Deciding Whether Or Not To Use A Real Estate Broker
If you are selling your home, you may want to consider using the help of a real estate broker
. However, you certainly do not have to-the choice comes with pros and cons, and is ultimately up to you.
Single-family homes in desirable neighborhoods sell quickly, and are always in demand. However, some other types of properties-office buildings are often a tougher sale.
A real estate broker can be especially helpful when trying to sell a problem property. He may know investors willing to take a hard look at your offer, where the average seller will not.
Remember, brokers and agents are salespeople. They are only paid when they deliver their service.
A bad deal for you can still be a good deal for the broker, because he is paid either way. If you choose to go with one, be sure to select someone with a good local reputation.
Try to get referrals from friends or relatives, from a local real estate association, or by using a prescreened service. Make sure that they understand your needs, and your desire to market the property aggressively.
Ask how soon he or she expects to show the property and at what price he thinks he can sell it for. Make sure that you can sign a short-term contract stating that the property must be sold for at least your minimum price.
Next, there are several different types of listing agreements. The least popular for professionals, which may be the best for you, is the "non-exclusive" or "open listing agreement."
Here, the agent enters into an agreement with the homeowner, whereby the broker will be paid a commission if he sells the property. However, this does not preclude you from selling the property yourself or entering into the same agreement with several brokers.
If the broker does not sell the property, he or she is not paid. The "exclusive agency agreement" gives only your agent the authority to sell the property.
This agreement requires all other to work through the listing broker when showing the home or submitting offers. The homeowner does retain the right to sell the property on his own, and if he does, they would not be entitled to a commission for the sale.
The third and most common agreement is the "exclusive right to sell" listing. Here, the homeowner gives over the exclusive right to sell the property for a specific period of time.
The broker receives a commission even if the homeowner sells the property himself. No matter which type of listing agreement used, it constitutes a legally binding agreement between the agent and the seller whereby they are attempting to locate a suitable buyer according to terms set by the seller.
If your professional finds a buyer, a commission fee is deemed to have been earned for them. Make sure that you agreement includes the amount of compensation due the broker, a set period of time the agreement will be in effect, and at what point the commission is deemed to be earned.
There should also be a description of the home to be sold, and the scope and authority the broker has in locating a suitable buyer. These items are suggested and preferred, but not required in the agreement.
Further, the law will sometimes infer these elements from the circumstances surrounding the transaction. Real estate brokers and salespersons are licensed by the state.
They have to pass a test that demonstrates they know the basics and the legalities regarding the buying and selling of real estate, though little else beyond that. During the real estate boom of the 1980s, these professional schools were filled with those who wanted to cash in.
Unfortunately, good business practices and skills are not taught in these classes. Neither are important topics such as evaluation or property analysis.
Every industry has its good practitioners and its bad. There are some very good agents out there who know how to properly deal with their customers.
They continually educate themselves in order to provide the best service possible. They work hard to make sure their customers are satisfied.
To avoid being talked into a bad deal, know the value of your home, and do your homework before you select anyone to be in on the sale with you. With this knowledge, you can decide if you want to use one or not.
by: Jack Landry
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