The competition for so few homes is leading some buyers to throw caution to the wind.
What is a Realtor?
A Realtor is a salesperson licensed to sell real estate but differs from a real estate agent in some ways. A Realtor is a member of the National Association of Realtors and is held to a higher ethical standard than real estate agents, specifically known as the Realtors Code of Ethics.
A real estate agent, although state-licensed to sell property, is not automatically a member of the National Association of Realtors. Also, real estate agents do not have to abide by the strict Realtor Code of Ethics.
All real estate agents sell on behalf of their brokers, who typically act as managers and run their own real estate agencies. Realtors can be either agents or brokers.
The code of ethics contains 17 articles which Realtors must strictly follow. The code differs greatly from the state guidelines that real estate agents who are not a part of the National Association of Realtors must follow.
Elements of the code include:
- Putting the interests of the buyer above their own.
- Refraining from exaggerating, misrepresenting or concealing facts.
- Cooperating with other brokers and agents when it is in the best interest to do so.
- Refraining from providing professional services with concealed interests.
- Refraining from collecting any commissions without the knowledge of sellers.
- Refraining from commingling the funds of clients with their own.
- Ensuring that all written documents are truthful and easy to understand.
- Engaging in truthful advertising.
- Refraining from bad-mouthing competitors.
The most common misconception about Realtors is that they work few hours and earn large sums of money. According to Realtor.com, “nothing could be further from the truth.”
On average, buyers will spend around 12 weeks with a Realtor when searching for properties. In those 12 weeks, they will look at about 10 different properties before choosing one to buy.
After that, it takes about 30 days for the deal to close, and the Realtor is only paid once that happens. Regardless of the time, energy and effort put into the search, if the buyer signs another lease or does not buy at all, the Realtor receives nothing.
In 2014, the average first-year real estate agent made $33,000, according to the Houston Chronicle website. The average cut that a real estate agent receives per sale is about 3 percent of the house’s price, but that percentage varies, depending on the broker for which the agent works.
Since the real estate business is commission-only, all agents must pay a portion of their earnings to their brokers. Most customers believe that their agents walk away with the entire commission check, which is not true.
Agents also are responsible for paying their own federal and state income taxes, Social Security tax and health insurance.
Do you know how to find a real estate agent? Here are some tips from Bankrate.com.