Realty Services

A real estate broker or real estate agent is a party who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy.

Some Examples:

  • Comparative Market Analysis (CMA) — an estimate of the home’s value compared with others. This differs from an appraisal in that property currently for sale may be taken into consideration (competition for the subject property).
  • Exposure — Marketing the real property to prospective buyers.
  • Facilitating a Purchase — guiding a buyer through the process.
  • Facilitating a Sale — guiding a seller through the selling process.
  • FSBO document preparation — preparing necessary paperwork for “Sale By Owner” sellers.

Services provided to seller as client

Upon signing a listing contract with the seller wishing to sell the real estate, the brokerage attempts to earn a commission by finding a buyer for the sellers’ property for highest possible price on the best terms for the seller. In Canada, most provinces’ laws require the real estate agent to forward all written offers to the seller for consideration or review.

To help accomplish this goal of finding buyers, a real estate agency commonly does the following:[citation needed]

  • Listing the property for sale to the public, often on an MLS, in addition to any other methods.
  • Based on the law in several states, providing the seller with a real property condition disclosure form, and other forms that may be needed.
  • Preparing necessary papers describing the property for advertising, pamphlets, open houses, etc.
  • Generally placing a “For Sale” sign on the property indicating how to contact the real estate office and agent.
  • Advertising the property. Advertising is often the biggest outside expense in listing a property.
  • In some cases, holding an open house to show the property.
  • Being a contact person available to answer any questions about the property and to schedule showing appointments.
  • Ensuring buyers are prescreened so that they are financially qualified to buy the property; the more highly financially qualified the buyer is, the more likely the closing will succeed.
  • Negotiating price on behalf of the sellers. The seller’s agent acts as a fiduciary for the seller. This may involve preparing a standard real estate purchase contract by filling in the blanks in the contract form.
  • In some cases, holding an earnest payment cheque in escrow from the buyer(s) until the closing. In many states, the closing is the meeting between the buyer and seller where the property is transferred and the title is conveyed by a deed. In other states, especially those in the West, closings take place during a defined escrow period when buyers and sellers each sign the appropriate papers transferring title, but do not meet each other.

Services provided to buyers

  • Buyers as clients

With the increase in the practice of buyer brokerage in the United States, especially since the late 1990s in most states, agents (acting under their brokers) have been able to represent buyers in the transaction with a written “Buyer Agency Agreement” not unlike the “Listing Agreement” for sellers referred to above. In this case, buyers are clients of the brokerage.

Some brokerages represent buyers only and are known as exclusive buyer agents (EBAs). Consumer Reports states, “You can find a true buyer’s agent only at a firm that does not accept listings.”[13] The advantages of using an Exclusive Buyer Agent is that they avoid conflicts of interest by working in the best interests of the buyer and not the seller, avoid homes and neighborhoods likely to fare poorly in the marketplace, ensure the buyer does not unknowingly overpay for a property, fully informs the buyer of adverse conditions, encourages the buyer to make offers based on true value instead of list price, which can sometimes be overstated, and works to save the buyer money. A buyer agency firm commissioned a study that found EBA purchased homes were seventeen times less likely to go into foreclosure.[citation needed]

A real estate brokerage attempts to do the following for the buyers of real estate only when they represent the buyers with some form of written buyer-brokerage agreement:

  • Find real estate in accordance with the buyers needs, specifications, and cost.
  • Takes buyers to and shows them properties available for sale.
  • When deemed appropriate, prescreens buyers to ensure they are financially qualified to buy the properties shown (or uses a mortgage professional, such a bank’s mortgage specialist or alternatively a Mortgage broker, to do that task).
  • Negotiates price and terms on behalf of the buyers and prepares standard real estate purchase contract by filling in the blanks in the contract form. The buyer’s agent acts as a fiduciary for the buyer.