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About Real
Estate Brokers
and Sales Agents
Significant Points
- Real estate brokers and sales agents often work evenings
and weekends and usually are on call to suit the needs of
clients.
- A license is required in every State and the District of
Columbia.
- Although gaining a job as a real estate agent or broker
may be relatively easy, beginning agents and brokers may face
competition from well-established, more experienced agents
and brokers in obtaining listings and in closing a sufficient
number of sales.
Nature of the Work
One of the most complex and important financial events in peoples’
lives is the purchase or sale of a home or investment property.
Because of this complexity and importance, people usually seek
the help of real estate brokers and sales agents when buying
or selling real estate.
Real estate brokers and sales agents have a thorough knowledge
of the real estate market in their community. They know which
neighborhoods will best fit clients’ needs and budgets. They
are familiar with local zoning and tax laws and know where to
obtain financing. Agents and brokers also act as intermediaries
in price negotiations between buyers and sellers.
Real estate agents usually are independent sales workers who
provide their services to a licensed real estate broker on a
contract basis. In return, the broker pays the agent a portion
of the commission earned from the agent’s sale of the property.
Brokers are independent businesspeople who sell real estate
owned by others; they also may rent or manage properties for
a fee. When selling real estate, brokers arrange for title searches
and for meetings between buyers and sellers wherein details
of the transactions are agreed upon and the new owners take
possession of the property.
A broker may help to arrange favorable home loan
financing from a mortgage loan lender for the prospective buyer; often, this
makes the difference between success and failure in closing
a sale. A Broker recommending the services of a professional
mortgage broker to find the best source of
mortgage loan funding for their home-buyer client can be very beneficial
to both the licensed Realtor® and the home-buying clients!
In some cases, real estate brokers and agents assume primary responsibility
for closing sales; in others, lawyers or lenders do so. Brokers
supervise agents who may have many of the same job duties. Brokers
also manage their own offices, advertise properties, and handle
other business matters. Some combine other types of work, such
as selling insurance or practicing law, with their real estate
business.
Besides making sales, agents and brokers must have properties
to sell. Consequently, they spend a significant amount of time
obtaining listings—agreements by owners to place properties
for sale with the firm. When listing a property for sale, agents
and brokers compare the listed property with similar properties
that recently sold, in order to determine a competitive market
price for the property. Once the property is sold, the agent
who sold it and the agent who obtained the listing both receive
a portion of the commission. Thus, agents who sell a property
that they themselves have listed can increase their commission.
Most real estate brokers and sales agents sell residential
property. A small number, usually employed in large or specialized
firms, sell commercial, industrial, agricultural, or other types
of real estate. Every specialty requires knowledge of that particular
type of property and clientele. Selling or leasing business
property requires an understanding of leasing practices, business
trends, and the location of the property. Agents who sell or
lease industrial properties must know about the region’s transportation,
utilities, and labor supply. Whatever the type of property,
the agent or broker must know how to meet the client’s particular
requirements.
Before showing residential properties to potential buyers,
agents meet with them to get a feeling for the type of home
the buyers would like. In this pre qualifying phase, the agent
determines how much the buyers can afford to spend. In addition,
the agent and the buyer usually sign a loyalty contract which
states the agent will be the only one to show houses to the
buyers. An agent or broker uses a computer to generate lists
of properties for sale, their location and description, and
available sources of financing. In some cases, agents and brokers
use computers to give buyers a virtual tour of properties in
which they are interested. With a computer, buyers can view
interior and exterior images or floor plans without leaving
the real estate office.
Agents may meet several times with prospective buyers to discuss
and visit available properties. Agents identify and emphasize
the most pertinent selling points. To a young family looking
for a house, they may emphasize the convenient floor plan, the
area’s low crime rate, and the proximity to schools and shopping
centers. To a potential investor, they may point out the tax
advantages of owning a rental property and the ease of finding
a renter. If bargaining over price becomes necessary, agents
must follow their client’s instructions carefully and may have
to present counteroffers in order to get the best possible price.
Once both parties have signed the contract, the real estate
broker or agent must make sure that all special terms of the
contract are met before the closing date. For example, the agent
must make sure that the mandated and agreed-upon inspections,
including that of the home and termite and radon inspections,
take place. Also, if the seller agrees to any repairs, the broker
or agent must see that they are made. Increasingly, brokers
and agents are handling environmental problems as well, by making
sure that the properties they sell meet environmental regulations.
For example, they may be responsible for dealing with lead paint
on the walls. While loan officers, attorneys, or other persons
handle many details, the agent must ensure that they are completed.
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