The Critical Role of the Realtor® in the Real Estate Transaction

Surveys show that many homeowners and homebuyers are not aware of the true value a REALTOR® provides during the course of a real estate transaction.  At the same time, regrettably, REALTORS® have generally assumed that the expertise, professional knowledge and just plain hard work that go into bringing about a successful transaction were understood and appreciated.  Many of the most important services and steps are performed behind the scenes by either the REALTOR® or the brokerage staff and traditionally have been viewed simply as part of their professional responsibilities to the client.  But, without them, the transaction could be placed in jeopardy.  This document seeks to close that gap.

 

Listed on the following pages are nearly 200 typical actions, research steps, processes and review stages necessary for a successful residential real estate transaction and normally provided by a full service real estate brokerage and for which they are entitled to fair compensation.

 

Comprehensiveness

The list is by no means an attempt to set forth a complete list of services as these may vary within each brokerage and each market. Many REALTORS® routinely provide a wide variety of additional services that are as varied as the nature of each transaction.  By the same token, some transactions may not require some of these steps to be equally successful.  However, most would agree that given the unexpected complications that can arise, it’s far better to know about a step and make an intelligent, informed decision to skip it, than to not know the possibility even existed.

 

The REALTOR® Commitment

Through it all, the personal and professional commitment of the REALTOR® is to ensure that a seller and buyer are brought together in an agreement that provides each with a “win” that is fair and equitable.  The motivation is easy to understand. For most full-service brokerages, they receive no compensation unless and until the sale closes.  By contrast, there are firms that offer “limited services” in exchange for an up-front flat fee, or perhaps offer a menu of pay-as-you-go or “a la’ carte” options. Some even offer a sliding scale ranging from limited to full service. In these cases, the compensation of the REALTOR® is based on these reduced service levels with the seller bearing full responsibility for all the other steps and procedures in the selling process. In short, the marketplace truism is that “you get what you pay for.”

 

A Variety of Choices

The variety of brokerage business models in today’s real estate industry affords the homeowner a greater range of options than ever before.  But no matter which option is chosen, before signing a Listing Agreement or otherwise engaging the services of a REALTOR® and agreeing to compensate them, homeowners should understand exactly what services will, or will not, be provided.

 

Why Use A REALTOR®?

Not every real estate agent or broker is a REALTOR®.  That term and the familiar Block “R” logo are trademarked by the National Association of REALTORS® and can only be used by those are REALTOR® members through their local association of REALTORS®.  While all REALTORS® are state-issued licensees as agents or brokers, the major difference between a “real estate licensee” and a REALTOR® is that REALTORS® have taken an oath to subscribe to a stringent, enforceable Code of Ethics with Standards of Practice that promote the fair, ethical and honest treatment of all parties in a transaction. Non-member licensees have taken no such oath and are not morally bound to the ethical practices and principles set for in the REALTOR® Code. 

 

For that extra measure of peace of mind, ensure the individual seeking to represent you is both a real estate licensee and a REALTOR® by checking the “white pages” at http://www.realtor.com/findreal/WhichPages.asp?poe=realtor.

 

The Critical Role of the REALTOR®

Listed here are nearly 200 typical actions, research steps, procedures, processes and review stages in a successful residential real estate transaction that are normally provided by full service real estate brokerages in return for their sales commission. Depending on the transaction, some may take minutes, hours, or even days to complete, while some may not be needed.  More importantly, they reflect the level of skill, knowledge and attention to detail required in today’s real estate transaction, underscoring the importance of having help and guidance from someone who fully understands the process – a REALTOR®.  And never forget that REALTORS® are pledged to uphold the stringent, enforceable tenets of the REALTOR® Code of Ethics in their professional dealings with the public. Not every real estate licensee holds REALTOR® membership. Make sure yours does!

 

 

Pre-Listing Activities

  1. Make appointment with seller for listing presentation
  2. Send seller a written or e-mail confirmation of listing appointment and call to confirm
  3. Review pre-appointment questions
  4. Research all comparable currently listed properties
  5. Research sales activity for past 12 months from MLS and public records databases
  6. Research "Average Days on Market" for this property of this type, price range and location
  7. Download and review property tax roll information
  8. Prepare "Comparable Market Analysis" (CMA) to establish fair market value
  9. Obtain copy of subdivision plat/complex lay-out
  10. Research property's ownership & deed type
  11. Research property's public record information for lot size & dimensions
  12. Research and verify legal description
  13. Research property's land use coding and deed restrictions
  14. Research property's current use and zoning
  15. Verify legal names of owner(s) in county's public property records
  16. Prepare listing presentation package with above materials
  17. Perform exterior "Curb Appeal Assessment" of subject property
  18. Compile and assemble formal file on property
  19. Confirm current public schools and explain impact of schools on market value
  20. Review listing appointment checklist to ensure all steps and actions have been completed

 

Listing Appointment Presentation
 

  1. Give seller an overview of current market conditions and projections
  2. Review agent's and company's credentials and accomplishments in the market
  3. Present company's profile and position or "niche" in the marketplace
  4. Present CMA Results To Seller, including Comparables, Solds, Current Listings & Expireds
  5. Offer pricing strategy based on professional judgment and interpretation of current market conditions
  6. Discuss Goals With Seller To Market Effectively
  7. Explain market power and benefits of Multiple Listing Service
  8. Explain market power of web marketing, IDX and REALTOR.com
  9. Explain the work the brokerage and agent do "behind the scenes" and agent's availability on weekends
  10. Explain agent's role in taking calls to screen for qualified buyers and protect seller from curiosity seekers
  11. Present and discuss strategic master marketing plan
  12. Explain different agency relationships and determine seller's preference
  13. Review and explain all clauses in Listing Contract & Addendum and obtain seller's signature

 

Once Property is Under Listing Agreement
 

  1. Review current title information
  2. Measure overall and heated square footage
  3. Measure interior room sizes
  4. Confirm lot size via owner's copy of certified survey, if available
  5. Note any and all unrecorded property lines, agreements, easements
  6. Obtain house plans, if applicable and available
  7. Review house plans and make copy
  8. Order plat map for retention in property's listing file
  9. Prepare showing instructions for buyers' agents and agree on showing time window with seller
  10. Obtain current mortgage loan(s) information: companies and & loan account numbers
  11. Verify current loan information with lender(s)
  12. Check assumability of loan(s) and any special requirements
  13. Discuss possible buyer financing alternatives and options with seller
  14. Review current appraisal if available
  15. Identify Home Owner Association manager if applicable
  16. Verify Home Owner Association Fees with manager - mandatory or optional and current annual fee
  17. Order copy of Homeowner Association bylaws, if applicable
  18. Research electricity availability and supplier's name and phone number
  19. Calculate average utility usage from last 12 months of bills
  20. Research and verify city sewer/septic tank system
  21. Water System: Calculate average water fees or rates from last 12 months of bills
  22. Well Water: Confirm well status, depth and output from Well Report
  23. Natural Gas: Research/verify availability and supplier's name and phone number
  24. Verify security system, current term of service and whether owned or leased
  25. Verify if seller has transferable Termite Bond
  26. Ascertain need for lead-based paint disclosure
  27. Prepare detailed list of property amenities and assess market impact
  28. Prepare detailed list of property's "Inclusions & Conveyances with Sale"
  29. Compile list of completed repairs and maintenance items
  30. Send "Vacancy Checklist" to seller if property is vacant
  31. Explain benefits of Home Owner Warranty to seller
  32. Assist sellers with completion and submission of Home Owner Warranty Application
  33. When received, place Home Owner Warranty in property file for conveyance at time of sale
  34. Have extra key made for lockbox
  35. Verify if property has rental units involved. And if so: 1) Make copies of all leases for retention in listing file; 2) Verify all rents & deposits; 3) Inform tenants of listing and discuss how showings will be handled
  36. Arrange for installation of yard sign
  37. Assist seller with completion of Seller's Disclosure form
  38. "New Listing Checklist" Completed
  39. Review results of Curb Appeal Assessment with seller and provide suggestions to improve salability
  40. Review results of Interior Décor Assessment and suggest changes to shorten time on market
  41. Load listing into transaction management software program

 

Entering Property in Multiple Listing Service Database
 

  1. Prepare MLS Profile Sheet -- Agents is responsible for "quality control" and accuracy of listing data
  2. Enter property data from Profile Sheet into MLS Listing Database
  3. Proofread MLS database listing for accuracy - including proper placement in mapping function
  4. Add property to company's Active Listings list
  5. Provide seller with signed copies of Listing Agreement and MLS Profile Sheet Data Form within 48 hours
  6. Take additional photos for upload into MLS and use in flyers. Discuss value of panoramic photography

 

Marketing The Listing
 

  1. Create print and Internet ads with seller's input
  2. Coordinate showings with owners, tenants, and other Realtors®. Return all calls – weekends included
  3. Install electronic lock box if authorized by owner. Program with agreed-upon showing time windows
  4. Prepare mailing and contact list
  5. Generate mail-merge letters to contact list
  6. Order “Just Listed” labels & reports
  7. Prepare flyers & feedback faxes
  8. Review comparable MLS listings regularly to ensure property remains competitive in price, terms, conditions and availability
  9. Prepare property marketing brochure for seller's review
  10. Arrange for printing or copying of supply of marketing brochures or fliers
  11. Place marketing brochures in all company agent mail boxes
  12. Upload listing to company and agent Internet site, if applicable
  13. Mail Out "Just Listed" notice to all neighborhood residents
  14. Advise Network Referral Program of listing
  15. Provide marketing data to buyers coming through international relocation networks

  16. Provide marketing data to buyers coming from referral network

  17. Provide "Special Feature" cards for marketing, if applicable

  18. Submit ads to company's participating Internet real estate sites

  19. Price changes conveyed promptly to all Internet groups

  20. Reprint/supply brochures promptly as needed

  21. Loan information reviewed and updated in MLS as required

  22. Feedback e-mails/faxes sent to buyers' agents after showings

  23. Review weekly Market Study

  24. Discuss feedback from showing agents with seller to determine if changes will accelerate the sale

  25. Place regular weekly update calls to seller to discuss marketing & pricing

  26. Promptly enter price changes in MLS listing database

 

The Offer and Contract

  1. Receive and review all Offer to Purchase contracts submitted by buyers or buyers' agents.

  2. Evaluate offer(s) and prepare a "net sheet" on each for the owner for comparison purposes

  3. Counsel seller on offers. Explain merits and weakness of each component of each offer

  4. Contact buyers' agents to review buyer's qualifications and discuss offer

  5. Fax/deliver Seller's Disclosure to buyer's agent or buyer upon request and prior to offer if possible

  6. Confirm buyer is pre-qualified by calling Loan Officer

  7. Obtain pre-qualification letter on buyer from Loan Officer

  8. Negotiate all offers on seller's behalf, setting time limit for loan approval and closing date

  9. Prepare and convey any counteroffers, acceptance or amendments to buyer's agent

  10. Fax copies of contract and all addendums to closing attorney or title company

  11. When Offer to Purchase Contract is accepted and signed by seller, deliver to buyer's agent

  12. Record and promptly deposit buyer's earnest money in escrow account.

  13. Disseminate "Under-Contract Showing Restrictions" as seller requests

  14. Deliver copies of fully signed Offer to Purchase contract to seller

  15. Fax/deliver copies of Offer to Purchase contract to Selling Agent

  16. Fax copies of Offer to Purchase contract to lender

  17. Provide copies of signed Offer to Purchase contract for office file

  18. Advise seller in handling additional offers to purchase submitted between contract and closing

  19. Change status in MLS to "Sale Pending"

  20. Update transaction management program to show "Sale Pending"

  21. Review buyer's credit report results -- Advise seller of worst and best case scenarios

  22. Provide credit report information to seller if property will be seller-financed

  23. Assist buyer with obtaining financing, if applicable and follow-up as necessary

  24. Coordinate with lender on Discount Points being locked in with dates

  25. Deliver unrecorded property information to buyer

  26. Order septic system inspection, if applicable

  27. Receive and review septic system report and assess any possible impact on sale

  28. Deliver copy of septic system inspection report lender & buyer

  29. Deliver Well Flow Test Report copies to lender & buyer and property listing file

  30. Verify termite inspection ordered

  31. Verify mold inspection ordered, if required

 Tracking the Loan Process

  1. Confirm Verifications Of Deposit & Buyer's Employment Have Been Returned

  2. Follow Loan Processing Through To The Underwriter

  3. Add lender and other vendors to transaction management program so agents, buyer and seller can track progress of sale

  4. Contact lender weekly to ensure processing is on track

  5. Relay final approval of buyer's loan application to seller

Home Inspection

  1. Coordinate buyer's professional home inspection with seller

  2. Review home inspector's report

  3. Enter completion into transaction management tracking software program

  4. Explain seller's responsibilities with respect to loan limits and interpret any clauses in the contract

  5. Ensure seller's compliance with Home Inspection Clause requirements

  6. Recommend or assist seller with identifying and negotiating with trustworthy contractors to perform any required repairs

  7. Negotiate payment and oversee completion of all required repairs on seller's behalf, if needed

 The Appraisal

  1.  Schedule Appraisal

  2.  Provide comparable sales used in market pricing to Appraiser

  3.  Follow-Up On Appraisal

  4.  Enter completion into transaction management program

  5.  Assist seller in questioning appraisal report if it seems too low

 Closing Preparations and Duties

  1. Contract Is Signed By All Parties

  2. Coordinate closing process with buyer's agent and lender

  3. Update closing forms & files

  4. Ensure all parties have all forms and information needed to close the sale

  5. Select location where closing will be held

  6. Confirm closing date and time and notify all parties

  7. Assist in solving any title problems (boundary disputes, easements, etc) or in obtaining Death Certificates

  8. Work with buyer's agent in scheduling and conducting buyer's Final Walk-Thru prior to closing

  9. Research all tax, HOA, utility and other applicable prorations

  10. Request final closing figures from closing agent (attorney or title company)

  11. Receive & carefully review closing figures to ensure accuracy of preparation

  12. Forward verified closing figures to buyer's agent

  13. Request copy of closing documents from closing agent

  14. Confirm buyer and buyer's agent have received title insurance commitment

  15. Provide "Home Owners Warranty" for availability at closing

  16. Review all closing documents carefully for errors

  17. Forward closing documents to absentee seller as requested

  18. Review documents with closing agent (attorney)

  19. Provide earnest money deposit check from escrow account to closing agent

  20. Coordinate this closing with seller's next purchase and resolve any timing problems

  21. Have a "no surprises" closing so that seller receives a net proceeds check at closing

  22. Refer sellers to one of the best agents at their destination, if applicable

  23. Change MLS status to Sold. Enter sale date, price, selling broker and agent's ID numbers, etc.

  24. Close out listing in transaction management program

 

Follow Up After Closing

  1.  Answer questions about filing claims with Home Owner Warranty company if requested

  2. Attempt to clarify and resolve any conflicts about repairs if buyer is not satisfied

  3. Respond to any follow-on calls and provide any additional information required from office files.