Offer to Purchase contract to Selling Agent
Fax copies of Offer to Purchase contract to lender
Provide copies of signed Offer to Purchase contract for office file
Advise seller in handling additional offers to purchase submitted between contract and closing
Change status in MLS to "Sale Pending"
Update transaction management program to show "Sale Pending"
Review buyer's credit report results -- Advise seller of worst and best case scenarios
Provide credit report information to seller if property will be seller-financed
Assist buyer with obtaining financing, if applicable and follow-up as necessary
Coordinate with lender on Discount Points being locked in with dates
Deliver unrecorded property information to buyer
Order septic system inspection, if applicable
Receive and review septic system report and assess any possible impact on sale
Deliver copy of septic system inspection report lender & buyer
Deliver Well Flow Test Report copies to lender & buyer and property listing file
Verify termite inspection ordered
Verify mold inspection ordered, if required

Tracking the Loan Process

Confirm Verifications of Deposit & Buyer's Employment Have Been Returned
Follow loan processing through to the underwriter
Add lender and other vendors to transaction management program so agents, buyer and seller can track progress of sale
Contact lender weekly to ensure processing is on track
Relay final approval of buyer's loan application to seller

Home Inspection

Coordinate buyer's professional home inspection with seller
Review home inspector's report
Enter completion into transaction management tracking software program
Explain seller's responsibilities with respect to loan limits and interpret any clauses in the contract
Ensure seller's compliance with Home Inspection Clause requirements
Recommend or assist seller with identifying and negotiating with trustworthy contractors to perform any required repairs
Negotiate payment and oversee completion of all required repairs on seller's behalf, if needed

The Appraisal

Schedule Appraisal
Provide comparable sales used in market pricing to Appraiser
Follow-Up On Appraisal
Enter completion into transaction management program
Assist seller in questioning appraisal report if it seems too low

Closing Preparations and Duties

Contract Is Signed By All Parties
Coordinate closing process with buyer's agent and lender
Update closing forms & files
Ensure all parties have all forms and information needed to close the sale
Select location where closing will be held
Confirm closing date and time and notify all parties
Assist in solving any title problems (boundary disputes, easements, etc) or in obtaining Death Certificates
Work with buyer's agent in scheduling and conducting buyer's Final Walk-Thru prior to closing
Research all tax, HOA, utility and other applicable prorations
Request final closing figures from closing agent (attorney or title company)
Receive & carefully review closing figures to ensure accuracy of preparation
Forward verified closing figures to buyer's agent
Request copy of closing documents from closing agent
Confirm buyer and buyer's agent have received title insurance commitment
Provide "Home Owners Warranty" for availability at closing
Review all closing documents carefully for errors
Forward closing documents to absentee seller as requested
Review documents with closing agent (attorney)
Provide earnest money deposit check from escrow account to closing agent
Coordinate this closing with seller's next purchase and resolve any timing problems
Have a "no surprises" closing so that seller receives a net proceeds check at closing
Refer sellers to one of the best agents at their destination, if applicable
Change MLS status to Sold. Enter sale date, price, selling broker and agent's ID numbers, etc.
Close out listing in transaction management program

Follow Up After Closing

Answer questions about filing claims with Home Owner Warranty Company if requested
Attempt to clarify and resolve any conflicts about repairs if buyer is not satisfied
Respond to any follow-on calls and provide any additional information required from office files.

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