Real Estate has changed
quite a bit since I began selling in 1980. The purchase and sale agreement was
one page, the print was small, the document two sided. The interest rates were
about 21%. Not many people bought things with bank loans, so there was quite
a bit of "creative" financing. This added a paragraph or so to the documents.
It took about a day to
become a real estate agent in 1980. A test was to be taken, and it cost $25.
The cost of doing business was about $500 per month.
Now, it's 2007. Real estate
agreements are a minimum of 20 pages, including addenda covering the specifics
of financing, inspections, agency, and seller disclosure, now required by Washington
State law. The interest rates are around 7% +/- for a thirty year fixed rate
mortgage. The finance addendum is 2 long pages of fine print, covering all
aspects of obtaining the loan, appraisal, work orders, closing and earnest
money. It takes $250 to renew my broker's license and there are requirements for continuing
education. It now costs around $3,000 to $5,000 a month to run my business.
Some Sellers think Realtors®
find the right buyer for their home; buyers think we find the home to buy, and
this is where our value lies. Not true. I know the true value lies in advice
on the proper way to stage a home, market it, and most importantly, negotiate
all the details of the purchase and sale agreement, and then keep that agreement
together through closing.
How do agents get paid?
Typically the sellers pay the fee. Also, typically, the agent is paid at
closing, a percentage fee based on the selling price of the property. For some
specific tasks, such as consulting or market appraisals, some agents charge a per hour
or flat fee, with a retainer fee paid up front.
A good agent can save
you thousands of dollars if you are buying and/or make you thousands if you're
selling, so it pays to choose your
agent wisely. I recommend interviewing three agents before selecting one. Choose
one you think is knowledgeable and with whom you will get along during the
extensive process of buying or selling. Remember, these things take time, sometimes
months, to put together all the details and finalize everything. You need to
be able to communicate well with your agent if it's going to be a great experience.
I wish you the best on
your buying or selling journey.
