Working with Realtors

By Law, your Realtor has fiduciary responsibilities to you. Basically, you are hiring the Realtor to represent you when purchasing a home; therefore, your Realtor has to represent your best interest. This means your Realtor must be honest, loyal, and confidential.

So who pays for this representation, you ask? The Sellers! In nearly all-residential real estate transactions, the Seller pays the real estate commission to all Realtors.....more on this later.

Here are a few key points when working with a Realtor........no longer do you have to sift through a homes book and telephone each individual Realtor who has a home that interests you. You can work with ONE Realtor that makes you feel comfortable, and that Realtor can show you any other Realtor's listings. How? Because Realtors share and advertise their listing among one another. In most cases, it's an open door policy where Realtor A can show Realtor B's listings and vice versa.

If you are interested in building a home......it's probably a good idea to inform your Realtor. Builders normally advertise their homes to Realtors. So the best place to go and obtain knowledge regarding various builders is......your Realtor. Most likely your Realtor can represent you in the transaction when building your new home, as well.

With that, here's how things operate in the Realtor world. A Realtor is an individual who has passed the state required course to obtain a real estate license. In order to be certain that Realtor's remain current with state laws, rules, regulations, etc., the state requires each Realtor to complete a specific number of continuing education courses within every two years. If the Realtor does not complete these required education course, the Realtor license turns inactive - meaning he or she cannot actively represent clients in a real estate transaction.

In most states, there are three basic types of real estate licenses that Realtor may obtain; each on requires more specific education requirements. The license types are:

1. Real Estate Salesperson's License

2. Real Estate Broker's License

3. Real Estate Appraiser's License

Realtor's work for a real estate agency, and each agency has ONE broker. The broker is responsible for every Realtor employed at the agency. Obviously in order to be a broker, you must obtain a broker's license. Brokers are responsible for all real estate transactions at their agency.

In fact, all monies must go through the broker. A real estate salesperson does not receive a commission from the client that he or she represents. Instead, the client pays the broker a commission and the broker in turn pays the agent.

In most real estate transactions, there are two different Realtors. One representing the buyer and the other representing the seller. Normally, the seller pays a commission to the listing agency for selling their home. This commission was negotiated when the seller's originally placed their home on the market. As mentioned, the commission is paid to the selling agency's broker, not the real estate agent. All commissions are handled through the brokers. The selling agency broker then collects the full commission from the sellers and then pays the buying agency's broker a portion of the commission. The buying agency's commission is pre-determined, as well. Both the selling agency's broker, and the buying agency's broker pay their individual agents a portion of the commission. Again, this amount is pre-determined.

In some cases, the buying agent and the selling agent may be from the same agency. In this case, the broker is representing both the buyer and the seller. The broker, and his or her agents, must disclose this fact to all parties involved in the transaction. This is often referred to a "dual agency" agreement.

In a nutshell, that's it!!! Knowing that, let's continue to the next step... ..... page 2 of 10