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Tips for Choosing the Right Realtor

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Tips For Choosing the Right Realtor

A record number of Americans are gearing up to buy their first homes.  This is a big decision that can bring a lot of questions including the big one. How do I choose the right realtor? We can help with that! Read below for simple tips that will help you find the best real estate agent.  Here’s a hint: the tools you need are actually right in front of you.

 

Ask Around

Just like recommending your favorite local coffee shop, word of mouth recommendations are still the best way to go to begin curating your list. Ask friends and family for realtor references especially if they are recent buyers. It’s important to note that just because a realtor might have been a good fit for someone you know, they still may not be the right one for you.

 

Find Your Neighborhood

Decide on the areas that you are interested in living in and narrow down your potential realtor list based on that.  You can research this online or drive those neighborhoods and take note of the realtors selling homes there. Working with an agent who has experience in successful sales in the area you want to live will put you several steps ahead.

 

Google!

It’s time to find out more about your potential prospects. Do a few Google searches to get to know their online persona.  As a first time home buyer, pick a realtor who is experienced and knowledgeable, but also current and fresh. Does it seem like they know the area you are interested in?  If they have a website, is it modern and up-to-date? Are they active on social media and post regularly? Do they offer relevant content that is helpful and coincides with your vision? A realtor who takes the time to continue learning about the growing market trends is someone you want on your side.

 

Be a Boss

Make a list of real estate questions that are important to you regarding your house hunt.  Ask them to explain the home buying process and add anything that you expect from your realtor (i.e. preferred method of communication, how often you would like updates).  Being honest about your expectations from the beginning will pave the way for a smooth buying experience. Meet your potential realtor for coffee or just give them a quick call. Do you feel that they are genuine in the advice and information they are offering you? Are they approachable and outgoing? Someone who is outgoing is most likely confident and confidence is definitely a characteristic you want when choosing a realtor. At the end of the day, go with your gut. And remember, they work for you.

Buying a first home is a significant milestone. Take your time when selecting who will help you make this major financial and emotional decision. Just don’t forget to have fun and enjoy this time, too! You’re only a first-time home buyer once!

If you need help finding the right realtor for you, call us.  Cardinal Financial AZ has worked closely with hundreds of realtors and will be able to recommend the right fit for you. Call 480-759-1500 or email matt.askland@cardinalfinancial.com to talk about your options!

Realtor Q&A: Karl Tunberg, Midland Real Estate Alliance

With more than 20 years of experience in the Arizona real estate market, Karl Tunberg has built a stellar reputation by serving his clients’ interests above all else – handling each transaction with knowledge, experience and integrity.

He’s got an extensive background in commercial real estate, new home sales/construction and residential brokerage, just to name a few areas of expertise. Karl is a Realtor partner of ours because he’s simply one of the best in the game; a true professional with sound instinct and real principle.

What is the most important thing for people – both Realtors and homebuyers – to know about the current Phoenix home market?

First, the Phoenix housing market is dynamic. With more than 25 municipalities and homes spread over 250 square miles, you can find just about anything you’re looking for – from low to high [prices].

While there are many location choices, the amount of available homes has shrunk significantly over the past couple of years as the robust Arizona economy continues to grow. Currently, there are 18,000 to 19,000 single-family detached homes on the market for a city housing more than 6 million people…with 100+ people moving into the area each day.

As an agent or new homebuyer, time is of the essence. The market is brisk; there is a lot of competition for good, available homes and they sell very fast. If you’re trying to find a home or find a client a home, you need to be diligent, aggressive and smart.

Diligent in following up and searching for the right home for you or your client. Aggressive in the offer (full list price or better, limited or no concessions requested of the seller and a short escrow period). Smart in your approach and handling of the negotiations, inspections, selection of the mortgage company/team, and all other aspects of your search and selection.

Purchasing a home, or representing a client for their purchase, is a huge responsibility and usually the largest investment that a person will ever make. Handling the process with intelligence is paramount.

What is the one question you get repeatedly from your first-time homebuyer clients and how do you address their concerns?

The question I always hear is, “How much is this home really going to cost me?” Most new homebuyers are scared about the “unknowns” in the homebuying process – loan fees, title fees, Realtor commissions, inspection fees, etc. The entire process has its own language and most people don’t have any idea what these terms mean.

Providing your clients with, or seeking out the information from, a professional mortgage or real estate person is a key step to doing your due diligence when getting involved in the home buying process. As a first-time or new-to-the-area buyer, you should always hire a professional for both your real estate search and your mortgage.

Having someone who represents your interests makes a huge difference in what you will pay for, the value you get, and the long-term investment potential. As a newer agent, joining a team, getting a mentor and working with great affiliate partners (mortgage, title, inspectors, warranty companies, etc.) will help you bridge the experience/knowledge gap quicker than all the classes you could go to for years. There is no substitute for being humble, hardworking and smart.

Where do you see the Phoenix market going this year, and how can Realtors and potential homebuyers best prepare for what’s to come?

The Phoenix market is very strong right now. Net migration, employment, affordability (in comparison to other U.S. markets) and quality of lifestyle are all drivers for the market. The lack of quality inventory, rising construction costs, lack of skilled labor and over-inflated land prices are all external pressures on the resale and new construction housing market in Phoenix.

To some extent, the market’s strength is also eroding itself by growing too quickly, a bad trap that is no stranger to veterans of the market. The best preparation and advice I can offer is to seek wisdom from the history of the market. That may seem like an obvious statement, but greed and rampant speculation can easily blur your vision.

I’m not recommending to stay out of the market, but just to be cautious, analyze the deal, be conservative in your expectations and keep in mind that this market can change quicker than you can cancel a deal.

Are you a Phoenix-area Realtor with an interesting perspective to share? We want to interview you! Tell us about yourself in the comments below and you could be featured in a future Realtor Q&A.

Hire A Realtor Or Buy Alone

Finding a Good Realtor

One may ask; what is the difference between a real estate agent and a realtor? A real estate agent is not a realtor.

A realtor is one who is authorized by the Realtors Association on a national level.

Who is a Realtor?

A realtor is an authorized person by the association.

As well as with authorization, realtors must also fulfill some other conditions like:

  • Ethical and moral behavior towards the client.
  • To maintain and carry on the standard of the whole association, as they represent their whole association towards the clients.
  • Obeys rules and regulations of the state in which they are serving.

For example, they must follow the property right rules, taxation policy etc.

  • A realtor is also caring towards the client rights. 

How to Hire a Good Realtor?

Since we’ve discussed who a realtor is, there is another question to answer. How do you hire a good realtor who meets all the criteria and has the right qualities?

A real estate agent is one which deals in house, property buying and selling. These agents are aware of properties in the area that are available for sale.

The realtor will be informed of everything you need to know about the property. The first step to finding a good realtor is to contact one. Doing an interview will help you find the realtor you are looking for.

The purpose of interview should be to check all the qualities of the realtor. Is this realtor the right fit for your home buying process? Do they have the qualities you are looking for in a realtor?

The realtor must have qualities like ethical behavior, moral aspects, working capabilities, ideas, and motivation toward the work. Another important factor to consider is the realtor’s experience. Do they have positive feedback from previous clients?

Also ask how many properties/houses were closed by them. This will be a key step in learning the expertise of the realtor. If the realtor has never made a deal, you may want to keep searching for a more qualified realtor.

Check out the license of the realtor, as well as their track record. The track record highlights the ethical measures of the realtor.

A simple way to review everything before signing or hiring a realtor is checking these things:

  • License of the concerned Realtor Association.
  • Previous deals and hiring (portfolio).
  • Working hours, capabilities, skills, motivations, ideas and loyalty.
  • Ethical exams certifications.

Interviewing a Good Realtor

After confirming the realtor is legitimate and ethical, it would be helpful to list the qualities and downsides of the realtor.

This will be helpful in making a final decision. If the realtor meets your demands and requirements for the work, then you should schedule a meeting. Make a contract with the realtor concerning your policies and then hire them for your house search.

Contracts are an important step in the agreement between you and the realtor. The contract will protect you from any violation of rules or regulation on the realtor’s part. It will also allow you to void the deal if your needs are not met according to the contract.

After these steps, tell your realtor about the requirements of the property you wish to purchase. The things which are important to a buyer can be:

  1. of bed rooms.
  2. Kitchen, washrooms, TV lounge, car parking etc.
  3. Location of the house.
  4. Most importantly, the range of your budget.

Giving your realtor certain housing requirements will allow them to find the perfect home for you. 

Do’s and Don’ts in Negotiations when Buying a House

You have visited dozens of open houses and met with builders and sellers. You’ve looked for the ideal neighborhood and searched for the best available offers. Now, you have finally found the property you are willing to pay for.

Or maybe you were lucky: it was a love at first sight, and now you are eager to close the deal as soon as possible. It could even be a colleague’s recommendation on a house for sale, or a drive after a family lunch.

In any case, welcome to the most valuable and challenging process of the home buying – price negotiations.

First of all, start with your financial status estimation and available options of financing.

If you are a first-time home buyer, there will be federal programs and state loans to help you with down payment and mortgage interest rates.

Usually, you know how much money you wish to spend. Considering all of the opportunities will give you flexibility during the negotiation process.

How to Make your First Offer the Best Offer

Making your first offer is an important step which needs a significant amount of preparation and analysis.

A lot of components should be considered when submitting the proposal to the seller.

One of those components is a comparative market analysis, which is a mathematical model to find out the value of your future home. It calculates the basic conditions, such as number of bedrooms, bathrooms, existence of the yard, or swimming pool. Then it compares your potential home to similar houses on the market in your area.

This model will give you an idea of the average basic cost, which will be fundamental for your offer.

After the approximation, you add or remove the components that increase or decrease the value respectively.

For example, you know that the current owners have recently changed all the plumbing in the house. Or the opposite, their plumbing is fifteen years old and will probably start breaking down soon.

Then research the market trends: is the market going up or down? Do people buy or sell more? Are there any houses being built that will soon be on sale?

All of those calculations and forecasts may take quite a lot of time, but they will leave you with several options to consider and choose from.

For these cases, the real estate agent’s services will be very helpful. Besides, he is a professional. It will not take as much time for him to evaluate all the pros and cons and come to you with a proposal.

Your real estate agent must assist in this process and normally helps to decide on a few things. He will help you figure out how much money you should offer, and which factors may or may not be in your favor.

After you agree on a price, the agent will send the proposal to the seller or seller’s agent. The seller’s agent will either accept it, or present you a counter-offer. Then, negotiations will go back and forth until you settle and reach an agreement.

After that, the home buying will move into the escrow.

Remember that all the agreements must be in writing, as your accepted offer will become a part of the purchase agreement.

Negotiating the Price: Which Tactics to Choose

The goal of your negotiation is to buy a house for the amount of money you are willing to pay.

Think of the highest maximum bid that you can afford and do not ever offer more. It is also good to research why the owners are selling the house. Do they want to sell it because they are moving for a new job? Has the property price been reduced due to an extensive time on the market?

In both cases it is likely they will want to sell quickly. You can stand your ground if they have a counter-offer.

If the house has been listed several times with a stable price, it is a sign the home owners are taking their time and may be waiting for the highest offer.

Depending on what kind of market you are in, strategy and tactics will vary. If your awaited house is in an area where there is more property for sale that is offered to buy – you are in a buyer’s market; if the situation is the opposite – then it is a seller’s market.

In a buyer’s market you have more possibilities to succeed. You can make a less than reasonable offer, demand for some house improvements, better closing date and even closing fee payment by the owner.

In a seller’s market you have less leverage, as you are not the only one in line.

You are most likely to succeed by offering a seller’s price. If he does not get it from you, he will receive another offer very soon.

It is vital to understand that both the buyer and the seller may forget the final goal: to buy and to sell. Sometimes the parties get carried away in a battle of negotiating.

Lock your eyes on the ball, but at the same time be realistic in your expectations of the situation. The following tactics will hopefully help you to stay focused.

#1. Use the Middleman

Your real estate agent can be your middleman to negotiate with your seller’s representative.

Using him as a buffer will save you time. He may also provide useful information concerning the sellers, their intentions, etc., which the other party will not disclose to you directly.

#2. Play Good Cop and Bad Cop

 Like in all the movies, one of the buyers plays a person that is on the seller’s side, another one – a displeased party.

In this way you will be not estranged from the seller. This will let him know that you are working on the compromise and are aware of his best interests.

#3. Wait for the Big Boss

Current tactics are somewhat similar to the previous one. Some third party (attorney, parents, professional friend of the family) need to see and evaluate the offer and give his or her expertise.

This is a chance to lower the seller’s counter-offer and keep your positions. In addition, you will make the seller wait. This may make the seller believe you are considering other options.

#4. Be Curious

Asking questions may reveal some valuable information from the seller. It might help to find the reasoning behind the house sale. This could be your priceless leverage, if you do not know it yet.

#5. Consider Compromise

 If it seems you might lose the whole deal at one point or another, be ready to give away something during the negotiation.

Compromise means you agreed in the end, but both of you left with a feeling that you met halfway.

#6. Focus on the Ball

Remember your main goal: to get the house.

Sometimes you will get stuck negotiating on minor details. It can be a good decision to wait until you come to an agreement on the main points, before proceeding.

How to Avoid Mistakes during the Negotiation

Whether you are buying a house for the first time, or just got carried away in the negotiation intensity, no one is protected against making mistakes.

#1. Be Nice

No one likes rude people.

Try not to offend your future seller during a house visit. For example, discussing all the necessary renovations and poor taste of the current owners may hurt their feelings. This may cause them to not want to sell their beloved house to you personally.

#2. Be Calm

Never express too much of an interest!

Most of the specialists agree that when sellers see how much you want this house to become yours, they won’t accept your first offer. To avoid a counter offer, you should always play it cool, no matter how perfect this property is for you.

#3. Think like a Seller

Take a different look at this situation – imagine you have to sell this house in two, five or ten years.

Will it be possible, or does it lack some basic features that the housing markets consider essential?

#4. Get Help

Spending money on real estate agents and attorneys may cost you thousands. Be cautious with cheap services if they are significantly lower than the average market price in your area. This is an indication of their lack of the professionalism and may cause you significant losses in the future. Pick your team carefully.

Do not rely solely on yourself, especially if this is your first time going through the house buying process.

There is plenty of information online to help you with your housing research. There is also a lot of information you need to collect before closing the deal to analyze what is best for you.

#5. Do Not Expect the Price Get Lower After Inspections

Bid lower than you can pay, and make your final offer with the most comfortable price you can afford.

Repairs after the inspections will, most likely, not cost the seller millions. Try not to be discouraged by this account.

Consider any future issues as a possible subject of renegotiating at some point. But, you should still be ready to go through with what you have already signed up for.

#6. Sign Cautiously

Make sure you acknowledge all terms and realize all liabilities before you sign any documents.

Once you sign the contract there is no way to make amendments without renegotiating and signing a new one. This may fail to happen at all.

#7. Calculate all Future Costs

Budgeting is essential during the purchase. The amount you pay will not only be the price of the house.

You will have to make payments to the agent and attorney. In addition, there are escrow payments, deposit and down payments. There is also the title search and insurance, among other things.

You definitely need to estimate your abilities and decide for yourself if you can manage it.

What if there are Multiple Offers?

In a seller’s market, you will probably have competition for the house you wish to buy.

Sellers might be considering several offers at the same time. They will make their decision based on the best offer. They may also choose to play with one potential buyer and only send counter-offers to them.

You as a buyer will never know. There are main points on how to stand out from multiple other offers. The best way to protect yourself from failing is to make your offer better than the others.

Usually, your real estate agent will be able to tell if there is a chance for the multiple offers. This will help you plan and act accordingly.

Receiving a pre-approval for the mortgage will be a good start to becoming the best potential seller’s choice. This is a statement issued based on your credit report, bank statements, etc. It shows your ability to pay for your possible purchase.

Also, let the seller know the financial options that you have. Some mortgage conditions and funding programs are more attractive and may influence the seller’s decision.

Bid close to his price — there is not much sense in offering significantly less than he wants in a selling market.

Doing this you will save you time on the continuous counter-offering process.

It would be helpful to review the contingencies list. The fewer clauses you have there, the more attractive your offer seems to the seller.

However, it is recommended not to remove home inspection. This means the seller will not be liable for any uncovered issues with the house, and you will have to pay for the repairs on your own.

Showing your intentions by making a large, good faith deposit and down payment will usually convince the owner of your commitment. This may finally tilt the balance towards your proposal.

Negotiating the price is a very stressful period in a house buying process. You are not sure what the results will be, or exactly how much money you will spend. In any case, keep in mind that the owner is interested in selling his home, and you are willing to buy it. With a little time and effort, you will be able to do it!

The Guide Of Real Estate Agents For Home Buyers

It’s extremely important to know the ins and outs of real estate agents before you bring one along with you to help in your search for a home, just so you may know what to expect, and what will be expected of you.

Who a Real Estate Agent Is

You probably already know who a real estate agent is, but do you know exactly what they do?

In short, a real estate agent is someone who is licensed to list and sell real estate, implying homes, properties, etc. A Realtor, however, is somewhat different.

A realtor is a member of the National Association of Realtors. Therefore, while a Realtor is always a real estate agent, a real estate agent isn’t always a Realtor.

How to Choose the Best Real Estate Agent for Your Needs

You may feel the urge to pick the first real estate agent who strikes you, but that’s something one should never do.

The “Wow Factor” will simply wear off within a few minutes, even seconds. So when it comes to getting down to business, you need to know how to pick the best real estate agent for your needs.

Look for Proper Credentials

Would you trust a doctor who does not have credentials, or one that hides them?

Probably not. So, why trust a real estate agent who does not present theirs, or doesn’t have them at all?

It’s easy to find real estate agents who can get the job done, but finding agents with special credentials, those who have gone that extra step to take additional classes in certain specialties of real estate sales, is hard.

Here are just a few credentials within real estate that you should be on the lookout for:

  • Accredited Buyer’s Representative, or ABR – Completed additional education during representation of a buyer in his/her transactions.
  • Certified Residential Specialist, or CRS – Completed additional training during the handling of residential real estate, such as houses and apartments.
  • Seniors Real Estate Specialist, or SRES – Completed training during the purpose of helping sellers and buyers who are 50-years or more.

Similarly, if you stumble upon a real estate agent who is also a member of the NAR, the National Association of Realtors, it will be a bonus. However, make sure that they have at least one or two credentials that are relevant to your need(s).

Research their Licensing

Would you go to a doctor who does not have a proper medical training?

No, you would not. So, why go to an agent who does not have a proper licensing?

Your state will have a license board for all active real estate agents and realtors, which you can easily access.

You will also be able to see their information, disciplinary actions, complaints, or any other information that you will need to help influence your decision, especially since most of the information is posted online.

Try and Track Down Some of their Recent Clients

Ask the agent to give you a list of all the sales they have made in the past year, and a couple of phone numbers for references.

A good agent will do so, while a bad agent will give you excuses and essentially shoot the request down.

Ask the agent, before you call any of the numbers listed, whether or not the owners were pleased or disappointed with him/her. If the agent beats around the bush or does not give you a full answer, that tells you all you need to know.

Otherwise, call the numbers and inquire from them what the asking price as well as the final sales price were.

It would also be a good idea to ask their previous clients about the properties they sold, if you are a seller.

This way, you can figure out the closeness in similarities between the properties that the agent sold and yours.

After all, you will most definitely want an agent who specializes within the area of what you are selling.

Give Them the “What Else” Test

A good agent will know about all of the other properties that are for sale in the area. Also, a good agent always does his or her research regarding the events in the current market, and those that are out there for the taking.

In short, you want an agent who is an expert of the current market, and also someone who always stays on top of things.

Get Yourself a Winner

Real estate agents and realtors are typically given awards based on how they do their jobs.

For example, if you are thinking of selecting an agent who received the “Realtor of the Year” award through a local branch, or through the NAR, then you’ve made the right choice.

Typically, these awards are given to the realtor or real estate agent who has made the most sales and commissions during a particular year.

Therefore, you can trust how dedicated and serious they say they are because they have an award to prove it.

Research their Business Activity

Learning the type of market presence that a real estate agent has is the best way to figure them out.

Ideally, you’re going to want an agent who has been in the business for at least 5 years, specializes in one or two real estate markets , and one who understands a particular price range.

You can unearth this information by asking them, or by asking the state licensing authority if you’re not comfortable with asking the agent directly. Keep in mind that you’re better off with an agent who is engaged actively in one particular area and price range. For example, residential homes around the $100,000 range.

Check Out Their Current Listings

Once you know their area of specialization, check out the available current listings that they have.

Check out what they have on their own website as well as Realtor.com, which is a website that builds multiple properties for sale, known as the Multiple Listing Service, within an online database that you can search through.

The majority of buyers will start searching on the Internet. Therefore, if an agent does not have much of an online presence, or one period, then it’s best to move on.

Only the best agents will advertise themselves on multiple platforms, especially the Internet. You want an agent who will use every tool in the book to be successful.

The Basics of Buyers’ Agents and What They Do

If you’re buying a home and it’s your first time doing so, you’re going to need a buyer’s agent.

These real estate agents will work day and night, as long as you listen to the advice listed above and find the best one for you, to ensure that all of your needs and requirements are met when it comes to finding the right home for you.

What Buyer’s Agents Do for You

Your buyer’s agent will have a vast knowledge of the current real estate market for the area, which will include neighborhood amenities and conditions, the law, zoning issues, price trends, negotiations, taxes, financing, and insurance.

Once you meet with the buyer’s agent, he/she will generally help you to determine what your needs and wants are when it comes to finding you a home and a neighborhood.

The agent will aid you in learning about what you can afford, setting a budget, give you some insight on the current conditions of the market, and explain to you what you should expect while shopping for a home. In addition, he/she will help you find a suitable level of financing.

During the shopping-for-a-home period, you will probably meet with your agent for tours of homes that you might be interested in.

They will give your insight into the floor plans, the pertinent selling points of the home, and the overall crime rate of that particular neighborhood. They will also give you the rundown for cultural activities, work centers, shopping centers, and schools that are close by.

Your agent is responsible for ensuring that inspections of the homes are complete, as well as the disclosures therein.

They are also in charge of ensuring that coordination and completion is done through the roof inspector, attorneys, lenders, and all other professionals who are involved with the purchase of the home.

If bargains need to be made over the price, you will not have to negotiate a thing. Your buyer’s agent will do all of that for you along with signing the final closing documents.

They will be present whenever you need to go through and sign any document so as to ensure that you are safe.

Dual Agencies – The Basics

Dual agencies occur when a buyer is being represented by a brokerage firm that controls the listing. Once an agent represents both the seller and the buyer within the same transaction, the situation is known as dual agencies.

In multiple states, this is illegal because of the conflict of interest that can arise in regard to the broker.

All realtors hold the same responsibility, which is to inform their clients of all potential risks that may arise due to conflicts of interest. Legally, realtors are not allowed to work on both sides of any transaction without consent from the clients.

For example, if you are selling your home, and you do not want a realtor to be working with the buyer, it’s your right to say so in the listing agreement.

This is also true for the buyers; a buyer can get out of a buyer’s agency agreement, but only if their agent has a listing in which the buyer is interested in.

When it comes to dual agencies, there are actually quite a few pros for the seller, and they are as follows;

  • Trust has already been gained with your listing agent, so representation for the buyer has already been established.
  • Your agent brought you the buyer knowing that you are selling, even if your property has not yet hit the market.
  • Your listing agent will already have covered and researched your neighborhood’s market to gain buyer inquiries, which means that your agent will be working from all sides of the deal to sell your house faster and with more incentive.
  • Your agent works together with corporate relocation buyers who are in need of finding a house quickly, and they will ensure that it’s your house that is bought.

However, there are some cons when it comes to dual agencies, and they are listed below:

  • You cannot be advised by your agent as thoroughly as you’d probably like when he or she has to act as a dual agent, because of the fast that impartial facilitation is indeed required.
  • Your listing agent is not allowed to negotiate the best or highest price for you if you are also negotiating both best and lowest terms for the buyer.
  • Earning a full commission, if the opportunity arises, may tempt the agent to coerce a deal which you might not accept otherwise.
  • Your agent may inhibit all access to your listing through buyers with agents.

To avoid any surprises, or anything going wrong in general when going with dual agencies, always ensure that you properly represent and clarify your full relationship with your agent.

You can do this by using an exclusive buyer agency agreement, or a listing agreement. Even with dual agency, one cannot have too many surprises once everything is outlined there cannot be any surprises.

How Real Estate Agents Are Paid

In reference to the National Association of Realtors’ 2013 Profile of Home Buyers and Sellers, approximately 9% of homeowners opted to put their homes up for sale during 2012 without using a real estate agent or Realtor.

A handful of “For Sale by Owner” transactions dealt with sellers and buyers who previously knew each other, or were related directly. 88% of the buyers chose to work with a real estate agent or Realtor, on the buyer’s side.

Real estate agents and Realtors, unlike professionals in different categories who bill by hourly rates or at the end of the project, get paid through a transaction at the end of each sale.

For example, if an agent has worked with a seller or a buyer for months at a time, they do not get paid for the time spent if there will be no transaction during that period.

Realtors, based on the selling price of the home, receive a commission once the transaction goes through to settlement. This means that once all of the transactions prior to have been completed, the commission is then given.

The commission itself is negotiated, in most cases, between the client and the agent. Typically, an agent will earn a commission of 6% from the sale price, but some brokerages have discount commission discounts for the sellers that they work with.

Essentially, the listing agent and the buyer’s agent will split the commission, but that can bring forth some issues.

For example, sometimes the split may not be negotiated evenly. A seller could have agreed to pay a commission of 5.5% that if further divided, the buyer’s agent would receive 2.5% while the listing agent receives 3% of the commission.

Even though some realtors are associate brokers, or brokers in general, from positions requiring licensing and extra training, all commission payments are instructed to go through to the broker who is managing the brokerage where the realtor is working.

From there, the commission is then split to the agent and the broker according to the agreement that has been made.

The split will vary, sometimes newer agents will earn a small portion of the commission compared to the experienced or successful agents who generally sell more expensive properties or homes.

Paying the Commission Itself

Based on technicality, the overall commission is paid for at the settlement period by the seller. The fee is taken from the proceeds of the sale of the home or the property.

However, the buyers pay the commission because they are literally paying to purchase the house, while the sellers take the commission for the realtor into account during the process of determining the price for the listing.

From there, the commission is then divided during the settlement process between the buyer’s agent brokerage and the listing agent’s brokerage. Afterwards, the agents who are working the real estate sale are further paid by their brokers.

Knowing Real Estate

If you know all of the basics, and the technicalities with regard to real estate, you will have no trouble making the best decision on which real estate professional to hire, know what to expect, and how to go about transactions and deals-you will have the smoothest sale of your life.