What is the Difference Between a Real Estate Agent and a Realtor?
All Realtors are Real Estate agents, but not all agents are Realtors. Agents are licensed by the state of Florida and have met all the official requirements established by the state. Realtors have joined a trade organization and agreed to be governed by their rules of conduct – including professional and business standards. It is the Realtor trade organization that created the Multiple Listing Service (MLS) that helps agents sell homes.
In Florida, Real Estate agents can only be paid by their broker of record and are prohibited from accepting gifts or payments from anyone other than the broker. Florida agents are considered transaction brokers under state law. This means that they can represent both the buyer and the seller in the transaction at the same time. Even as a transaction brokers, they are still required to provide limited confidentiality, deal honestly and fairly, account for all money, and use care, skill and diligence during the Real Estate process.
What is the Realtors Code of Ethics?
The National Association of Realtors maintains the code of ethics for members. The code can be found here: https://www.nar.realtor/about-nar/governing-documents/code-of-ethics/2021-code-of-ethics-standards-of-practice
Do You Need to Hire a Realtor to Buy a Home?
This is a really good FAQs about Realtors. It is not required to have a Realtor working on your behalf. Most buyers, even experienced buyers, will hire a broker they trust to guide them through the process. When professors have studied the impact a professional sales agent has on the outcome of home sales, they have found that experience matters. Agents with at least5 years of experience negotiating contract have happier buyers, and better outcomes. Not all agents are equal, a bad agent can cost you time and money. Hire a quality agent to help you and chances are, you will not regret it.
Do You Need to Hire a Realtor to Sell a Home?
No, but more than 94% of homes sold involve a Realtor on one side or the other. If you do not have experience with contract law, negotiations, and marketing, then hiring an experienced Realtor would likely be in your best interests. Studies have shown that Realtors sell it for more on average, faster, and with less likelihood of ending up in court defending your decisions. Yes, you can absolutely sell on your own, but why go through all that work, headache and heartache to earn the same amount at the closing table?
Can I Represent Myself When Buying / Selling a Home?
Sure, but why would you want to? Most of the time in Tallahassee (like 99.5% of the time), the buyer’s agent is paid by the seller. (Technically here, the buyer’s agent is paid by their broker. Their broker is paid by the sellers’ agent’s broker per the listing agreement signed by the seller and the agents/broker. Under Florida law, an agent can ONLY be paid by their broker for Real Estate related activities. Kickbacks from lenders, inspectors, surveyors, etc. are illegal. Essentially, the seller is paying your agent to help guide you through this process. When professionals are involved, the chances of getting to the closing table are much higher. In some areas, buyers are expected to compensate their own agent. That percentage can be negotiated and is usually between 2.5% to 3% of the purchase price. There are locations in Tallahassee where it is standard practice for the seller to provide a significant remodeling concession. This is not information that a typical buyer would have access to, it is not information the seller’s agent is required to provide, and the lack of this knowledge may lead the buyer to leaving thousands of dollars on the negotiating table.
If you represent yourself as a seller, find a way to access the information you need to make informed decisions. By design, some information is privy only to those who are members of the Realtor trade association. That information can impact your bottom line. These would include concessions made by other sellers in your neighborhood, and agents know the contract and promises the parties make to each other. If you miss a checkbox, you might wait the six weeks for the closing table only to have the buyer walk away the day before because the contract was never property executed with the appropriate addendum, and you would miss out on the buyer’s earnest money deposit and the funds at closing.
How Much Does it Cost to Work with a Realtor to Buy a Home?
Inmost circumstances, the seller pays the commission to the agents, so it does not cost the buyer anything to work with a licensed Realtor. Some agents negotiate a 3% selling commission from the buyer and act as a fiduciary agent to the buyer. As an exclusive agent, the Realtor can legally sign documents for the buyers. In these cases, the commission may be offset by what the seller is offering, or the buyer may offer the commission in addition to what the seller is offering. We do not see this very often in Tallahassee and the one agent that works as a fiduciary agent does not disclose this to others (she is not required to do so either).
How Much Does it Cost to Work with a Realtor to Sell a Home?
Each agent will negotiate their own commission rate with the seller, and for many agents, their business models are based on 6% commission per listing. The listing agent (who works with the seller) negotiates the commission for the selling (buyer’s) agent when they negotiate their own commission. So instead of paying your listing agent 6%, understand that she is likely offering up half of that for another agent to bring her a buyer. Some agents split the commission amount evenly with the selling agents, but some agents keep a higher percentage than they offer to the selling agent. We see some brokerages offer 2.5% in the MLS and take the remaining 3.5% for themselves. There is no rule against this, but it does create hard feelings between agents and since Tallahassee is a small town, the chances are good that those agents will work together again in the future. If you feel your agent did this to you as a seller unknowingly, you may be entitled to that 1% in commission back. Check your listing agreement against your closing statement, if it does not match, hire an attorney, and get that money back. Call me if you need Real Estate attorney recommendations.
Are Realtors Allowed to Lie About Offers?
No, but they do. Lying is a violation of our Code of Conduct and it could jeopardize an agent’s membership (and access to the MLS) if caught. If a Realtor is caught lying, they can have a complaint filed against them within the Realtor trade organization itself or the Florida Real Estate Commission under Florida’s Department of Business and Professional Regulation. Most agents are honest and ethical, but if you feel you have not been treated fairly, there are resources for you. Start with the Tallahassee Board of Realtors and they can help you find the paperwork to file. www.tbrnet.org
What Can I do If I Don’t Like My Realtor? How Do I Fire My Realtor?
You can fire your Realtor for any reason at any time. He / She may still be paid at the closing table depending on how it is handled though. Florida is a consumer-friendly state and you can choose whom you would like to work with or terminate that relationship as well. If you feel you are not being properly represented, it is best to fire the agent before they write the offer for you so that there is no question that they will not be paid AND so that the new agent who does represent you does get paid. If you signed a representation agreement, there is often a clause explaining how to terminate the relationship. If you did not sign an agreement, or did not receive a copy, it would probably be best if you terminate that relationship in writing. You can have your new agent send an email or text telling the agent that you have selected them to work with instead. It is a small town, and you might end up running into Mr. My Agent No More, but chances are they will still be friendly and polite because this is Tallahassee and we wait to talk about your behind your back. (Just kidding, that is true all over the South, not just Tally.)
Does a Realtor Matter? How do Realtors Impact the Selling / Buying Process?
Yes. Research has found that having an agent helps sell a house quicker and for more money and often consumers ‘feel’ better about the transaction as well (keeping you out of court). Realtors also help keep buyers from getting cold feet, they help negotiate repairs, and keep emotions in check during an emotional process. They have access to confidential information for previous sales and can keep you for over-paying as a buyer and from leaving money on the table as a seller.
How Do I Check if my Realtor is Licensed?
Check for their name on the Florida’s Department of Business & Professional Regulation site: https://www.myfloridalicense.com/
How Do I File a Complaint Against my Realtor?
Start with website for the Florida Real Estate Commission(FREC). On that site, halfway down on the right side, you will find the link for filing a complaint against a licensed (or unlicensed) agent. http://www.myfloridalicense.com/DBPR/real-estate-commission/
Do I Have to Sign Anything to Work With a Realtor?
Most buyers’ agents do not have you sign anything for them to work for you. We do not recommend that. This is the largest (or one of) investments in your life, it makes sense to have that relationship in writing. Is the agent a transaction broker or your fiduciary agent? Can they sign a contract for you in a pinch? What will they share with the other side about you and your offer? If you sign an agreement to work with an agent to buy a home, you can still fire them at will. Whether they will still be paid will be determined by when in the process and how you fire them.
Every sellers’ agent has the seller sign a listing agreement. Check out our blog for a review of how to negotiate Tallahassee’s listing agreement.
FAQs about Realtors Accept Gifts?
No. Under Florida law, licensed Real Estate agents can only be paid by their broker for Real Estate related activities. You can find out who the broker of any agent is through the myfloridalicense.com website as well as a history of complaints filed against them.
Can Realtors Help Find Rentals?
There are locations in Florida where the rental market is big enough for Realtors to earn a living from the commission offered by the listed agents for rentals. Tallahassee is not one of those markets. While the MLS does have a rental category and there are new rental listings posted daily, most rentals never reach the MLS. Most of the time, the commission for a rental in Tallahassee is $50 and by the time the agent splits that with their broker, the amount left does not even cover the gas it cost to drive across town and unlock the door.
This can be really frustrating for students and/or parents of students going to school at FAMU or FSU. Sometimes those property managers are like sharks biting your wallet and sometimes they are like unicorns (never seen or heard from). Just a note here, people tell you who they are quickly. Believe them. If the dude takes forever to call you back, it will likely be like that the entire time you live there.
If school is bringing you to the Tallahassee area, consider investing in what we call a ‘kiddie condo.’ (They are no different from regular condos except they are close to the universities.) These townhouses and condos are so popular with the college crowd, that they are building new ones every year. Watch the condo association monthly fee since they vary from $75 to $500 a month. Most of the time, the monthly payment for a mortgage is a lot LOWER than the going rent in the area, and at the end of 4-5years (or more if you have multiple kids), you can almost always sell it for a nice profit. We have a lot of experience with these sales, so if this makes sense to you, contact us.
How do Realtors Make Money? What is the Average Real Estate Agent’s Salary?
Realtors are paid for selling homes by the sellers. When a seller lists their home with a licensed Realtor, they sign a listing agreement defining how much, and how, each agent will be paid. Most of the time, agents share the commission evenly with the agent that brings them a buyer. On average, Realtors sell 12homes a year and if the average price point is $225,000 and the average commission is 6% split evenly between the two agents, the agent’s broker will receive a checks for around $56,700. The broker pays the agent based on their employment contract. Many new agents are at a 50/50 split until they have some experience. Experienced agents usually have a larger split of the commission (70/30 or 90/10 they get the bigger piece), but that is negotiated agent to broker. Sometimes agents also negotiate a cap to their commissions, meaning once their broker receives (for example) $20,00 from their agent they stop splitting it and the agent earns 100% of the commission.
What do Realtors Hate About Being Realtors?
The same things people hate about any job in sales, sometimes people are mean or thoughtless. Most Realtors I know love their job, and on happiness studies, we often see Realtors near the top of the list of careers, but it is not a job for everyone. As an agent, running a business can be overwhelming and the agent must be self-motivated to go out into the world and communicate with people. That is not always comfortable for introverts, even through introverts make some of the greatest salesperson in the world, making cold sales calls can kill introvert’s soul. When Realtors get together and talk shop, they are often complaining about other Realtors. Tallahassee is a small town, and every once in a while we have a customer that makes the rounds of several Realtors and/or brokerages with a crazy request and that makes for great gossip. For the most part, Realtors love their jobs.
Why do Realtors Hate Zillow?
Misleading marketing is why we distrust Zillow. That Zestimate is bogus. It is an automated value not taking anything into consideration that may impact the value of the house from a buyer’s perspective.
Let us also look at Zillow’s business model. The Multiple Listing Service (MLS) is built and paid for by agents, for agents. Zillow takes the MLS information and brands it with their information and markets it to the consumer; then they take the consumers information and sell it back to agents. The agents you see pop up as Premier Zillow agents pay Zillow for that honor. Some agents spend thousands with Zillow to show up in as many zip codes as possible.
Why do Realtors Hate F.S.B.O.s (For Sale By Owner)? Will Realtors Show FSBO Homes?
We get this question often enough that it troubles us. Why would Realtors hate owners for selling their house? We know how prickly some Realtors are and would not want to deal with them either. Also, we are a family of do-it-yourselfers and completely understand the desire to want to control the whole process and do it our way and save that money. We get it. We even have some tips for you if you are thinking about going this route. Seriously, though? Hiring a quality agent is more than worth the commission you pay them in cold hard cash in your pocket, not to mention the guidance throughout the process that lowers anxiety. (Isn’t that worth something too?)
Realtors show homes that are listed by the owners all the time. In fact, most homes involve a Realtor on one side or the other and this is a market segment we watch closely because of the lack of inventory. The problem is finding them. The marketing sometimes only consists of placing a sign in the yard and that greatly limits who can make an offer on the home. Most of the time the seller will still pay a buyer’s agent commission even when selling it on their own and the agent is responsible for securing their own commission, not the buyer.
A note if you plan on selling it yourself, you will probably receive more calls from Realtors trying to list your house than you will from Realtors trying to show your house to buyers. There is a large agency in town that has sales training seminars yearly and if you are unfortunate enough to be listed on your own during one of those weeks, you may end up with 60 agents calling you to list your house. Call the broker and ask them to tell their agents not to call anymore and put yourself on the federal Do Not Call List.
Why do Realtors Dislike Foreclosed Properties?
There are few foreclosures in our market now, but there was a time and in some places where foreclosed properties were almost the norm. The biggest concern for us is the unknown condition which can be like playing Russian roulette with your pocketbook. You can find some really good ‘deals’ in the foreclosed market, and you can find some nightmares.
To make matters worse, Fannie Mae and Freddie Mac, who ended up with these foreclosed homes would not offer disclosures. Even if the agent knew there had been an inspection, even if that agent had been given a copy of that inspection, they were not allowed to share it or otherwise disclose it. We can only guess that the same law that states Fannie Mae and Freddie Mac do not pay taxes, or document stamps, or transfer fees also allows them to ignore the laws on disclosure requirements too. Well played guys, well played.
When Will Realtors Become Obsolete?
This is a great question. This has been looming over us as technology advances and become cheaper and homes are offering more and more interactive experiences. Best guess is that if Realtors do not evolve with the technology, then they will become obsolete and you will buy your home with Uber, or Amazon, or Google. Until then, if you are looking for solid information you can trust and someone to help you with your next move, contact us.
Will Realtors Negotiate Commissions?
Do Realtors Like VA Loans?
Veterans Administration loans can be tough on new agents who do not know what to put in the VA contract to get them to the closing table. VA loans require a clear or clean termite report and if that is not noted in the contract, the seller may not agree when presented with the wood rot he needs to clean up before closing.
These loans are the golden ticket for our veterans and having an agent experienced with how to get through those hoops for you is vital. If not handled correctly, instead of moving into the home of your dreams, you might lose the house and your binder deposit, because of your agent’s lack of experience.
What is the Difference Between a Realtor and a Broker?
A Realtor is a licensed agent that has joined the national trade organization. A Realtor can be any level of license – sales agent or broker. In the state of Florida, you must have your license for two years before you can apply for your broker’s license. You must be a broker to open your own agency, but you can have a broker’s license and work for another broker. In that situation, the Realtor/agent is a broker associate (as I am with Ketcham Realty Group).
How Hard is the Real Estate License Exam?
Hard enough that two-thirds fail. The test focuses on the statutes and with my background in law and law enforcement, it almost felt like an unfair advantage.
Do Realtors Have Business Insurance?
Yes, most brokers offer their agents errors and omissions insurance.
What Questions Should I Ask a Realtor?
Having an experienced agent on your side guiding you through the process can save you thousands in dollars and hours in searching. Here are some questions to consider asking during that first meeting and before you commit to work with the agent.
- How long have you been an agent?
We cringe when a seller tells us they are going to list their house with a family member who just got their license. Take it from someone who reads the research in academic journals – experience matters to sellers and buyers. They say it takes at least a thousand hours of practice to become proficient in an activity. Do you want to be part of an agent’s learning curve?
- What did you do before you were an agent?
It seems almost all the agents in Tallahassee were something else before they were Real Estate agents. There are a handful of Realtors in Tallahassee who grew up within families that were also in the business of selling homes. Most have had previous careers before getting their Real Estate license. There is no right or wrong answer here, but do you really want a former disc jockey representing you with his lack of negotiating experience or life skills?
- How many homes do you sell each year?
This is a question to really get at that experience you want to represent you. Agents could have had their license for years and not actually sell any homes. The average agent sells approximately 12 homes a year. If the agent sells way more than this, they may not have the time to give you and your contract the attention it needs or, you may be handed off to someone you haven’t even met. If they sell way less, they may not have the experience you need to protect your investment.
- Do you work with both buyers and sellers?
Negotiations should not be a zero-sum game with a clear winner and clear loser. Negotiations should be about finding mutually satisfying terms and conditions. An agent who works with both will be able to help you ‘get into the head’ of the other side and offer perspective and have alternative approaches that have worked in the past.
- Are you a full-time or part-time agent?
Many part-time agents are great people and have wonderful hearts and intentions. However, it is frustrating as agents to have to wait for part-timer to have a break at work so that we can ask a question or present an offer. As frustrating as this is to professional agents, it can be much worse, and nerve wracking, anxiety creating for customers. If being able to get in touch with your Realtors quickly is important to you, think about hiring a full-time agent.
- On average, how long does it take you to get a buyer to the closing table?
Some agents specialize in looking at homes or hosting open houses. We specialize in selling homes. We match our speed with your motivation. Once you are ready to write an offer, it should not take more than 60-90 days to find your home, negotiate it and any repairs and close on that home.
- How many customers are you currently working with?
There is no correct answer to this one either. If you are the only customer an agent is working with, they may become so desperate for that commission at the closing table they may not take your situation and priorities into consideration like they should. On the other hand, if the agent has too many customers, they may not give you the individual attention you deserve
- Do you have references I can call?
Beware hiring anyone that cannot offer references. I once interviewed for a job that required 25 references and at least one set of references had to be five deep – meaning they know at least five of your other references. That was fun, and while you do not need that many references, beware the agent that does not have any to offer. Funny thing, we hire people for what they know and then want to fire them for who they are… pick someone you can trust and talk to and feel comfortable around.
- What is your experience in my price point?
If you hire that luxury agent who usually works in the $500,000 price range and you are looking in the $300,000 range, they may not make your home search as important as it should be. Likewise, if you are buying the luxury home and the agent has never handled a transaction at that level, you may be missing that experience you need to protect your investments
- Will you be handing me off to a team member at any point?
Every agent needs a team they can rely on to help get customers to the closing table. Some agents only work with sellers and some are strictly buyer’s agents. There are many productive teams in Tallahassee, and from experience, we can say it gets confusing quickly trying to figure out who you need to ask what questions to and who gets what email. Our agents find that confusing and want to spare you the drama. Working with us, you have one agent the whole way through. There is a team at their back, but whomever you pick to work with is your first and only go-to during the whole process and afterwards.
- How do you help buyers compete in this strong sellers’ market?
This comes from experience. There is no one single answer to this one. Each buyer and family are unique, as is each house and seller. The things that work in one situation may hurt you in another. What you should look for is that your agent has an idea of what your strengths are and how to help address any issues that concern you.
- Do you work evenings or weekends?
There are agents that do not answer their phones outside of regular business hours. It can be incredibly aggravating to have to wait until Tuesday over a long weekend to write an offer or submit one to a seller. It seems to me that agents not working nights and weekends is the equivalent of tax accountants vacationing during the first two weeks of April. In this super competitive market, even waiting an hour can make a difference in whether you have a chance to see a house or lose it to another buyer.
- What is the best way to get in contact with you?
If you want to hear a voice tell you news, and your agent is a millennial that only texts, that may not be the best fit to represent you. Likewise, if you prefer the quickness of a text and your agent prefers emails, it can feel like a mismatch quickly. Our agents communicate with you how you prefer and as often as you prefer.
- How do you get along with other agents?
There was a Facebook post on a private Real Estate agent training page (with thousands of experienced agents across the country) asking whether the relationship between the listing agent and selling (buyer’s) agent matters. Within a couple hours there were hundreds of responses and all of them said that the relationship impacts the outcome. Tallahassee is a laid-back town, but even the locals have their limits. Those agents who approach negotiations as a winner take all game get punished in the long run. It may seem like a good idea to choose the young ambitious maverick Realtor, until you get three low-ball offers in a row. You do not want to get hit in the crossfire between long running feuds. Pick an agent that gets along with most everyone and who serves their community.