The Critical Role of REALTORS® in the Real
Estate Transaction
Surveys show that many homeowners and homebuyers are not
aware of the true value a REALTOR® provides during the course of a real
estate transaction. At the same time, regrettably, REALTORS® have
generally assumed that the expertise, professional knowledge and just
plain hard work that go into bringing about a successful transaction
were understood and appreciated.
Many of the most important services and steps are
performed behind the scenes by either the REALTOR® or the brokerage
staff and traditionally have been viewed simply as part of their
professional responsibilities to the client. But, without them, the
transaction could be placed in jeopardy. This publication seeks to
close that gap.
Listed on the following pages are nearly 200 typical
actions, research steps, processes and review stages necessary for a
successful residential real estate transaction and normally provided by
a full service real estate brokerage and for which they are
entitled to fair compensation.
Comprehensiveness
The list is by no means an attempt to set forth a complete
list of services as these may vary within each brokerage and each
market. Many REALTORS® routinely provide a wide variety of additional
services that are as varied as the nature of each transaction. By
the same token, some transactions may not require some of these steps to
be equally successful.
However, most would agree that given the unexpected
complications that can arise, it’s far better to know about a step and
make an intelligent, informed decision to skip it, than to not know the
possibility even existed.
The REALTOR® Commitment
Through it all, the personal and professional commitment of the
REALTOR® is to ensure that a seller and buyer are brought together in an
agreement that provides each with a “win” that is fair and equitable.
The motivation is easy to understand. For most full-service brokerages,
they receive no compensation unless and until the sale closes.
By contrast, there are firms that offer “limited
services” in exchange for an up-front flat fee, or perhaps offer a menu
of pay-as-you-go or “a la’ carte” options. Some even offer a sliding
scale ranging from limited to full service. In these cases, the
compensation of the REALTOR® is based on these reduced service levels
with the seller bearing full responsibility for all the other steps and
procedures in the selling process. In short, the marketplace truism is
that “you get what you pay for”
A Variety of Choices
The variety of brokerage business models in today’s real
estate industry affords the homeowner a greater range of options than
ever before. But no matter which option is chosen, before signing
a Listing Agreement or otherwise engaging the services of a REALTOR® and
agreeing to compensate them, homeowners should understand exactly what
services will, or will not, be provided.
Why Use A REALTOR®?
Not every real estate agent or broker is a REALTOR®. That
term and the familiar Block “R” logo are trademarked by the National
Association of REALTORS® and can only be used by those are REALTOR®
members through their local association of REALTORS®. While all
REALTORS® are state-issued licensees as agents or brokers, the major
difference between a “real estate licensee” and a REALTOR® is that
REALTORS® have taken an oath to subscribe to a stringent, enforceable
Code of Ethics with Standards of Practice that promote the fair, ethical
and honest treatment of all parties in a transaction. Non-member
licensees have taken no such oath and are not morally bound to the
ethical practices and principles set for in the REALTOR® Code.
For that extra measure of peace of mind, ensure the individual
seeking to represent you is both a real estate licensee and a REALTOR®.
Visit the Colorado Association of REALTORS® Association’s website,
http://www.coloradorealtors.com for a
searchable list of our REALTOR® members.
The Critical Role of the REALTOR®
Listed here are nearly 200 typical actions, research steps,
procedures, processes and review stages in a successful residential real
estate transaction that are normally provided by full-service
real estate brokerages in return for their sales commission. Depending
on the transaction, some may take minutes, hours, or even days to
complete, while some may not be needed.
More importantly, they reflect the level of skill,
knowledge and attention to detail required in today’s real estate
transaction, underscoring the importance of having help and guidance
from someone who fully understands the process – a REALTOR®. And
never forget that REALTORS® are pledged to uphold the stringent,
enforceable tenets of the REALTOR® Code of Ethics in their professional
dealings with the public. Not every real estate licensee holds REALTOR®
membership. Make sure yours does!
Pre-Listing Activities
1 Make appointment with seller for listing presentation
2 Send seller a written or e-mail confirmation of
listing appointment and call to confirm
3 Review pre-appointment questions
4 Research all comparable currently listed properties
5 Research sales activity for past 18 months from MLS
and public records databases
6 Research "Average Days on Market" for this property of
this type, price range and location
7 Download and review property tax roll information
8 Prepare "Comparable Market Analysis" (CMA) to
establish fair market value
9 Obtain copy of subdivision plat/complex lay-out
10 Research property's ownership & deed type
11 Research property's public record information for lot
size & dimensions
12 Research and verify legal description
13 Research property's land use coding and deed
restrictions
14 Research property's current use and zoning
15 Verify legal names of owner(s) in county's public
property records
16 Prepare listing presentation package with above
materials
17 Perform exterior "Curb Appeal Assessment" of subject
property
18 Compile and assemble formal file on property
19 Confirm current public schools and explain impact of
schools on market value
20 Review listing appointment checklist to ensure all
steps and actions have been completed
Listing Appointment
Presentation
21 Give seller an overview of current market conditions
and projections
22 Review agent's and company's credentials and
accomplishments in the market
23 Present company's profile and position or "niche" in
the marketplace
24 Present CMA Results To Seller, including Comparables,
Solds, Current Listings & Expireds
25 Offer pricing strategy based on professional judgment
and interpretation of current market conditions
26 Discuss Goals With Seller To Market Effectively
27 Explain market power and benefits of Multiple Listing
Service
28 Explain market power of web marketing, IDX and
REALTOR.com
29 Explain the work the brokerage and agent do "behind
the scenes" and agent's availability on weekends
30 Explain agent's role in taking calls to screen for
qualified buyers and protect seller from curiosity seekers
31 Present and discuss strategic master marketing plan
32 Explain different agency relationships and determine
seller's preference
33 Review and explain all clauses in Listing Contract &
Addendum and obtain seller's signature
Once Property is Under Listing
Agreement
34 Review current title information
35 Measure overall and heated square footage
36 Measure interior room sizes
37 Confirm lot size via owner's copy of certified
survey, if available
38 Note any and all unrecorded property lines,
agreements, easements
39 Obtain house plans, if applicable and available
40 Review house plans and make copy
41 Order plat map for retention in property's listing
file
42 Prepare showing instructions for buyers' agents and
agree on showing time window with seller
43 Obtain current mortgage loan(s) information:
companies and & loan account numbers
44 Verify current loan information with lender(s)
45 Check assumability of loan(s) and any special
requirements
46 Discuss possible buyer financing alternatives and
options with seller
47 Review current appraisal if available
48 Identify Home Owner Association manager if applicable
49 Verify Home Owner Association Fees with manager -
mandatory or optional and current annual fee
50 Order copy of Homeowner Association bylaws, if
applicable
51 Research electricity availability and supplier's name
and phone number
52 Calculate average utility usage from last 12 months
of bills
53 Research and verify city sewer/septic tank system
54 Water System: Calculate average water fees or rates
from last 12 months of bills )
55 Well Water: Confirm well status, depth and output
from Well Report
56 Natural Gas: Research/verify availability and
supplier's name and phone number
57 Verify security system, current term of service and
whether owned or leased
58 Verify if seller has transferable Termite Bond
59 Ascertain need for lead-based paint disclosure
60 Prepare detailed list of property amenities and
assess market impact
61 Prepare detailed list of property's "Inclusions &
Conveyances with Sale"
62 Compile list of completed repairs and maintenance
items
63 Send "Vacancy Checklist" to seller if property is
vacant
64 Explain benefits of Home Owner Warranty to seller
65 Assist sellers with completion and submission of Home
Owner Warranty Application
66 When received, place Home Owner Warranty in property
file for conveyance at time of sale
67 Have extra key made for lockbox
68 Verify if property has rental units involved. And if
so:
69 Make copies of all leases for retention in listing
file
70 Verify all rents & deposits
71 Inform tenants of listing and discuss how showings
will be handled
72 Arrange for installation of yard sign
73 Assist seller with completion of Seller's Disclosure
form
74 "New Listing Checklist" Completed
75 Review results of Curb Appeal Assessment with seller
and provide suggestions to improve salability
76 Review results of Interior Décor Assessment and
suggest changes to shorten time on market
77 Load listing into transaction management software
program
Entering Property in Multiple
Listing Service Database
78 Prepare MLS Profile Sheet -- Agents is responsible for
"quality control" and accuracy of listing data
79 Enter property data from Profile Sheet into MLS
Listing Database
80 Proofread MLS database listing for accuracy -
including proper placement in mapping function
81 Add property to company's Active Listings list
82 Provide seller with signed copies of Listing
Agreement and MLS Profile Sheet Data Form within 48 hours
83 Take additional photos
for upload into MLS and use in flyers. Discuss efficacy of panoramic
photography
Marketing The Listing
84 Create print and Internet ads with seller's input
85 Coordinate showings with owners, tenants, and other
Realtors®. Return all calls - weekends included
86 Install electronic lock box if authorized by owner.
Program with agreed-upon showing time windows
87 Prepare mailing and contact list
88 Generate mail-merge letters to contact list
89 Order “Just Listed” labels & reports
90 Prepare flyers & feedback faxes
91 Review comparable MLS listings regularly to ensure
property remains competitive in price, terms, conditions and
availability
92 Prepare property marketing brochure for seller's
review
93 Arrange for printing or copying of supply of
marketing brochures or fliers
94 Place marketing brochures in all company agent mail
boxes
95 Upload listing to company and agent Internet site, if
applicable
96 Mail Out "Just Listed" notice to all neighborhood
residents
97 Advise Network Referral Program of listing
98 Provide marketing data to buyers coming through
international relocation networks
99 Provide marketing data to buyers coming from referral
network
100 Provide "Special Feature" cards for marketing, if
applicable
101 Submit ads to company's participating Internet real
estate sites
102 Price changes conveyed promptly to all Internet
groups
103 Reprint/supply brochures promptly as needed
104 Loan information reviewed and updated in MLS as
required
105 Feedback e-mails/faxes sent to buyers' agents after
showings
106 Review weekly Market Study
107 Discuss feedback from showing agents with seller to
determine if changes will accelerate the sale
108 Place regular weekly update calls to seller to
discuss marketing & pricing
109 Promptly enter price changes in MLS listing database
The Offer and Contract
109 Receive and review all Offer to Purchase contracts
submitted by buyers or buyers' agents.
110 Evaluate offer(s) and prepare a "net sheet" on each
for the owner for comparison purposes
111 Counsel seller on offers. Explain merits and
weakness of each component of each offer
112 Contact buyers' agents to review buyer's
qualifications and discuss offer
113 Fax/deliver Seller's Disclosure to buyer's agent or
buyer upon request and prior to offer if possible
114 Confirm buyer is pre-qualified by calling Loan
Officer
115 Obtain pre-qualification letter on buyer from Loan
Officer
116 Negotiate all offers on seller's behalf, setting
time limit for loan approval and closing date
117 Prepare and convey any counteroffers, acceptance or
amendments to buyer's agent
118 Fax copies of contract and all addendums to closing
attorney or title company
119 When Offer to Purchase Contract is accepted and
signed by seller, deliver to buyer's agent
120 Record and promptly deposit buyer's earnest money in
escrow account.
121 Disseminate "Under-Contract Showing Restrictions" as
seller requests
122 Deliver copies of fully signed Offer to Purchase
contract to seller
123 Fax/deliver copies of Offer to Purchase contract to
Selling Agent
133 Fax copies of Offer to Purchase contract to lender
124 Provide copies of signed Offer to Purchase contract
for office file
125 Advise seller in handling additional offers to
purchase submitted between contract and closing
126 Change status in MLS to "Sale Pending"
127 Update transaction management program to show "Sale
Pending"
128 Review buyer's credit report results -- Advise
seller of worst and best case scenarios
129 Provide credit report information to seller if
property will be seller-financed
130 Assist buyer with obtaining financing, if applicable
and follow-up as necessary
131 Coordinate with lender on Discount Points being
locked in with dates
132 Deliver unrecorded property information to buyer
133 Order septic system inspection, if applicable
134 Receive and review septic system report and assess
any possible impact on sale
135 Deliver copy of septic system inspection report
lender & buyer
136 Deliver Well Flow Test Report copies to lender &
buyer and property listing file
137 Verify termite inspection ordered
138 Verify mold inspection ordered, if required
Tracking the Loan Process
139 Confirm Verifications Of Deposit & Buyer's Employment
Have Been Returned
140 Follow Loan Processing Through To The Underwriter
141 Add lender and other vendors to transaction
management program so agents, buyer and seller can track progress of
sale
142 Contact lender weekly to ensure processing is on
track
143 Relay final approval of buyer's loan application to
seller
Home Inspection
144 Coordinate buyer's professional home inspection with
seller
145 Review home inspector's report
146 Enter completion into transaction management
tracking software program
147 Explain seller's responsibilities with respect to
loan limits and interpret any clauses in the contract
148 Ensure seller's compliance with Home Inspection
Clause requirements
149 Recommend or assist seller with identifying and
negotiating with trustworthy contractors to performn any required
repairs
150 Negotiate payment and oversee completion of all
required repairs on seller's behalf, if needed
The Appraisal
151 Schedule Appraisal
154 Provide comparable sales used in market pricing to
Appraiser
152 Follow-Up On Appraisal
151 Enter completion into transaction management program
153 Assist seller in questioning appraisal report if it
seems too low
Closing Preparations and Duties
154 Contract Is Signed By All Parties
155 Coordinate closing process with buyer's agent and
lender
156 Update closing forms & files
157 Ensure all parties have all forms and information
needed to close the sale
158 Select location where closing will be held
159 Confirm closing date and time and notify all parties
160 Assist in solving any title problems (boundary
disputes, easements, etc) or in obtaining Death Certificates
161 Work with buyer's agent in scheduling and conducting
buyer's Final Walk-Thru prior to closing
172 Research all tax, HOA, utility and other applicable
prorations
162 Request final closing figures from closing agent
(attorney or title company)
163 Receive & carefully review closing figures to ensure
accuracy of preparation
164 Forward verified closing figures to buyer's agent
165 Request copy of closing documents from closing agent
166 Confirm buyer and buyer's agent have received title
insurance commitment
167 Provide "Home Owners Warranty" for availability at
closing
168 Review all closing documents carefully for errors
169 Forward closing documents to absentee seller as
requested
170 Review documents with closing agent (attorney)
171 Provide earnest money deposit check from escrow
account to closing agent
173 Coordinate this closing with seller's next purchase
and resolve any timing problems
174 Have a "no surprises" closing so that seller
receives a net proceeds check at closing
175 Refer sellers to one of the best agents at their
destination, if applicable
176 Change MLS status to Sold. Enter sale date, price,
selling broker and agent's ID numbers, etc.
177 Close out listing in transaction management program
Follow Up After Closing
178 Answer questions about filing claims with Home Owner
Warranty company if requested
179 Attempt to clarify and resolve any conflicts about
repairs if buyer is not satisfied
180 Respond to any follow-on calls and provide any
additional information required from office files.
