How do our clients motivate and frustrate us? They are often uninformed about the basics of what we do for a living.
What does a real estate agent actually do?
Next, let’s examine what a real estate agent can offer potential homebuyers. In this day and age, it might feel like you can find a new home with just the click of a button and without the help of a real estate agent.
Although some people may try to convince you that you don’t need a real estate agent when buying a home, they are actually essential in helping you through the process. The agents will be familiar with the target neighborhood, will assist in finding the perfect home, and will have access to information not otherwise available due to their resources, like the MLS database.
The company will guide you through the purchasing process, ensuring that your offer is completed and that your contract includes the appropriate clauses to protect you. If you do not have an agent, you might have to do all the paperwork and research yourself, which could be expensive or cause you to lose your dream home.
According to Cynthia Kauffman, a top Florida real estate agent, agents should make home purchases as simple and easy as possible. This is because homes are a big investment and often come with a lot of pressure.
According to Kauffman, real estate agents aim to make the process of buying or selling property less stressful for those involved. We want to take the stress away from them and make it as easy as possible.
Different types of real estate agents
Some of the titles and certifications that you may have come across during your initial search for an agent may be unrecognizable. There are many idiomatic expressions in English. Here are some of the most common and what they mean.
- Realtor®: A Realtor® is a licensed real estate agent that is also a member of the National Association of Realtors (NAR). These agents must abide by the association’s Code of Ethics and its governing rules outlining an agent’s duty to their clients, the public, and other real estate professionals. Of the estimated 3 million active real estate agents in the U.S., there are over 1.5 million Realtors®. Kauffman says if you work with a Realtor®, you’re usually getting “a step up.”
- Certified Residential Specialist (CRS): Agents trained and knowledgeable in buying and selling residential properties. To receive this credential, agents must complete a thorough course on the ins and outs of residential sales.
- Accredited Buyer Representative (ABR): Real estate agents specialized in working with buyers. These agents have an in-depth knowledge of helping buyers during every step of the home transaction.
- Seniors Real Estate Specialist (SRES): Agents trained and knowledgeable in helping buyers and sellers over 50 years old through the home search.
We compiled a list of the 15 things we think are most important for our clients to know about us and about real estate in general.
1. We Make Less Money Than You Think
Your clients may be surprised by how much commission you earn when they see it listed on their closing statement. They may have also been calculating your commission in their head during your listing appointment and come to the same conclusion.
While you can make good money in the real estate industry, your clients probably imagine you make more than you actually do.
We need to pay for brokers, and we also have additional expenses for things like marketing, lead generation, and technology. We also have to pay for our own health insurance and taxes, which most of our clients don’t even think about.
The average agent only takes home 25% of the commission.
2. Homeownership Isn’t for Everyone
No one wants to hinder the American Dream, but it is not realistic for everyone to own a home. We’ve all had clients that we realized, after spending some time with them, that it wasn’t a good idea to work with them.
Being a homeowner is a lot of responsibility. Homeowners have upkeep, regular maintenance, and improvements to cover. They will have to pay taxes, insurance, and utilities in addition to their mortgage payment and at the same time be aware of how their investment is doing.
Many buyers are not aware of the extra costs involved in being a homeowner and change their minds after learning about them.
3. Our Contract Makes Us Exclusive—Stop Talking to Other Realtors
We have all been in a situation where we are talking to a client about plans to show them homes this upcoming weekend and they mention that their other agent already has showings scheduled.
When two or more agents discover they are working for the same client, things can get complicated very quickly. In some states, if you just show homes to a buyer, it creates implied agency, which can be a real problem.
Although it’s not ideal, if this situation occurs (which it inevitably will at some point), you need to be professional, cooperate with the other agent involved, and find a resolution.
4. You Are Not Likely to Find Your Dream Home
HGTV teaches its viewers that it is possible to find their dream home through real estate. In reality, it is very unlikely that this will happen.
It is not realistic to expect to find a perfect home within a short time frame and with a limited budget as is often seen on TV. Buying a home is usually a more gradual process that requires some willingness to compromise on certain aspects.
We want to find your client their perfect home, even if they have a long list of requirements. But checking off absolutely everything on the list? Unlikely to happen.
5. Every Home Needs Staging, No Matter How Great Your Decorating Taste
No matter whose home you are selling, it will need some staging. Many of our clients want their homes to be decorated like Joanna Gaines’, however they do not take into consideration that they are decorating their home to live in, not to sell.
Furniture and decor that is common and designed to maximize space and flow allows potential buyers to see what it would be like to have their stuff in the home.
More often than not, it is essential to success to stage your client’s home, which is often counter to how people live in their own homes.
6. Buying a Home Requires Cash, Even if You’ve Secured a Mortgage
Although mortgages are taken out in order to afford a home, the process is still expensive.
For sellers, an agent can be the key to a successful, low-stress transaction An agent’s role is more than just facilitating the financial transaction between a buyer and a seller. They can be integral in providing a successful and low-stress experience for the seller. When buying a home, your client needs to have cash reserved for a down payment, an inspection, an appraisal, and to cover closing costs from their mortgage and title companies—as well as miscellaneous expenses that might pop up through the escrow process.
A savvy buyer has twice as much saved up in emergency cash as they would need to cover out-of-pocket expenses on their home.
7. Selling Your Home Also Requires Cash
Working with sellers who are short on cash can be difficult. Sellers need to realize that they will have different expenses than buyers, but both need to be aware of additional costs.
The costs of staging, improving curb appeal, professional cleaning, some closing fees, and moving expenses are often not able to be covered by the proceeds of a client’s sale. Sellers should ensure that they have 1% of the estimated sale price available in cash to cover any potential expenses.
8. Your Zestimate Isn’t Accurate
I’ve had to explain to clients multiple times that their Zestimate is, at most, a starting point for the value conversation about their home. Sellers may see a high number on their Zillow app and not consider if it is accurate. They are too busy making plans for the money they think they’ll generate by selling their house at Zillow’s estimation, which is much higher than it should be.
If you want a more accurate estimate of your home’s value, it’s best to consult a professional in a volatile market. Zestimates can be less accurate in these conditions. The tools work by conducting mini analyses of the market that is comparable based on data that is very general. The faster the market is moving, the less accurate the results of the tools will be. Offer your clients and prospects CMAs that are personal to them. Make sure to explain your reasoning behind your estimated valuation to your client, and why you believe the other valuations are inaccurate.
9. An Open House Is Likely to Benefit Me More Than You
Open houses are beneficial for several different people involved in a real estate transaction. Many home buyers enjoy the convenience of open houses because they can tour several properties without feeling pressured to commit to any of them.
Open houses are beneficial for agents because they allow the agent to interact with a large number of potential clients, collect contact information, hand out business cards, and earn new business.
So, why do sellers like them? It’s not because they bring the best offers. Although open houses may cause a lot of commotion, the great majority of reasonable offers come from buyers who are working with agents rather than those who just show up at the open house.
Sellers enjoy open houses because it demonstrates that the agent is working hard to sell their property. Open houses are visible, public, and an event. Sellers often see open houses as the ideal opportunity to sell their house.
10. Once You’ve Applied for a Mortgage, Don’t Change Your Financial Situation
Many real estate agents find that their buyers are least informed about the topic of financing. This includes information such as qualifications, timelines, and processes. This happens occasionally, where a buyer believes they have a mortgage because they’ve been pre-approved, but they actually don’t have one yet. What they have is a starting budget to shop for a home.
Changing your financials during the mortgage approval process is the worst thing you can do. If someone increases their debt-to-income ratio by doing things like shopping with credit cards, getting a loan, or buying a vehicle, it could stop them from being approved for a mortgage.
11. We Can Fire You
It’s true. We can fire clients. Yes, even listing clients. If you have a buyer or seller client who is toxic, abusive, or has proven that they are not worth your time, emotional energy, or resources, you can release them!
If you decide to take this path, most buyers and sellers will be disappointed with the outcome. However, clients who complain a lot – especially those who have a listing contract with you – need to be reminded that they actually have a contract with the brokerage you work for, and not with you specifically. If your broker wants to remain listed with the brokerage, they can easily reassign your listing to another agent.
12. We Have a Life Outside The Job
As a real estate professional, people expect you to be able to schedule things in advance and be available when they need you. Think about it. No one becomes angry with their doctor or accountant when they do not answer a call at 9:30 on a Sunday evening. Your clients may think the world is ending when your phone goes to voicemail.
Look, we get it. There will be rare cases when it is crucial to act quickly and we need to be available to do what is best for our client. However, those events are so rare that they are almost not worth mentioning.
Our clients expect us to be available more often than we actually are. This does not mean you should give up living your life. It is critical to your success to set appropriate expectations and boundaries around your time, and to ensure that everyone in a transaction understands when and how they can reach you.
13. We Negotiate for a Living, Trust Me
People who are buying or selling a house often want to be the one in charge of the negotiation, either by making a very low offer or by countering with a high number.
What buyers and sellers lack are perspective and experience. The other party in the negotiation does not have the same level of experience as the speaker, meaning they are less likely to be successful in getting a good deal. Although we should be open to new ideas, our clients hired us for our experience in negotiation, which is the back-and-forth discussion to resolve a disagreement.