Roles in the real estate sector

A career in real estate

Working in the real estate profession offers the opportunity to meet a wide range of people while ca variety of different tasks and responsibilities. It can be very satisfying to assist people with importa such as buying, selling or renting a home or investment property.

It takes a special person to work in real estate: someone who is committed to providing exceptiona service. Developing the skills necessary to be confident, capable and successful takes dedication application.

Although there are many exciting things about working in real estate, you should not go in with you closed: the hours can be long with late nights and weekend work, and employment can be subject fluctuating market and intense competition.

At the same time, you should be prepared to follow high ethical standards. After all, you will freque involved with transactions that might represent the most important financial decisions ever made b

Generally, real estate agents lease, manage, value, buy and sell residential, rural, commercial and property or businesses on behalf of their clients.

Contact the Real Estate Institute in your state or territory for further information about careers in re including educational requirements and training courses. For contact details click here. For roles in the real estate sector, see below:

Real estate agent

Real estate agents broker business transactions that involve real property, or businesses. The rea could be undeveloped land sites, residential homes, commercial or industrial buildings, units, townh apartment complexes, retail centres or vacant parcels of land.

Most real estate agents deal with residential property such as houses, home units, townhouses and land. Some firms, however, specialise in types of real estate, which are used to generate income fo investors. These include shopping centres, hotels, motels, industrial complexes, home unit or town developments, office blocks, etc.

Real estate agents offer a range of services depending upon the type of property they have been a sell, lease or manage on behalf of an owner. The agent must always consider the owners wishes a contractual conditions and the marketing of the property. The real estate agent, once appointed to property, begins a marketing campaign to attract potential buyers to the property. They then take p buyers to view the property and supply additional information.

The real estate agent acts as a go-between for the owner and the buyer, assisting with their negotia reach an agreed sale price for the property. The real estate agent continues to act on behalf of the the property is legally transferred to the new owner. For these services the real estate agent receiv payment (known as a commission) from the owner.

Real estate agents are also involved in the letting of property for owners. The agent markets the pr lease and arranges for potential tenants to view the property. The agent acts as a go-between for t (landlord) and the tenant in negotiation of the rent payments and terms of the tenancy agreement. estate agent normally draws up the tenancy agreement between the landlord and tenant and then a behalf of the landlord in the day-to-day management of the property. The agent collects the rent, a repairs and maintenance and finds new tenants when necessary.

Real estate agents need to have an engaging personality and be able to communicate, understand to a great variety of people. Initiative, foresight, organisational ability, integrity and a genuine conce others are essential character traits of a good real estate agent.

Salesperson

Sales people make up a large sector of the real estate profession and work on behalf of property ve (sellers). While the prime duty of care involves the client, who is in most cases the vendor, there is obligation to be fair to all parties in a transaction. The duties of a sales person include:

appraising properties obtaining listings of properties for sale marketing the property seeking out and introducing buyers offering advice on current market conditions arranging and overseeing inspections negotiating the sale liaising with legal representatives.

In a small agency a salesperson might be directly involved in all aspects of marketing, including wri and placing advertisements. Larger agencies tend to employ specialists in some areas. Auctioneer

Auctioneers conduct public sales, usually on the site of the property. Auctioneers are required to ex contract and the propertys features and answer any questions from potential purchasers before ca bids.

Strict guidelines govern the conduct of auctions. In most cases, a person must not conduct, or atte conduct, an auction for the sale of any real estate or business unless that person:

is a licensed real estate agent; or is employed as an agents representative.

An auctioneers public performance reflects upon the image of the agency and the profession. A go auctioneer can also increase the profile of the agency enormously. Property manager

Property managers lease and manage residential, commercial, industrial and retail property on beh property owners. The property managers duties include:

selecting tenants collecting rent arranging repairs marketing the property negotiating leases and rent reviews advising on market rents representing the property owner at tribunal hearings.

Large corporations often employ property managers to look after the housing needs of their employ financial institutions employ property managers to look after their retail outlets.

The professional property manager needs excellent communication and people skills, knowledge of relevant legislation, including building maintenance and town planning, and an understanding of ho conditions affect the property market. For many years, property management was regarded as a good stepping stone for a career in sale marketing. It is now widely recognised as an attractive, long-term career option in its own right. Body corporate manager

The role of the Body Corporate Manager is similar to that of property manager; they control and adm area known as common property in a subdivided property that is usually part of a block of units or Functions of a body corporate manager include:

managing and attending meetings preparing and distributing minutes and correspondence arranging repairs and general property maintenance collecting and managing funds arranging insurance advising of any changes to relevant legislation and regulations.

Business broker

Business brokerage is a highly specialised form of real estate agency practice. Many businesses o leased premises, so the sale of a business will not necessarily involve the sale of premises as well. business brokers client is the owner of the business.

A business broker can specialise in selling a particular type of business, such as milk bars, caravan hotels.

If you are interested in business brokerage as a career, it would be a good idea to include some ac subjects in your secondary or tertiary studies.

Buyers agent

A buyers agent or buyers advocate is a professionally qualified property consultant who acts solely buyer by sourcing suitable properties and representing the buyer throughout the buying process.

The buyer's agent is paid by the buyer. Buyer's Agents' need to be licensed and certified to act as a agent.

Stock and station agent

Stock and station agents usually operate in rural areas and often have a high profile in rural commu they sell, buy and exchange livestock, property and agricultural products on behalf of their clients.

Stock and station agents conduct auctions of property, livestock and chattels such as farm machine stock and station agents are also valuers.

Support staff

Receptionists and administrative personnel are among the most important contributors to a real est The role of the receptionist is very important, as it is the first point of contact for the agencys clients can vary considerably, however tasks usually include the following:

answering the telephone and handling enquiries face-to-face communication with clients receiving rents and providing receipts word processing.

In some offices, the receptionists position may be a training ground for progression into a sales or p management career.

Other staff may be employed to provide administrative support to a variety of departments within a agency. Depending upon the department, the role may include clerical duties, including the prepara legal documents, arranging advertising, word processing, database management and general acco duties.

Although there are no formal qualification requirements for these positions, most state and territory Estate Institutes conduct professional development courses specifically for real estate receptionists support staff. Valuer

Valuation is a profession closely related to real estate. A valuer determines the value of property ba market conditions at a given time. Valuations are used for a variety of purposes:

the calculation of land tax, municipal rates and stamp duties on property transfers and loans insurance compensation family law settlements assessing mortgages assessing the value of assets assessing rent for leases establishing the value of properties for sale.

Valuers in city or suburban locations usually value houses, vacant land sites, commercial and indus property, shopping centres and blocks of flats.

The valuers clients include banks, government departments, property developers, insurance comp building owners.

While it is not essential that a valuer have an estate agents licence, most obtain the licence in addit Bachelor of Business. Valuations are an important part of most property development projects.

Real estate broker

From Wikipedia, the free encyclopedia

This article is about the North American practice. For other definitions and practices in other countries, see Real estate. For real property, see Real property. "Realtor" redirects here. For the real estate industry trade association that refers to its members as "Realtors", see National Association of Realtors.

A real estate broker or real estate agent is a person who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to

buy.[citation needed][dubious discuss] In the United States, the relationship was originally established by reference to the English common law of agency, with the broker having a fiduciary relationship with his clients. Estate agent is the term used in the United Kingdom to describe a person or organization whose business is to market real estate on behalf of clients, but there are significant differences between the actions and liabilities of brokers and estate agents in each country. Beyond the United States, other countries take markedly different approaches to the marketing and selling of real property. In the United States, real estate brokers and their salespersons (commonly called "real estate agents" or, in some states, "brokers")[1] assist sellers in marketing their property and selling it for the highest possible price under the best terms. When acting as a buyer's agent with a signed agreement (or, in many cases, verbal agreement, although a broker may not be legally entitled to his commission unless the agreement is in writing), they assist buyers by helping them purchase property for the lowest possible price under the best terms. The real estate broker "broker" is obligated to provide fiduciary duties to whomever that broker services as client, this agency relationship can become very confusing; if the broker is helping both the buyer and seller, this is called dual agency. Traditionally, the broker represents the seller, and has a fiduciary duty to the seller. If the broker suggests to the buyer that he will help them negotiate the best price, then it is said the broker is practicing undisclosed dual agency, which is unethical and illegal in all states.[2] Under a dual agency transaction it is vital the broker discloses to either/or part whom they represent as client, and whom they represent as customer. A real estate broker owes his client fiduciary duties, those duties include care, confidentiality, loyalty, obedience,accounting & disclosure. A real estate broker owes his customer fair & honest dealing. A real estate broker must request all parties(seller & buyer)sign a dual agency agreement, to protect their license. In most jurisdictions in the United States, a person must have a license before they may receive remuneration for services rendered as a real estate broker. Unlicensed activity is illegal, but buyers and sellers acting as principals in the sale or purchase of real estate are not required to be licensed. In some states, lawyers are allowed to handle real estate sales for compensation without being licensed as brokers or agents.[citation needed]

Contents
[hide]

1 The difference between salespersons and brokers

o o o

1.1 Real estate education 1.2 Real estate salesperson (or, in some states, Real estate broker): 1.3 Real estate broker (or, in some states, qualifying broker):
[3] [3]

2 Agency relationships with clients versus non-agency relationships with customers

o o

2.1 Transaction brokers 2.2 Dual or limited agency

3 Types of services that a broker can provide 4 General

4.1 Services provided to both buyers and sellers

5 Real estate brokers and sellers

o o o

5.1 Services provided to seller as client 5.2 The "listing" contract 5.3 Brokerage commissions

o o

5.3.1 RESPA 5.3.2 Lockbox

5.4 Shared commissions with co-op brokers 5.5 Potential points of contention for agents

6 Real estate brokers and buyers

6.1 Services provided to buyers

7 The impact of globalization on real estate brokers' activities 8 Education 9 Organizations 10 Changing industry 11 See also 12 References

The difference between salespersons and brokers[edit]

Before the Multiple Listing Service (MLS) was introduced in 1967, when brokers (and their licensees) only represented sellers, the term "real estate salesperson" may have been more appropriate than it is today, given the various ways that brokers and licensees now help buyers through the process rather than merely "selling" them a property. Legally, however, the term "salesperson" is still used in many states to describe a real estate licensee.

Real estate education[edit]

To become licensed, most states require that an applicant take a minimum number of classes before taking the state licensing exam. Such education is often provided by real estate brokerages as a means to finding new agents. In many states, the real estate licensee (acting as an agent of a broker) must disclose to prospective buyers and sellers who represents whom. See below for a broker/licensee relationship to sellers and their relationship to buyers. While some people may refer to any licensed real estate agent as a real estate broker, a licensed real estate agent is a professional who has obtained a real estate broker's license. The licensee is one who has obtained a real estate license and is employed by a real estate broker. Often, licensee's refer to themselves

as an "agent", but the true agent is the broker and the licensee is a representative of the broker, often referred to as the real estate "salesperson." A real estate broker who works for another broker is referred to, sometimes, as a junior broker. In the United States, there are commonly two levels of real estate professionals licensed by the individual states, but not by the federal government:

Real estate salesperson (or, in some states, Real estate broker):[3][edit]

When a person first becomes licensed to become a real estate agent, they obtain a real estate salesperson's license (some states use the term, "broker") from the state in which they will practice. To obtain a real estate license, the candidate must take specific coursework (of between 40 and 90 hours) and pass a state exam on real estate law and practice. To work, salespersons must be associated with (and act under the authority of) a real estate broker. In Delaware for example, the licensing course requires the candidate to take 99 classroom hours in order to qualify to sit for the state and national examination. In each successive year thereafter, the license holder must participate in continuing education in order to remain abreast of state and national changes. Many states also have reciprocal agreements with other states, allowing a licensed individual from a qualified state to take the second state's exam without completing the course requirements, or, in some cases, take only a state law exam.

Real estate broker (or, in some states, qualifying broker):[3][edit]

After gaining some years of experience in real estate sales, a salesperson may decide to become licensed as a real estate broker (or Principal/qualifying broker) in order to own, manage or operate their own brokerage. In addition, some states allow college graduates to apply for a broker license without years of experience. College graduates fall into this category once they have completed the state required courses as well. California allows licensed attorneys to become brokers upon passing the broker exam, without having to take the requisite courses required of agent. Commonly more course work and a broker's state exam on real estate law must be passed. Upon obtaining a broker's license, a real estate agent may continue to work for another broker in a similar capacity as before (often referred to as a broker associate or associate broker) or take charge of his/her own brokerage and hire other salespersons (or broker) licensees. Becoming a branch office manager may or may not require a broker's license. Some states such as New York allow licensed attorneys to become real estate brokers without taking any exam. In some states, such as Colorado, there are no "salespeople", as all licensees are brokers. In the United States, a Realtor (capitalized) is a registered trademark of the National Association of Realtors (NAR). There are 1.3 million Realtors, mostly in the United States, and an additional 1 million licensed real estate agents who are not members of NAR and cannot use the trademark "realtor".[4] However, the U.S. Bureau of Labor Statistics claims only about 600,000 working brokers/salespersons.[5]

Agency relationships with clients versus non-agency relationships with customers[edit]

Relationship: Conventionally, the broker provides a conventional full-service, commission-based brokerage relationship under a signed listing agreement with a seller or "buyer representation" agreement with a buyer, thus creating under common law in most states an agency relationship with fiduciary obligations. The seller or buyer is then a client of the broker. Some states also have statutes that define and control the nature of the representation. Agency relationships in residential real estate transactions involve the legal representation by a real estate broker (on behalf of a real estate company) of the principal, whether that person or persons is a buyer or a seller. The broker (and his/her licensed real estate agents) then becomes the agent of the principal.

Non-agency relationship: where no written agreement nor fiduciary relationship exists, a real estate broker (and his agents) works with a principal who is then known as the broker's customer. When a buyer, who has not entered into a Buyer Agency agreement with the broker, buys a property, then that broker functions as the sub-agent of the seller's broker. When a seller chooses to work with a transaction broker, there is no agency relationship created.

Transaction brokers[edit]
Some state Real Estate Commissions, notably Florida's[6] after 1992 (and extended in 2003) and Colorado's[7] after 1994 (with changes in 2003), created the option of having no agency nor fiduciary relationship between brokers and sellers or buyers. Having no more than a facilitator relationship, transaction brokers assists buyers, sellers, or both during the transaction without representing the interests of either party who may then be regarded as customers. As noted by the South Broward Board of Realtors, Inc. in a letter to State of Florida legislative committees:[8] "The Transaction Broker crafts a transaction by bringing a willing buyer and a willing seller together and assists with the closing of details. The Transaction Broker is not a fiduciary of any party, but must abide by law as well as professional and ethical standards." (such as NAR Code of Ethics) The result was that in 2003, Florida created a system where the default brokerage relationship had "all licensees ... operating as transaction brokers, unless a single agent or no brokerage relationship is established, in writing, with the customer"[9][10] and the statute required written disclosure of the transaction brokerage relationship to the buyer or seller customer only through July 1, 2008. In both Florida[10] and Colorado's[7] case, dual agency and sub-agency (where both listing and selling agents represented the seller) no longer exist.

Dual or limited agency[edit]

Dual agency occurs when the same brokerage represents both the seller and the buyer under written agreements. Individual state laws vary and interpret dual agency rather differently. Many states no longer allow dual agency. Instead, "transaction brokerage" provides the buyer and seller with a limited form of representation, but without any fiduciary obligations (see Florida law). Buyers and sellers are generally advised to consult a licensed real estate professional for a written definition of an individual state's laws of agency, and many states require written Disclosures to be signed by all parties outlining the duties and obligations.

If state law allows for the same agent to represent both the buyer and the seller in a single transaction, the brokerage/agent is typically considered to be a Dual Agent. Special laws/rules often apply to dual agents, especially in negotiating price.

In some states, Dual Agency can be practiced in situations where the same brokerage (but not agent) represent both the buyer and the seller. If one agent from the brokerage has a home listed and another agent from that brokerage has a buyer-brokerage agreement with a buyer who wishes to buy the listed property, Dual Agency occurs by allowing each agent to be designated as "intra-company" agent. Only the broker himself is the Dual Agent.

Some states do allow a broker and one agent to represent both sides of the transaction as dual agents. In those situations, conflict of interest is more likely to occur, typically resulting in the loss of advocacy for both parties.

Types of services that a broker can provide[edit]

Since each province and state's laws may differ from others, it is generally advised that prospective sellers or buyers consult a licensed real estate professional. Some examples:

Comparative Market Analysis (CMA) an estimate of the home's value compared with others. This differs from an appraisal in that property currently for sale may be taken into consideration. (competition for the subject property)

Exposure Marketing the real property to prospective buyers. Facilitating a Purchase guiding a buyer through the process. Facilitating a Sale guiding a seller through the selling process. FSBO document preparation preparing necessary paperwork for "For Sale By Owner" sellers. Real estate appraisal but only, in most states, if the broker is also licensed as an appraiser. Home Selling Kits guides to how to market and sell a property. Hourly Consulting for a fee, based on the client's needs. Leasing for a fee or percentage of the gross lease value.

Property Management Exchanging property. Auctioning property. Preparing contracts and leases. (not in all states)

These services are also changing as a variety of real estate trends transform the industry.

General[edit]
This section possibly contains original research. Please improve it by verifying the claims made and adding inline citations. Statements consisting only of original research may be removed. (September 2012) This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (September 2012)

The sellers and buyers themselves are the principals in the sale, and real estate brokers (and the broker's agents) are their agents as defined in the law. However, although a real estate agent commonly fills out the real estate contract form, agents are typically not given power of attorney to sign the real estate contract or the deed; the principals sign these documents. The respective real estate agents may include their brokerages on the contract as the agents for each principal. The use of a real estate broker is not a requirement for the sale or conveyance of real estate or for obtaining a mortgage loan from a lender. However, once a broker is used, the settlement attorney (or party handling closing) will ensure that all parties involved be paid. Lenders typically have other requirements, though, for a loan.

Services provided to both buyers and sellers[edit]

In addition to the services to sellers and buyers described below, most real estate agents coordinate various aspects of the closing. Real estate brokers (and their agents) typically do not provide title service such as title search or title insurance, do not conduct surveys or formal appraisals of the property such as those required by lenders, and do not act as lawyers for the parties, although they may "coordinate" these activities with the appropriate specialists. Some real estate brokers may be associated with loan officers who may help to finance buyers to make their purchase. Real Estate Agents can provide buyer representation, seller representation, and sometimes dual agency representation (in some states). Regardless of whether a real estate agent assists sellers or buyers of real estate, negotiating skills and knowledge of financing options are important.

Real estate brokers and sellers[edit]

Services provided to seller as client[edit]
Upon signing a listing contract with the seller wishing to sell the real estate, the brokerage attempts to earn a commission by finding a buyer for the sellers' property for highest possible price on the best terms for the seller. In Canada, most provinces' laws require the real estate agent to forward all written offers to the seller for consideration or review. To help accomplish this goal of finding buyers, a real estate agency commonly does the following: [citation
needed]

Listing the property for sale to the public, often on an MLS, in addition to any other methods. Based on the law in several states, providing the seller with a real property condition disclosure form, and other forms that may be needed.

Preparing necessary papers describing the property for advertising, pamphlets, open houses, etc. Generally placing a "For Sale" sign on the property indicating how to contact the real estate office and agent.

Advertising the property. Advertising is often the biggest outside expense in listing a property. In some cases, holding an open house to show the property. Being a contact person available to answer any questions about the property and to schedule showing appointments

Ensuring buyers are prescreened so that they are financially qualified to buy the property; the more highly financially qualified the buyer is, the more likely the closing will succeed.

Negotiating price on behalf of the sellers. The seller's agent acts as a fiduciary for the seller. This may involve preparing a standard real estate purchase contract by filling in the blanks in the contract form.

In some cases, holding an earnest payment cheque in escrow from the buyer(s) until the closing. In many states, the closing is the meeting between the buyer and seller where the property is transferred and the title is conveyed by a deed. In other states, especially those in the West, closings take place during a defined escrow period when buyers and sellers each sign the appropriate papers transferring title, but do not meet each other.

The "listing" contract[edit]

Several types of listing contracts exist between broker and seller. These may be defined as:

Exclusive right to sell

In this type of agreement, the broker is given the exclusive right to market the property and represents the seller exclusively. This is referred to as seller agency. However, the brokerage also offers to co-

operate with other brokers and agrees to allow them to show the property to prospective buyers and offers a share of the total real estate commission.

Exclusive agency

An alternative form, "exclusive agency", allows only the broker the right to sell the property, and no offer of compensation is ever made to another broker. In that case, the property will never be entered into an MLS. Naturally, that limits the exposure of the property to only one agency.

Open listing

This is an agreement whereby the property is available for sale by any real estate professional who can advertise, show, or negotiate the sale. Whoever first brings an acceptable offer would receive compensation. Real estate companies will typically require that a written agreement for an open listing be signed by the seller to ensure the payment of a commission if a sale should take place. Although there can be other ways of doing business, a real estate brokerage usually earns its commission after the real estate broker and a seller enter into a listing contract and fulfill agreed-upon terms specified within that contract. The seller's real estate is then listed for sale, frequently with property data entered into an MLS in addition to any other ways of advertising or promoting the sale of the property. In most of North America, where brokers are members of a national association (such as NAR in the United States or the Canadian Real Estate Association), a listing agreement or contract between broker and seller must include the following: starting and ending dates of the agreement; the price at which the property will be offered for sale; the amount of compensation due to the broker and how much, if any, will be offered to a co-operating broker who may bring a buyer. Without an offer of compensation to a co-operating broker (co-op percentage or flat fee), the property may not be advertised in the MLS system. Net listings: Property listings at an agreed-upon net price that the seller wishes to receive with any excess going to the broker as commission are not legal in most, if not all, states.

Brokerage commissions[edit]
In consideration of the brokerage successfully finding a satisfactory buyer for the property, a broker anticipates receiving a commission for the services the brokerage has provided. Usually, the payment of a commission to the brokerage is contingent upon finding a satisfactory buyer for the real estate for sale, the successful negotiation of a purchase contract between a satisfactory buyer and seller, or the settlement of the transaction and the exchange of money between buyer and seller. The median real estate commission charged to the seller by the listing (seller's) agent is 6% of the purchase price. Typically, this commission is split evenly between the seller's and buyer's agents, with the buyer's agent generally receiving a commission of 3% of the purchase price of the home sold.

In North America commissions on real estate transactions are negotiable. Local real estate sales activity usually dictates the amount of commission agreed to. Real estate commission is typically paid by the seller at the closing of the transaction as detailed in the listing agreement.

RESPA[edit]
Real estate brokers who work with lenders may not receive any compensation from the lender for referring a residential client to a specific lender. To do so would be a violation of a United States federal law known as the Real Estate Settlement Procedures Act (RESPA). Commercial transactions are exempt from RESPA. All lender compensation to a broker must be disclosed to all parties. A commission may also be paid during negotiation of contract base on seller and agent.

Lockbox[edit]
With the sellers' permission, a lockbox is placed on homes that are occupied and, after arranging an appointment with the home owner, agents can show the home. When a property is vacant or where a seller may be living elsewhere, a lockbox will generally be placed on the front door. The listing broker helps arrange showings of the property by various real estate agents from all companies associated with the MLS. The lockbox contains the key to the door of the property and the box can only be opened by licensed real estate agents (often only with authorization from the listing brokerage), by using some sort of secret combination or code provided by the brokerage or the issuer of the lockbox.

Shared commissions with co-op brokers[edit]

If any buyer's broker (or any of his/her agents) brings the buyer for the property, the buyer's broker would typically be compensated with a co-op commission coming from the total offered to the listing broker, often about half of the full commission from the seller. If an agent or salesperson working for the buyer's broker brings the buyer for the property, then the buyer's broker would commonly compensate his agent with a fraction of the co-op commission, again as determined in a separate agreement. A discount brokerage may offer a reduced commission in the event no other brokerage firm is involved and no co-op commission is paid out. If there is no co-commission to pay to another brokerage, the listing brokerage receives the full amount of the commission minus any other types of expenses.

Potential points of contention for agents[edit]

Controversy exists around how commissions paid to real estate agents are disclosed to buyers and the effect additional seller incentives may have on the negotiation process and final purchase price. [11] If a listing agent sells a property above the listed price, they make additional income. In theory, this motivates them to get top dollar for the seller. However, if an agent representing a buyer obtains a lower sales price for their client, then they make a lower commission. Thus, it could be considered to be in the agent's best interest to advise his client to purchase the property at a higher price.

Another potential conflict of interest exists when a listing agent in a very active real estate market sells properties quickly at low prices to benefit from high sales volume.

Real estate brokers and buyers[edit]

This section possibly contains original research. Please improve it by verifying the claims made and adding inline citations. Statements consisting only of original research may be removed. (September 2012) This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (September 2012)

Services provided to buyers[edit]

Buyers as clients

With the increase in the practice of buyer brokerage in the United States, especially since the late 1990s in most states, agents (acting under their brokers) have been able to represent buyers in the transaction with a written "Buyer Agency Agreement" not unlike the "Listing Agreement" for sellers referred to above. In this case, buyers are clients of the brokerage. Some brokerages represent buyers only and are known as exclusive buyer agents (EBAs). Consumer Reports states, "You can find a true buyer's agent only at a firm that does not accept listings." [12] The advantages of using an Exclusive Buyer Agent is that they avoid conflicts of interest by working in the best interests of the buyer and not the seller, avoid homes and neighborhoods likely to fare poorly in the marketplace, ensure the buyer does not unknowingly overpay for a property, fully informs the buyer of adverse conditions, encourages the buyer to make offers based on true value instead of list price, which can sometimes be overstated, and works to save the buyer money. A buyer agency firm commissioned a study that found EBA purchased homes were seventeen times less likely to go into foreclosure.[citation needed] A real estate brokerage attempts to do the following for the buyers of real estate only when they represent the buyers with some form of written buyer-brokerage agreement:

Find real estate in accordance with the buyers needs, specifications, and cost. Takes buyers to and shows them properties available for sale. When deemed appropriate, prescreens buyers to ensure they are financially qualified to buy the properties shown (or uses a mortgage professional, such a bank's mortgage specialist or alternatively a Mortgage broker, to do that task).

Negotiates price and terms on behalf of the buyers and prepares standard real estate purchase contract by filling in the blanks in the contract form. The buyer's agent acts as a fiduciary for the buyer.

Due to the importance of the role of representing buyers' interests, many brokers who seek to play the role of client advocate are now seeking out the services of Certified Mortgage Planners, industry experts that work in concert with Certified Financial Planners to align consumers' home finance positions with their larger financial portfolio(s).

Buyers as customers

In most states, until the 1990s, buyers who worked with an agent of a real estate broker in finding a house were customers of the brokerage, since the broker represented only sellers. Today, state laws differ. Buyers and/or sellers may be represented. Typically, a written "Buyer Brokerage" agreement is required for the buyer to have representation (regardless of which party is paying the commission), although by his/her actions, an agent can create representation.

Find real estate in accordance with the buyers' needs, specifications, and affordability. Take buyers to and shows them properties available for sale. When deemed appropriate, prescreen buyers to ensure they are financially qualified to buy the properties shown (or uses a mortgage professional to do that task).

Assist the buyer in making an offer for the property.

The impact of globalization on real estate brokers' activities[edit]

This section is written like a personal reflection or opinion essay rather than an encyclopedic description of the subject. Pleasehelp improve it by rewriting it in an encyclopedic style. (September 2012) This section possibly contains original research. Please improve it by verifying the claims made and adding inline citations. Statements consisting only of original research may be removed. (September 2012) This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (September 2012)

Globalization has had an immediate and powerful impact on real estate markets, making them an international working place. The rapid growth of the Internet has made the international market accessible to millions of consumers. A look at recent changes in homeownership rates illustrates this. Minority homeownership jumped by 4.4 million during the 1990s, reaching 12.5 million in 2000, according to the Fannie Mae Foundation. Foreign direct investment in U.S. real estate has increased sharply from $38 billion in 1997 more than $50 billion in 2002 according to U.S. 2000 Census data. Most local real estate agents view the foreign market as a significant revenue potential and may have already worked with international clients in their local market, new immigrants or more sophisticated

investors from different cultures and from other countries. For example, they provide value-added services that help overseas relocation employees figure out which inoculations their children need and how to register a car in the United States. Real estate brokers want to keep central to the transaction, protect the best interests of their members and address the unique needs of each multicultural global client by acquiring specialized training and designations. (See below for more) In 2007 the Mexican Association of Real Estate Professionals in Mexico, AMPI, and the NAR, National Association of Realtors in the United States, signed a bilateral contract for international real estate business cooperation. Also at the local level, many other state and local associations are helping other countries achieve the same result. For instance, in New Mexico, a historically multicultural state, under the RANM, Realtor Association of New Mexico and the President's Advisory Council, is looking into forming an ambassador association to help a foreign country into signing a bilateral agreement with the NAR. In New Mexico, there are 4500 licensed real estate professionals and only 14 or 15 CIPS designees, out of whom, only six speak a language other than English. A "Management Guide For Real Estate Associations" exists, which is a publication of the International Real Property Foundation (IRPF), which was funded by the National Association of Realtors (NAR) and the Reaume Foundation.The IRPF, in its Web site, regarding The Caux Round Table (CRT) principles, states that: "Ethical perceptions and international business is highly influenced by cultural differences. Because of cultural and ethical relativism, real estate business that is conducted across national boundaries may discover ethical conflicts. Major ethical issues that complicate international business activities include sexual and racial discrimination, price discrimination, bribery, harmful products, and telecommunications (enforcement of country-specific laws, copyrights, and questionable financial activities). A good document for reference in developing an association Code of Ethics in conjunction with such principles is "The Caux Round Table Business Principles of Ethics" (1995) (www.cauxroundtable.org). Because of the particularities and the nature of international transactions between real estate agents of different countries, the Real Estate Code of Ethics of each country are excellent to regulate the ethics of each member in its own jurisdiction, but in the case of complex international real estate transactions were sometimes ethical conflicts arise, there is a need to have a group of principles more adjusted to international transactions were two or more real estate agents of different countries participate in real estate brokerage businesses. For example, in the NAR-FECEPAC memorandum of understanding of February 2003, a commitment was set to promote and adopt the respective code of ethics,standards and norms, but there is nothing specific mentioned for complex ethical matters in international transactions. There was surely a commitment to cooperate with a foreign agent to work in local markets different from the foreign agents market. As an example, it can be noticed that the NARCSBR Bilateral Cooperation Agreement of November 12, 2001 also created a commitment to promote and enforce mutually acceptable codes of ethics (Code of Ethics meaning those that been promulgated by the cooperating associations for use in their respective countries, each of which is

acknowledged to be acceptable to the other). Again, as the IRPF says "Ethical perceptions and international business is highly influenced by cultural differences. Because of cultural and ethical relativism, real estate business that is conducted across national boundaries may discover ethical conflicts". There is also nothing specific mentioned for complex ethical matters in international transactions, whilst the agreements do provide to seek to facilitate business opportunities for members of the cooperating associations who may be working in each others markets, and also initiating and hosting trade missions. The bilateral agreement between NAR and CSBR also states that both parties agree to enforce their respective codes and advice the other of subsequent modifications to its code of ethics. Some association members of Central American Real Estate Associations who are practicing agents and are involved in real life transactions on a daily basis have expressed their concern in the sense that at the moment of ethical conflicts with foreign colleagues, they have not had at hand any practical instrument that can serve to resolve ethical conflicts (even though agreements that make reference to code of ethics do exist). Because the Caux Round Table principles are designed by corporate leaders and provide a model of how a good corporate citizen behaves in the countries and markets where it penetrates being a foreign entity, this principles could serve to reduce the fear of local brokers to foreign competition, provide an ethical framework against asymmetry of participants in free trade of services in our industry, and will permit that Central American association members that see an advantage in opening their country markets to competition, and that see advantages in having foreign strategic partners to work our their own local markets (e.g.: local Central American brokers partnering with United States brokers to work Central American Markets), keep promoting competition, globalization of business, and free trade of services.

Education[edit]
A person may attend a pre-license course lasting 60 hours and then be tested by the state for a real estate agent's license. Upon passing, the new licensee must place their license with an established real estate firm, managed by a broker. Requirements vary by state but after some period of time working as an agent, one may return to the classroom and test to become a broker. For example, California and Florida require you to have a minimum experience of two years as a full-time licensed agent within the prior 5 years.[13] Where as Indiana only requires one year experience as a real estate salesperson and Arizona requires three out of the prior five years.
[14] [15]

Brokers may manage or own

firms. Each branch office of a larger real estate firm must be managed by a broker. States issue licenses for a multi year period and require real estate agents and brokers to complete continuing education prior to renewing their licenses. Many states recognize licenses from other states and issue licenses upon request to existing agents and firms upon request without additional education or testing however the license must be granted before real estate service is provided in the state.

California does not have license reciprocity with other states. An applicant for licensure is not, however, required to be a resident of California to obtain a license.[16]

Organizations[edit]
Several notable groups exist to promote the industry and to assist members who are in it. The National Association of Realtors (NAR) is the largest real estate organization and one of the largest trade groups anywhere. Their membership exceeds one million. NAR also has state chapters as well as thousands of local chapters. Upon joining a local chapter, a new member is automatically enrolled into the state and national organizations. When the principals of a firm join, all licensed agents in that firm must also belong. An advantage of membership is access to the local MLS (sometimes county-wide, sometimes broader in coverage) which exists for the benefit of members and which provides access following the payment of additional dues to the local system. The Realtor Political Action Committee (RPAC) is a separate entity, and also the lobbying arm of NAR. In 2005, they were considered the largest PAC in the United States. According to realtor.org, RPAC is the largest contributor of direct contributions to federal candidates. The National Association of Exclusive Buyer Agents is a group of agents and brokers who work in firms that represent buyers only. They assist in locating exclusive buyer agents for home buyers through the Web site www.naeba.org. The National Association of Real Estate Brokers (NAREB) was founded in 1947 as an alternative for African Americans who were excluded from the dominant NAR. Both groups allow members to join without regard to race. However, NAREB has historically been an African American-centric group with a focus on developing housing resources for intercity populations.

Changing industry[edit]
This section possibly contains original research. Please improve it by verifying the claims made and adding inline citations. Statements consisting only of original research may be removed. (September 2012) This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (September 2012)

Compensation is conventionally based on a percentage of the sales price, split between the buying and selling brokers, and then between the agent(s) and his/her real estate agency. While a split based on the percentage received by the broker is generally normal, in some brokerages agents may pay a monthly "desk fee" for office costs, monthly fee, etc., and then retain 100% of the commission received.

Buying Centers
A buying center is a group of people within an organization who make business purchase decisions.
SmartNotes

1.

fig. 1

Chairman of Hong Kong Stock Exchange

The chairman of the Hong Kong Stock Exchange is an example of a member in an organization responsible for finalizing major purchase decisions.

Get the Boundless Marketing study guide

Access the entire study guide, plus flashcards and quizzes.

Get instant access

KEY POINTS

In a business setting, major purchases typically require input from various parts of the organization, such as finance, accounting, purchasing, information technology management, and senior management. The five main roles in a buying center are the users, influencers, buyers, deciders, and gatekeepers. In a generic situation, one could also consider the roles of the initiator of the buyingprocess (who is not always the user) and the end users of the item being purchased.
TERMS

Buying Center

A group of employees, family members, or members of any type of organization responsible for finalizing major purchase decisions.
EXAMPLES

The stock market is an example of a buying center. A stock market is a public entity (a loose network of economic transactions, not a physical facility or discrete entity) for the trading of company stock (shares) and derivatives at an agreed price (Figure 1). Many people are involved in the daily transactions and the purchase decisions both on the buying side and the selling side. Stock markets allow businesses to be publicly traded, or raise additional financial capital for expansion by selling shares of ownership of the company in a public market. Major purchases of stock typically require input from various parts of the organization, such as finance, accounting, and senior management.

Decision Making UnitsBuying Situations

Rate these SmartNotes: Full text Buying Centers

A buying center is a group of employees, family members, or members of any type of organization responsible for finalizing major purchase decisions. In a business setting, major purchases typically require input from various parts of the organization, such as finance, accounting, purchasing, information technology management, and senior management. Highly technical purchases, such as information systems or production equipment, also require the expertise of technical specialists. In some cases the buying center is an informal ad hoc group, but in other cases, it is a formally sanctioned group with specific mandates, criteria, and procedures. The employees that constitute the buying center will vary depending on the item being purchased. In a generic sense, there are typically six roles within buying centers. These roles include:
1. Initiators who suggest purchasing a product or service 2. Influencers who try to affect the outcome decision with their opinions 3. Deciders who have the final decision 4. Buyers who are responsible for the contract 5. End users of the item being purchased 6. Gatekeepers who control the flow of information

Because of the specialized nature of computer and software purchases, many corporations use buying centers that are specialized for information technology acquisition. These specialized buying centers typically receive information about the technology from commercial sources, peers, publications, and experience. In this process, top management, the IT director, IT professionals, and other users collaborate to find a solution. A better buying center for marketing might include:
1. Users - The users will be the ones to use the product, initiate the purchase process, generate purchase specs, and evaluate product performance after the purchase. 2. Influencers - The influencers are the tech personnel who help develop specs and evaluate alternate products. They are important when products involve new and advanced technology. 3. Deciders - Deciders choose the products. 4. Buyers - Buyers select suppliers and negotiate the terms of purchase. 5. Gatekeepers - Gatekeepers are typically secretaries and tech personnel. They control the flow of information to and among others within the buying center. Buyers who deal directly with a vendor are gatekeepers.
Decision Making UnitsBuying Situations
Rate this content:

Get the Boundless Marketing study guide

Access the entire study guide, plus flashcards and quizzes.

Get instant access

Key Term Glossary

Buying Center:

A group of employees, family members, or members of any type of organization responsible for finalizing major purchase decisions.
APPEARS IN THESE RELATED CONCEPTS:

Influences on Business Buying Buying Centers

Gatekeepers:

Upper management responsible for plan review for rule and regulation compliance. 
APPEARS IN THIS RELATED CONCEPT:

The Marketing Plan

generic:

Not having a brand name.

APPEARS IN THIS RELATED CONCEPT:

Nonprice Competition

Marketing:

The process of communicating the value of a product or service to customers.

APPEARS IN THIS RELATED CONCEPT:

The Purposes of Packaging

process:

in reference to capabilities, a process is how the capability is executed.

APPEARS IN THIS RELATED CONCEPT:

Company Capabilities

product:

Any tangible or intangible good or service that is a result of a process and that is intended for delivery to a customer or end user.

APPEARS IN THIS RELATED CONCEPT:

What is a Product?

Product:

Anything, either tangible or intangible, offered by the firm as a solution to the needs and wants of the consumer; something that is profitable or potentially profitable; goods or a service that meets the requirements of the various governing offices or society. 
APPEARS IN THIS RELATED CONCEPT:

Products, Placement, Promotion & Price

Service:

Action or work that is produced, then traded, bought or sold, and then finally consumed.