Realtor's True Value
Margaret and Tim were together six years before they got married. By together, we mean that they shared the label of boyfriend and girlfriend. Other than the first year of their relationship, when they both worked in Manhattan, the two actually spent very little time in the same country. Margaret's job as a sales consultant required her to travel all over the U.S. and Europe. Eventually, because of her extensive travel experience, her company deemed her the logical choice to help open a London branch and, later, a Singapore branch. Meanwhile, Tim's company moved him north of the border, to the French-Canadian city of Montreal. Somehow, the two made it work even across the oceans. After years of separation, the two finally both settled down in Newark, close to the city where there love had first blossomed, and decided to marry. However, as the wedding date loomed closer, the couple agreed that the last thing either of them felt like doing was more traveling. Rather, they decided to skip the honeymoon and do something special and permanent to commemorate their new commitment: purchase a home.
Tim and Margaret both agreed that they wanted a three-bedroom starter home with a backyard, and close to all amenities (including public schools, as they hoped to start populating their home in the very near future!). First, they had their credit ratings checked, got pre-approved for a mortgage, and sat down to list all the features they did and didn't want in their starter homes (all tips they'd picked up from reading our highly informative article, entitled 'Buying a Home.') Then, they approached a realtor with their list.
"Here we go," Margaret muttered to Tim as they walked into the office. "Let the headache begin."
The headache Margaret was referring to was the home hunting process, a process she was sure would be long and painful.
Margaret and Tim sat down with the realtor and explained their wishes. The realtor listened intently, took notes, nodded and mmm-hhmmed, then said, "Let's go for a drive." Within one hour, the realtor had shown the newlyweds not one but two homes that matched their wish list exactly!
The couple was stunned. They'd heard that finding the right home was a task analogous to finding a needle in a haystack; possible, but requiring a long, long time. And yet this realtor had already found them two incredible prospective homes, both of which would be perfect for them! How was this possible? Was this realtor some kind of magician?
Magician? No. But highly skilled at her profession? Yes.
You see, a truly good realtor won't hear you out, then go hunting for prospective homes for you. A truly good realtor will have already looked at available homes on the market. When the likes of you come along with your wish list, this realtor will pull out of his or her mental database of homes for sale a home he or she has checked out that fits the criteria you're describing.
Tim and Margaret's realtor was illustrating what the world of real estate deems the decisive factor of a realtor's true value: market knowledge.
Types Of Realtors
In all types of jobs, there exist two types of people: those who do the bare minimum of their jobs, and those who go that extra mile to really do a good job.
Real estate jobs work exactly the same way. In realtor terms, Type One encompasses those agents who sit at their desks, wait for a potential buyer to phone them, listen to the list of features the buyer is looking for in a home, then go on a mission to find homes that fit this list. Type Two encompasses those agents who don't need to go on this mission, because they've been keeping up with different homes in the market. So, when prospective buyers (like Tim and Margaret) approach them with requests for homes, Type Two realtors can already think of homes they've already seen that might tickle these buyers' fancy.
To use an analogy, imagine yourself in the dentist's chair. Your dentist examines your teeth, and notices something a tad off about one of your teeth. Would you rather your dentist tell you to come back in a few days, after he or she has had some time to review the old dental textbooks to find a condition that matches what appears in your mouth? Or would you rather that your dentist tell you right away what the problem is, because his or her existing database of dental knowledge is so extensive that he or she recognized the condition immediately?
If you're like most people, you'll want Dentist Number Two. Why? Because he or she has the knowledge and experience required to assist you right then and there. This dentist's prompt reaction inspires confidence in you. Similarly, you'll feel more confident with a realtor who has suggestions of homes ready for you the second you've told him or her your criteria.
Are all realtors Type Twos? Sadly, no. Do you have to limit yourself to Type Two realtors? Of course not. But it's definitely to your advantage. A Type Two realtor is at the front lines of the industry at all times. Type Two realtors continuously view new properties as they appear on the market. Type Twos arrive at For-Sale properties much faster than their Type One counterparts. Why? Because Type Two realtors don't wait for a client to come to them. They go out there and check out the properties on their own, so when a client does come to them, they have all the information the client needs ready.
Type Twos can save you time. The more homes a realtor sees, the more homes he can recommend to clients. The more homes the client sees, the more likely he or she is to find a home he or she likes. Even if the client discards the agen'ts first few suggestions, both parties still profit because the client is vigorously sourcing out the property market. By going through this practice, the client is determining what he or she wants or doesn't want in a home, making it simpler for the realtor to recommend other properties for viewing.
So, how does one become a Type Two realtor? Basically, all the realtor has to do is keep up to date on what's for sale in his or her area. This can be done by checking out new properties:
on the Multiple Listing Service in home-sale magazines with For-Sale signs in the front lawn at Open Houses being advertised by listing agents
All it takes is a little research. Once the realtor learns about a new home, he or she should get information on it and, hopefully, has a look at it.
Basically, then, the key factor determining a realtor's true value is knowledge. And that's one of the reasons you're using a realtor in the first place.
So far, we've been discussing market knowledge. By market knowledge, we mean that the realtor can give you information on kinds of features about the homes he or she has seen: for example, number of bedrooms, size of the kitchen, state of a basement. He or she can also give you info on the price range, the sort of neighborhood, and hopefully some other facts useful to you. What he or she doesn't know off the bat, he or she should be willing to read up on and get back to you.
Realtor Advantages
There are, however, other advantages a realtor can bring to you, such as:
Knowledge of the length of time on the market. A realtor who is keeping track of properties for sale will be able to tell you how long a property has been on the market. Length of time on the market can affect the asking price of the home. Sellers whose property has been on the market for a while are sometimes willing to negotiate the sale price in the hopes of getting a sale. Your realtor can give you leads on homes in this situation.
Knowledge of the buying and selling process. Once your realtor has found you a home, he or she will lead you through the buying process. This includes helping you come up with a reasonable offer all the way to closing the deal.
You might think Tim and Margaret stumbled upon the four-leaf clover version of a realtor. Not true. Plenty of realtors out there are Type Twos. However, you might have to hunt for them a bit. Before you commit to a realtor interview a few to check out their market knowledge. Don't be shy about asking them if they know of any homes that might meet your needs. Test them to see if they really know their industry. After all, your home is in all probability the largest purchase you will ever make. Why hand the job over to anyone other than the best?
One final note: you probably came to this website under the impression that, in order to buy a home, you needed to enlist the help of a real estate agent. Now, suddenly, here we are, telling you to find someone called a realtor. What gives?
The term realtor applies to a real estate professional who is a member of an international organization called the National Association of REALTORS®, or NAR. This organization includes many real estate agents, but also includes other real estate professionals such as:
counselors appraisers loan officers property managers escrow officers brokers title representatives salespeople (for example, homeowners insurance salesperson)
Not all real estate agents are realtors, but those that do subscribe to a strict REALTOR® Code of Ethics. (So too do all NAR members, regardless of what their role in the real estate industry is.) Anyone who seeks the services of a REALTOR® can anticipate a high standard of honesty and professionalism.
