I am still amazed after all the years as an investor, the unbelievable amount of people out there, who still to this day, really do not have a clue of what a Realtor actually does and what value they bring to the party. Read on and hopefully you may learn some things you thought you already knew and if you already know this stuff, good for you. You are well ahead of most people.
I trust many folks will never actually admit their ignorance on this topic but maybe it is just me who runs into countless investors every month who could be much more effective in their business if they actually knew the facts about how Real Estate agents work. Now before I go on let me say I am a licensed Real Estate Broker, and have been for many years. I am licensed but I do not work with buyers or sellers as an agent. I actually use the services of Real Estate agents when I buy or sell my properties. I am not coming from a biased position because even though I could use my license to “save the commission” I rarely do if ever.
First and foremost a very basic principle is the following
1. When Is a Real Estate Agent a REALTOR®?
Briefly as possible, a real estate agent is a REALTOR® when he or she becomes a member of the NATIONAL ASSOCIATION OF REALTORS®, the world’s largest professional association. 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 abides by its strict Code of Ethics. For the purpose of this article I will use the term Realtor to describe a Real Estate Professional.
2. A Realtor Does not make a Dime Until a Deal Actually Closes. Realtors work every day with buyers, sellers, investors etc. They present offers, consult with homeowners, list property for sale and provide many other services too numerous to mention here. They market properties at their own expense at zero cost to sellers, and pay all their own expenses for transportation cell phones, insurance, and advertising again with no out of pocket expenses to the sellers. Only when the property actually sells and closes do they earn their commission. If for any reason the deal falls apart even at the very end, The Realtor will not collect any money whatsoever. Many times Realtors must wait many months to be paid on a deal only yo see it fall apart at the end and left with nothing.
3. Realtors Get a Fat Check once the Deal Closes and they pretty much do nothing. – Big Myth! Yes sometimes there is a substantial check at closing, but what most people do not realize is that check is split and divided with others many times before the Realtor actually receives his or her share. As far as doing nothing, once a property finally does go into escrow most Realtors are behind the scenes helping to facilitate the deal. It is far from an automatic process as there are so many pitfalls along the way and although you may not hear or see all the progress rest assured it is happening.
Realtors are a very important part of our team as investors and furthermore they can help leverage your time and effort. You may think you are saving money by not using their services; there are countless studies and data that dictate otherwise. Now as in any profession there are many Realtors whom are hard working and effective and some who are, let’s just say not as effective. So once you find a great agent as part of your team you will truly see the value they provide on a daily basis.