Real estate agents who are members of the National Association of Realtors (NAR) must adhere to a strict code of ethics. They also have access to exclusive listing services, local market data and resources, and specialized training. For professional help, contact Your Home Tampa Bay.
In exchange for their time and expertise, they charge a fee that’s typically based on the value of the property being sold or bought. This is known as realtor commission.
While some people use the terms Realtor and real estate agent interchangeably, there is a difference. Real estate agents and brokers can help clients buy and sell properties, but only Realtors are members of the National Association of Realtors (NAR). Realtors must adhere to a strict code of ethics and are bound by state and federal real estate laws. They are also required to take continuing education courses.
In addition to helping clients buy and sell homes, a Realtor may help investors find rental properties or commercial property. They may also assist homeowners with home loan modification programs and short sales. They often need to be familiar with local mortgage lenders and home inspectors.
Realtors spend a lot of time marketing properties, taking photos and creating online listings. They also meet with clients to discuss their real estate goals, tour properties and answer questions. For sellers, a Realtor can help them determine a fair market price for their home by analyzing comparable sales in the area. They can also recommend home staging techniques to make a property more appealing to buyers.
Most Realtors start their careers as sales agents in a real estate brokerage. This gives them an opportunity to learn industry terms, practice working with clients and get to know the local housing market. Some Realtors choose to become principal/designated brokers, which means they supervise other real estate agents and are responsible for complying with all state and federal real estate laws.
Many homebuyers rely on a Realtor to find available properties in the desired location. This can save them a lot of time because Realtors have access to information about new homes that aren’t yet listed on the Multiple Listing Service. They also have knowledge about local amenities like schools, utility costs and proposed zoning changes that could impact a buyer’s decision to purchase.
When a client has found the right property, a Realtor will prepare and review documents like contracts and deeds. They can also negotiate with clients and other professionals involved in a real estate transaction, including mortgage brokers, lenders, inspectors and closing agents. In the end, it’s very rewarding for Realtors to see their clients happily walk through the front door of their new home.
How Much Do Realtors Make?
Real estate agents aren’t paid by the hour, but their earnings depend on the number of homes they sell and the sales price of those houses. As a result, it can take some time for new real estate agents to build a client base and earn a living wage. The first year is often the most challenging as they build their experience and reputation.
Real estate commissions are typically based on 5-6% of the sale price of a home. That’s split two ways: between the listing agent and the buyer’s agent, as well as between the agent and their sponsoring broker. Some brokerages offer lower rates than others, but most Realtors don’t accept a reduced rate.
Some home sellers are willing to forego a Realtor’s commission in order to save money, but many believe that hiring one will ensure they get the best possible price for their home. And although many people complain that real estate commissions are too high, the amount of work and knowledge that a Realtor provides makes it worth the fee to most sellers.
The longevity of a Realtor also impacts their earnings, as those who have been in the business longer are likely to have established a wider network and be able to bring in more clients. In addition, there are a variety of other expenses that can eat into an agent’s earnings, including federal, state, and self-employment taxes; insurance premiums; and fees for the Multiple Listing Service (MLS).
Despite these costs, the average salary for a real estate agent is $54,300 per year according to the U.S. Bureau of Labor Statistics. This can rise to more than $72,000 if you deal in upscale properties that cost over $1 million. If you’re a Realtor working in a hot market like New York City, you can make even more than that.
What Are the Closing Costs of Buying or Selling a Home?
Closing costs are the fees involved in transferring ownership of a property. They can include real estate agent fees, mortgage points, escrow, title insurance and recording charges. In general, closing costs add up to about 2% to 5% of the home’s total purchase price. They are higher in lower-priced homes, and they can also be influenced by local market conditions. For example, closing costs in Texas are on the higher side compared to other states.
Buyers typically pay most closing costs, which include the cost of an appraisal to determine a home’s value, a fee for a home inspection, lender-required credit reports and an escrow deposit to hold money for property taxes, homeowners insurance and mortgage points. These fees are generally paid out of pocket and may be offset by seller credits or financing incentives, which can make a home more affordable.
Sellers must usually pay closing costs as well, though these expenses are often offset by a negotiated sales price and by the fact that they have already spent money getting their house ready to sell. They may have painted or repaired things to prepare the home for sale, and they will most likely pay to get a professional appraisal to ensure that their asking price is reasonable. They will probably also pay a transfer tax and recordation fee, which vary by locale. They may also be responsible for prorated property taxes and interest until closing. And if they have a mortgage, they will have to provide proof of homeowners insurance coverage.
It is possible to reduce closing costs by shopping around for lenders and home inspectors. By doing so, buyers can negotiate more favorable terms. Buyers can also ask sellers to cover some of the buyer’s closing costs, known as seller concessions.
While traditional agent-assisted selling methods remain popular, there are now many alternatives that can save time and money. These include online listing services such as Zillow and Redfin, homebuying companies that take on properties in multiple markets, and cash-homebuying companies such as Opendoor, Offerpad and Knock. The latter options are especially attractive for sellers who are in a hurry to move and need to close quickly.
How Do I Find a Realtor?
It’s important to find a Realtor who’s a good fit for you. A great real estate agent is your guide and advocate, connecting you with other professionals like home inspectors and mortgage brokers. Whether you’re buying or selling a home, make sure to interview potential agents and ask for referrals from their past clients. This will give you insight into their experience and how well they worked with the client.
When searching for an agent, look for one who is a member of the National Association of Realtors(r). This designation indicates that they’re committed to upholding the ethics and standards of the profession. You should also ask about their education and training. Real estate agents can earn specialized credentials for working with certain types of buyers or sellers, such as first-time homebuyers or luxury homes.
Before you choose an agent, make sure you’re pre-approved for a mortgage. This will help you avoid wasting time looking at houses that you can’t afford. You should also consider the agent’s availability and communication style. If you’re planning on conducting your home search after work hours during the week or on the weekend, then you’ll want an agent who can accommodate your schedule.
It’s also a good idea to select an agent who has a lot of experience in your neighborhood. This will ensure they’re familiar with the area’s market and can help you negotiate a deal. They may also have a better understanding of what types of features sell in your area, such as pools or screened-in porches.
When selecting a Realtor, be sure to discuss commission rates with each candidate. This is typically a percentage of the sales price of the property, and it’s usually negotiable. You should also ask each agent about their process for preparing homes for sale and what they’ve learned from the experience of representing buyers or sellers in the past.
If you don’t have the time to interview many prospective agents, try using an online agent finding tool. These services pair you with real estate agents who meet your criteria, including number of years of experience, professional memberships and customer ratings.