The job of the Real Estate agent is no longer to “find” you a home. Lets be honest… no matter how good I am at searching the MLS, you’re spending 6 hours a night on every real estate site you can find, mostly because you’re positive that you’re better at finding THE one, than your agent is.
And you’re probably not wrong… I don’t know that there has ever been a buyer, in the history of Real Estate, that didn’t end up falling in love with a home that never fell in their exact parameters. An MLS search is only as good as the parameters we have to work with.
Inevitably, you’ll find something that doesn’t fit your premature vision of home… It’s like describing your ideal mate, down to eye color and career path… does it ever work out like you expect? No.
When the right one comes around, you know.
My point in all that is that Real Estate Agents are not necessarily in charge of finding the home. They’re tasked with a much bigger challenge.
Navigating the home buying process.
Most of the Real Estate Transaction Happens Behind the Scene
EVERY transaction is different. They’re like DNA coding or finger prints… there will never be an identical situation between sales. And how could there be?
The recipe for a Real Estate transaction is this:
- The house, one of the several million available, each offering its unique combination of color schemes, flooring, lighting fixtures, appliances, yard work and “character” to it.
- The Seller, emotionally attached to the home, and all it’s “Charm”.
- The Sellers Agent, unique in their experience level, their support and brokerage policies, their marketing and negotiating skills etc.
- The Buyers, emotions everywhere, unsure about anything, while also being sure of everything… obtaining “solid” advice from every human being they encounter, all with influence to their experiences. And they bring their unique credit and financial situations into the experience.
- The Buyer Agent, unique in their experience level, their support and brokerage policies, as well as their experience with negotiations, inspections, lending and more.
- The Escrow Agent, also unique in their expertise and experience. They are hired as a neutral third party, but their experience in making tough decisions has probably influenced how they work.
- The Lender, also unique in their experience and communication level. Whether they’re Brokers, Bankers or Lenders…. New, veteran…. Working on a team or solo…. All of these things factor into how they do business.
- The Appraiser, the person who gives their “opinion” of value on the home, in order to justify the price that the bank is willing to lend on.
- The Inspector, the person that will come through with a fine tooth comb, letting the buyer know of all the things out of code, out of order or just out of sorts… rarely do they spend much focus on the positive aspects, but I’ve seen it happen once.
Ultimately, once you put all of these unique people and home into the mix…. There is just NO way for any 2 transactions to flow the same.
The agent is KEY
Whether you’re the buyer or the seller, hiring the right agent is the key to everything. Most of the transaction is handled behind the scenes. Sure, it’s nice to drive all around town, looking at hundreds of homes… if you’re into that sort of thing… And sure, it’s fun to have someone to help you stage your home to look like it just came off of the Home Network… but, ultimately, the agents real work is done behind the scenes of a transaction.
I’ve often said that Agents do a terrible job at relaying their real value… They talk about their open houses, their new listings and how excited they are for their buyers… but they rarely talk about what happens in between. Why is that?
It’s not for lack of interest.
You may not realize this, but an agents compensation is actually $1 for every time cry, slam their phone down, or say “What the ****?”… I’m kidding… it’s not, but the math actually works out the same.
The Sellers Agent
Everyone knows that the sellers agents get the listing agreement, put the home in the MLS, the sign in the yard… and when they get that offer signed, the sellers typically thank them, as if they just completed their job.
Whoa buddy…. We just started.
Sellers agents start the first phase of their job well before the listing agreement has been signed.
Hours are spent researching the area, to discover a proper listing price.
Pricing isn’t as easy as just checking Zillow, like some sellers may want to believe. It’s a little more strategic than that.
Every home and every buyer is different. A Sellers agent has to research current and past sales, in order to determine what a proper price may be. The house across the street sold for $XXXk, but it had different counter tops, newer paint, and oh yeah… a buyer that is no longer looking for a home. Considering the right price to market the home at is one thing… where might it appraise, what is it’s competition, and ultimately, what is the motivation of the Seller? Are they looking for a quick close? That’s a different price with a different type of buyer. Or are they fine where they are for now, they’re just looking for the right price. Great… timing and types of buyers affect this sale differently.
Once they have the listing, it’s time for marketing…
Professional photos are ordered (assuming you hired a great agent)
A sign post is installed and the street view marketing begins. A quality sign will help with exposure by passer-byers.
The home is listed in the MLS, which is a process of its own. Attention to detail, and the description can really make or break great marketing. And while this is typically syndicated out everywhere, not every site will collect the data correctly, so a great agent will ensure that the big sites where buyers find homes are correct.
In a normal market, marketing the home doesn’t just stop with the initial MLS input. Continuous exposure, updates to the listing, paid ads, and open houses must be done. You don’t want your house just sitting, becoming a stale listing with the words “Hurry, this won’t last!” in the description for 67 days straight. Marketing is continuous, strategic and psychological.
Once you have your offer, the agent is making calls to the buyers lender, verifying the qualification, proof of funds an sometimes, the quality of the lender as well. Anything could go wrong when it comes to financing a home… not all lenders are cut from the same cloth, some (brokers) have fiduciary and work at a higher level, and some (bank lenders) pass the buck the moment the application is signed.
In some cases, multiple offers may come in, creating ten times the work for the agent, checking on every offer, the validity of every pitch and compiling a comparison of all the offers to fully explain the strengths and weaknesses between them. Their expertise here could make or break the sale and effect the sellers bottom line. Choosing the wrong offer could be detrimental if the home comes back on the market due to a failed escrow.
Documents have to be filled out by all parties, and in most cases, these are held to timeframes and contractual obligation. Agents know these timeframes like the back of their hand, so they keep everyone on task and ensure a smooth going.
Inspections will be scheduled and your agent will ensure everything goes smooth.
If the home is vacant, the agent is likely checking on the home regularly to make sure lights are off, and doors are locked, spaces stay clean etc.
Title searches and HOA demand may result in surprises… your agent is likely finding a resolve before you’ve had a chance to open that email from Escrow.
The appraisal is ordered and this is where the agent compiles all the information they used to value the house, and put it into a nice appraisal package, ensuring that the seller is getting every dollar of value in their home.
Some times, agents will be there to assist with repairs and maintenance of the home, especially if the buyer has requested repairs. Most agents have seen many repairs and improvements made, so they often have the best connections for value and quality.
Throughout the transaction, the agent is keeping the lender, the buyers agent and the escrow officer on pace and up to date, as well as relaying any changes or notifications to their client.
Then they help with scheduling the closing signing appointment with the Escrow agent and Sellers.
After everything has been completed, terms are met and all parties are ready to pass off keys, the agent will likely do one more check on the property and with the client to make sure that everything is in order, paperwork is complete and files and all parties are good.
The Buyers Agent
Many of the same duties put on the Sellers agent, are also put on the buyers agent… including checking in with Lenders and Escrow, or keeping everyone on task. In an ideal world, if both agents are great at their job, this becomes simple. But, in most cases, there will be a bit of hand holding and accountability on one side or another.
Outside of the timeframes and paperwork, the buyers agent usually starts their work MUCH earlier…. Often showing the buyer 20-50 homes… sometimes more, sometimes less…. But they will spend weeks, months or even years working with a client before they’re under contract.
They start by helping the client prepare for the reality of buying a home. Often starting with connecting them to a proven, successful Lender that can help them prepare for the best buying experience.
Once they’re approved for a loan, they’ll refine a search in the MLS, and set up an automatic notification for when homes in their Buyer’s criteria hit the market.
Calls are made every day, whether it’s the lender, the client or the 10 homes that the buyer is interested in. They’re finding out about availability, any issues with the house, or just gathering info in case the buyer is interested and wants to make an offer. Establishing a relationship with the cross agent can sometimes be what makes the offer stand out.
Some times the buyer will choose a home the first time out to look… but that is exceptionally rare. Most of the time, the buyer simply wants to get feel for what’s out there, and will more than likely decide to put in an offer after viewing several homes.
Once a home has been selected, much like running comparatives for the seller, the agent must look at the pricing strategy and come up with a fair range for the home to help guide the buyer when making their offer. The buyer is relying on their expertise to find the right price. The agent must strategize this and come up with a comfortable recommendation, since the buyer’s livelihood is relying on their opinion.
They will then use their own knowledge and experience to help the buyer determine the right value based on the condition of the home, the comparable prices, the current market etc.
Communication with the Lender is key and the agent has probably had hours of convo with them at this point, but now is when they connect to ensure that pricing will work with the buyers budget, all figures factored together… and a prequal is issued to the agent to submit with the offer.
When an agent submits an offer, there is MUCH more to it than simply sending the signed documents over to the Sellers agent. They must paint the picture behind the offer. Their expertise will help them decide whether they lean in to one aspect or another… what is the motivation of the seller, how does the agent work, what are all parties hoping to accomplish. Their pitch to get the offer accepted could fall of deaf ears… or it could be the thing that gets their buyer the home, even if they are priced lower than other offers. This pitch is where an agents value could be worth THOUSANDS.
Once under contract, navigating the contractual process can be stressful. The agent, just like the Sellers agent must keep everyone on track, maintain all contract documents, disclosures, HOA, Escrow and lending documents.
They’ll handle and disburse notifications, disclosures, signed agreements, handle changes in terms, manage inspections and escrow on behalf of the buyer.
It’s likely that an agent will spend 1-3 hours a day working on their clients file in some way or another, always shouldering the additional stress of timeframes and keeping their clients Earnest money secure.
Lenders and Escrow
Lenders and Escrow agents don’t get enough credit for what they do during a transaction.
Most of what they do is not seen by either the client, the agent, or both.
Escrow will keep earnest money safe, they research title issues or disputes that could harm the parties, they ensure that the moneys are handled correctly, according to the transaction, as a neutral 3rd party.
They send an HOA demand letter to the property management company, when the home is located in a homeowners association, ensuring that there are no pending violations or late fees on the home.
They will also send out identity packets to each party to ensure that they are transferring title between the correct individuals, ensuring a secure sale.
Lenders will flood the buyer will paperwork demands, both before and after going under contract. Their job is to get a clear picture of the buyers finances, and ensure that the loan can be sold and/or secured for the investor backing the loan.
Most of the action is done completely behind the scenes and often the agent won’t know when documents are sent, received or even needed.
The best practice is for the clients to keep the agent apprise of everything so that they can help keep things running smoothly.
Many of the timelines that the agents are working with may also involve lending and escrow, but unfortunately, often times they may fail to perform on time, leaving the buyer responsible for their actions, putting them in potential breach of contract.
One of the many ways that an agent will help their client is by assisting them in selecting the best Lender and Escrow agent, to help ensure timelines are adhered to.
Communication is KEY, so by using tried and true Vendors, they can also help keep the parties interest safe.
What you see is NOT all that you get
No matter which side of the transaction you’re on, just know that there are a lot of variables to consider when buying or selling the home.
Choosing the right agent, the right Lender and the right Escrow Agents will help you to stay on track and protect your money and interests… but keep in mind that the job is not done the moment you’re under contract.
The best agents are devoted to their client, and to being experts in the industry. The job is not done once the contract is accepted. You may not see all of the hustle and bustle, but it’s there. If you were a fly on that agents phone, as they answered late night calls, or responded to 72 emails on your behalf before they got their kids off to school, you’d be shocked by how much dedication goes in to running a real estate business.
Now… Times all that by the number of active clients that an agent will serve at one time. (typically 2-10) You can see why they always seem ‘so busy’. 😉 Because they ARE!
For all those agents that are out there taking care of their clients at a higher level, continuing to stay educated and informed and who still manage everything themselves… You are the real MVP. We applaud you!