Real Estate Titles Explained: Agent, Broker, REALTOR®

homeowner

If you’re entering the real estate market for the first time, you may find real estate professionals’ various titles a little confusing. Sometimes consumers use these titles interchangeably, but there are some important differences between the roles of the various professionals, as well as different requirements for using particular titles.

Titles for Real Estate Professionals

The real estate profession is regulated by state governments, which have different requirements for earning a license. In general, though, the titles you may come across include:

  • Real estate agent: Anyone who earns a real estate license can be called a real estate agent, whether that license is as a sales professional, an associate broker or a broker. State requirements vary, but in all states you must take a minimum number of classes and pass a test to earn your license.
  • REALTOR®: A real estate agent who is a member of the National Association of REALTORS®, which means that he or she must uphold the standards of the association and its code of ethics.
  • Real estate broker: A person who has taken education beyond the agent level as required by state laws and has passed a broker’s license exam. Brokers can work alone or they can hire agents to work for them.
  • Real estate salesperson: Another name for a real estate agent.
  • Real estate associate broker: Someone who has taken additional education classes and earned a broker’s license but chooses to work under the management of a broker.

Working With a Real Estate Professional

While you are more likely to work directly with a real estate salesperson or an associate broker, some brokers provide services for buyers and sellers themselves. If you have hired a real estate agent to help you buy or sell a home, that agent typically reports to a broker. The broker handles the earnest money deposit and establishes the escrow account.

In addition, the broker bears responsibility for the actions of the real estate agents under his or her supervision. While the majority of real estate transactions go through without any glitches, a broker will step in if there are any problems with your home purchase or sale.

If you are unhappy with your real estate agent and cannot resolve the issues directly, your next step should be to talk with the broker to ask for help and perhaps another agent for you to consult.

Experience and Education

Real estate brokers not only have higher education requirements than real estate salespersons, they also must have experience working as an agent. For example, in Virginia the license requirements are as follows:

  • A salesperson must take 60 hours of classes and pass an exam with both state and national sections.
  • A broker must take 180 hours of broker-specific classes, pass an exam with both state and national sections, and have actively worked as a real estate salesperson for 36 of the previous 48 months.

When you are looking for a real estate professional, it is wise to work with a member of the National Association of REALTORS® who is committed to maintaining the professionalism of the real estate business. You can choose to work with a salesperson or a broker, but in any case you should take the time to interview your agent and ask for references.

If you want to work with someone new to the profession, you may want to ask to meet the broker as well so you can feel comfortable that someone with experience will be representing your interests.

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Alabama residential sales in August up 10 percent; Majority of markets saw increase over last year

alabama real estate market news

By: Alabama Center for Real Estate (ACRE)

Sales: Alabama residential sales totaling 4,594 units in August reflect an increase of 9.6 percent growth from the same period a year earlier. Sales for the month continue to trend upward for the state, which bottomed out at 3,000 sales in August 2010, but has improved each year since. Sales are 21.5 percent above the August five-year sales average (’10-’14) of 3,781 units. Year-to-date sales through August are up 13.8 percent from 2014.

Forecast: August sales were 1.9 percent or 89 units above our monthly forecast. ACRE’s year-to-date sales forecast through August projected 28,071 closed transactions while the actual sales were 34,467 units, a 22.7 percent cumulative variance.

Alabama home inventory down 1 percent vs August 2014. August inventory down 21 percent from 2008 monthly peak. Infograph courtesy of ACRE. All rights reserved.

Supply: The statewide housing inventory in August was 33,203 units, a decrease of 1 percent from August 2014 and 21.2 percent below the month of August peak in 2007 (42,150 units). There was 7.2 months of housing supply in August (6.0+/- months NSA considered equilibrium), which represents a favorable drop of 9.7 percent from August 2014 (8 months). August inventory also decreased from July by 2 percent. This direction contrast with historical data that indicates August inventory on average (’10-’14) increases from the month of July by .4 percent.

Demand: July residential sales decreased 13.2 percent from the prior month. This direction contrasts with historical statewide data indicating that August sales on average (’10-’14) increase from the month of July by .4 percent. The average Days on Market (DOM) until a listing sold was 149 days, 8.2 percent faster than last year. Nationally, August sales were 6.2 percent above the same period last year (SA).

In August across Alabama, 76 percent (was 84 percent in July) of local markets report positive sales growth compared to last August. Sales during the month were 53.1 percent above the month of August bottom experienced in 2010 but remains 18.7 percent off the August 2005 peak.

Pricing: The August median sales price increased .4 percent from the same period last year. In August, 12 of 25 or 48 percent of local markets experienced price gains from August 2014. Keep in mind that this indicator can fluctuate from month-to-month due to sampling size of data and seasonal buying patterns. The August median sales price increased 2 percent from the prior month. This direction contrasts with historical data averages (’10-’14) reflecting that the August median sales price increases 5 percent from the month of July.

Alabama’s months of housing supply continues to trend is the right direction – down 9.7 percent from August 2014 and 47.9 percent from 2010 peak. Infograph courtesy of ACRE. All rights reserved.

Seeking Balance: The metro markets in Alabama representing 70 percent of all sales continued to trend toward greater seller bargaining power with 6.5 months of supply. Outside of the metro markets, Alabama’s mid-sized markets are reporting 7.7 months of supply, while rural areas are still reporting 10 months of supply. With that said, there has being significant improvements from inventory peaks experienced during the recession. The supply of “quality” inventory in the past has impacted sales according to some local professionals with boots on the ground.

National Industry Perspective: “Home sales have trended up and inventories are lean, supporting strong home price appreciation. That price growth, driven by laggard supply response, helps build equity for existing owners but is a headwind for first-time buyers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.”Given significant uncertainties from Greece and China, continued global monetary easing, and an expected slow pace of monetary tightening by the Fed, we anticipate mortgage rates to rise only gradually through next year, which should continue to help support mortgage demand.”

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6 Keys to Writing Winning Offers in a Sellers’ Market

writing winning offers

By: Anne Miller for Realtor.com

In a sellers’ market, competition can turn fierce. Standing out becomes a challenge.

In these tight markets, smart strategies can make a big difference. Money helps, of course, but so does some creative and heartfelt communication—and having the right professional in your corner.

Follow these six tips, and you’re going to find success is just around the corner … along with your new house.

1. A good agent

An assertive, experienced REALTOR® will know the market well and will move quickly to present an offer to the seller.

They’ll be able to guide you through options that may seem a little crazy in a slower market—but could prove the difference between success and more house-hunting in a tight one.

2. An earnest deposit

A substantial deposit makes a big difference.

A reasonable deposit will be about 3% of the value of the property. A seller usually takes such an offer seriously and will feel confident you are committed to stand by this offer.

This could give your offer a winning edge. Submitting a pre-approval letter with the deposit puts your bid ahead of the others by showing the seller you have serious intentions.

3. Money talks

Of course, the more cash you can offer up-front can make a difference. too.

If you can afford a 30% or 40% down payment (or more), that may tempt sellers. And, in the long run, it will save you money on a mortgage, shortening the length of your loan and the interest you pay.

Few homeowners are likely to dismiss an all-cash sale. But let’s be honest—that’s a lot of dough that most people don’t have access to.

4. Get personal

Appeal to the seller’s emotions: include a personal letter in the offer to the person selling the property.

Explain why you want to buy the house and what you particularly like about it. Be as specific as possible. Appeal to what you may know of the property history.

Perhaps it’s a historic house the sellers lovingly restored, and you plan to keep it that way—tell them. Maybe you’re looking forward to raising your children in the specific community.

Other offers will appear impersonal in comparison.

5. Speed things up

Offer to close quickly. Most sellers want to make a speedy transaction—they’ll like this.

A standard closing period is about 30 days. If you can close in three weeks instead, this could convince the seller to accept your bid—even over one that offers more money.

Another winning negotiation strategy is to waive some of the contingencies usually included in a standard contract. For example, a winning offer can be one which agrees to shorten the period the buyer has to inspect a property for lead paint contamination.

Before you agree to waive any contingencies, however, you should check with your attorney.

6. Be nice

The sellers want a few more days in the house. Consider giving that to them rent-free.

There’s a few things ideally you’d like them to fix—but if they aren’t deal-breakers, consider letting that go.

Be friendly and personable, because if you prove to be someone they don’t mind dealing with, that could tip things in your favor, too.

Confirm Your Commitment

Ultimately, the question is this: how much do you want a new home?

In a sellers’ market, you’re probably going to have to give more, in many ways.

But hopefully your perseverance will pay off—for your family, and your bank account.

Updated from an earlier version by Wendy Dickstein.

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5 Best Ways to Research Your Property History

research property

By: Anne Miller for Realtor.com

Property history research gives you a picture of how the history of your property developed through the years. The history may purely serve to staunch your curiosity.

But you may also learn why some things were built as they were and—potentially—learn more information to help you fix or update your home.

If you’re embarking on a remodel, for example, you’ll need to understand the genesis of your home, how it was built and possibly added on to, and what might lie behind the walls or under the carpeting.

Plus, sometimes it’s just fun to know the provenance of your abode.

Property History Research Methods

Ask your inspector: If you’re buying an older home, check with the expert you’re paying to look at all the nooks and crannies—and about the history of those nooks and crannies. For example, an inspector might note a beautiful hardwood floor beneath modern carpeting or know where to look for a historic foundation stone in the basement.

Talk to your neighbors: Maybe also talk to the previous owner and others who used to live in the area—and their relatives. Many will be happy to share memories. Once land records are accessed, your property history search will yield valuable historical information about the house and its original owners, including when it was sold and to whom.

Visit the library: Old newspapers or local history publications may offer insight into events at your address or give you a sense of the neighborhood and town at the time the home was built. Try to go during a slower time of day—not, say, a raining weekend afternoon—and a librarian may have more time to assist you with this research.

Check the deed: You need to know the legal description of the property, the official address and the subdivision lot number. The legal description also includes the section number, portion of the section, township and range of the property.

Deed transactions are also recorded at local county courthouses in the Register of Deeds. These records may be on microfilm, computerized records or other physical publications. Most staff who work with deeds can help you find what you’re looking for off the address.

When you start your search, begin with the most recent deed transactions and work backward to earlier records.

Scour Porch.com: The online clearance center for home projects, design ideas and contractors also encourages owners and others to note a home’s history. You can check out past work permits, local stats, and who’s done what work on the house.

Other resources: The patent records of the Bureau of Land Management’s General Land office will show you when the federal government first sold the land parcel to a private owner and who that owner was.

You can find other documents online or in local archives or libraries. They include census data records, marriage and death records and insurance maps which show how a property changed over time.

There are commercial sites to help you locate and search online databases to get this information. Genealogical research databases can also give you valuable information to help you uncover your property history.

Happy digging!

Updated from an earlier version by Wendy Dickstein.

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What is Dual Agency?

dual agency in real estate

By: Chrystal Caruthers for Realtor.com

When a buyer is represented by the same brokerage firm that has the listing, it is called dual agency. When one agent represents both the buyer and the seller in one transaction, it is also called dual agency.

In many states, dual agency is illegal: it can be a conflict of interest that best serves the broker.

REALTORS® have a responsibility to inform clients of potential conflicts of interest. REALTORS® cannot legally work both sides of a transaction without informed consent.

If you are selling your house and you don’t want your REALTOR® also working with the buyer, you have a right to specify that in the listing agreement. The same is true for buyers: a buyer can opt out of a buyer agency agreement if their buyer agent also has a listing the buyer is interested in purchasing.

There are pros and cons to dual agency. Every client has a different tolerance level and different expectations. Here are some ways in which dual agency could work.

Dual Agency Pros for the Seller

  • You already know and trust your listing agent—so you know if he also represents the buyer, your transaction will be handled efficiently.
  • Your listing agent has cornered the market in your neighborhood and therefore gets lots of buyer inquiries. Having your agent work both sides of the deal gives added incentive to sell your house quickly.
  • Your agent brought the buyer to you knowing you’ve been thinking about selling your house—but it’s not on the market yet.
  • Your agent is working with a corporate relocation buyer who needs to find a house quickly—and your house fits the bill.

Dual Agency Cons for the Seller

  • Your agent cannot advise you as thoroughly when acting as a dual agent. Impartial facilitation is required.
  • The opportunity to earn the full commission might tempt an agent to coerce a deal you would not otherwise accept.
  • Your listing agent cannot negotiate the highest and best price for you if also negotiating the lowest and best terms for the buyer.
  • Your agent might inhibit access to your listing by other agents with buyers.

Remember, every real estate transaction is different. The best way to ensure you are properly represented is to clarify your relationship with your agent either through a listing agreement or an exclusive buyer agency agreement.

Once everyone’s roles are outlined, there is little room for surprises—even with dual agency.

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